Correcting Sight and Accounting at LCA-Vision Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Correcting Sight and Accounting at LCA-Vision Inc.
This case provides students with an opportunity to decide how to respond to an SEC inquiry and how to communicate adverse news. It does so in the context of accounting for separately priced extended warranties. LCA-Vision (LCA), a leading provider of LASIK vision-correction services, accounted for separately priced extended warranties incorrectly. Under US generally accepted accounting principles (GAAP), LCA was required to defer revenues associated with extended warranties. Instead, LCA recognized 93% of these revenues immediately, and deferred the 7% in accordance with the proportion of customers needing follow-up treatment. During the routine review process, the SEC posted a comment letter questioning this accounting treatment, which subsequently led to a restatement and shareholder litigation. Therefore, the case is an opportunity to examine how managers interact with regulatory bodies, communicate with investors, account for separately priced extended warranties, and correct erroneous filings via issuing a restatement. It is suitable for an audience of accounting students, or as an elective for general business students who have some exposure to accounting.
Swot Analysis of "Correcting Sight and Accounting at LCA-Vision Inc." written by Justin J. Hopkins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lca Warranties facing as an external strategic factors. Some of the topics covered in Correcting Sight and Accounting at LCA-Vision Inc. case study are - Strategic Management Strategies, Government and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Correcting Sight and Accounting at LCA-Vision Inc. casestudy better are - – there is backlash against globalization, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing commodity prices, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Correcting Sight and Accounting at LCA-Vision Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Correcting Sight and Accounting at LCA-Vision Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lca Warranties, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lca Warranties operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Correcting Sight and Accounting at LCA-Vision Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Correcting Sight and Accounting at LCA-Vision Inc. case study
2. Improving business portfolio management of Lca Warranties
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lca Warranties
Strengths Correcting Sight and Accounting at LCA-Vision Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lca Warranties in Correcting Sight and Accounting at LCA-Vision Inc. Harvard Business Review case study are -
Training and development
– Lca Warranties has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Correcting Sight and Accounting at LCA-Vision Inc. Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Lca Warranties are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Lca Warranties is one of the most innovative firm in sector. Manager in Correcting Sight and Accounting at LCA-Vision Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Lca Warranties
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lca Warranties does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Lca Warranties is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Justin J. Hopkins can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Lca Warranties is present in almost all the verticals within the industry. This has provided firm in Correcting Sight and Accounting at LCA-Vision Inc. case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Lca Warranties is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lca Warranties is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Correcting Sight and Accounting at LCA-Vision Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Correcting Sight and Accounting at LCA-Vision Inc. Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Lca Warranties has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lca Warranties to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Lca Warranties is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lca Warranties in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Lca Warranties is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Lca Warranties in the sector have low bargaining power. Correcting Sight and Accounting at LCA-Vision Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lca Warranties to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Correcting Sight and Accounting at LCA-Vision Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Correcting Sight and Accounting at LCA-Vision Inc. are -
Increasing silos among functional specialists
– The organizational structure of Lca Warranties is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Lca Warranties needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lca Warranties to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Lca Warranties, firm in the HBR case study Correcting Sight and Accounting at LCA-Vision Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Correcting Sight and Accounting at LCA-Vision Inc. has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lca Warranties 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Correcting Sight and Accounting at LCA-Vision Inc., is just above the industry average. Lca Warranties needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Lca Warranties has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Lca Warranties even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Lca Warranties has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Correcting Sight and Accounting at LCA-Vision Inc. HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lca Warranties has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Lca Warranties needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lca Warranties supply chain. Even after few cautionary changes mentioned in the HBR case study - Correcting Sight and Accounting at LCA-Vision Inc., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lca Warranties vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Correcting Sight and Accounting at LCA-Vision Inc., in the dynamic environment Lca Warranties has struggled to respond to the nimble upstart competition. Lca Warranties has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Lca Warranties products
– To increase the profitability and margins on the products, Lca Warranties needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Correcting Sight and Accounting at LCA-Vision Inc. | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Correcting Sight and Accounting at LCA-Vision Inc. are -
Learning at scale
– Online learning technologies has now opened space for Lca Warranties to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lca Warranties can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Lca Warranties can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Lca Warranties to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Lca Warranties to increase its market reach. Lca Warranties will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Lca Warranties can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Lca Warranties can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Correcting Sight and Accounting at LCA-Vision Inc. suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lca Warranties can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lca Warranties can use these opportunities to build new business models that can help the communities that Lca Warranties operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Lca Warranties can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lca Warranties can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Correcting Sight and Accounting at LCA-Vision Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lca Warranties in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Lca Warranties has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Correcting Sight and Accounting at LCA-Vision Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Correcting Sight and Accounting at LCA-Vision Inc. are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lca Warranties can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Correcting Sight and Accounting at LCA-Vision Inc. .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lca Warranties business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Lca Warranties is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Lca Warranties.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lca Warranties in the Finance & Accounting sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lca Warranties will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lca Warranties with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Lca Warranties high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Lca Warranties
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lca Warranties.
Environmental challenges
– Lca Warranties needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lca Warranties can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Lca Warranties demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Lca Warranties has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Lca Warranties needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Correcting Sight and Accounting at LCA-Vision Inc. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Correcting Sight and Accounting at LCA-Vision Inc. needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Correcting Sight and Accounting at LCA-Vision Inc. is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Correcting Sight and Accounting at LCA-Vision Inc. is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Correcting Sight and Accounting at LCA-Vision Inc. is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lca Warranties needs to make to build a sustainable competitive advantage.