Case Study Description of Western-Southern Enterprise
Examines the problem facing Western Southern Enterprise (WSE), a mutual insurance company, at the end of 1996. Its investment in Cincinnati Bell stock was phenomenally successful, but left the company potentially overweighted in equities in general and a single stock in particular. The cost of diversification is declaring and paying tax on a large capital gain. Possible solutions include maintaining the position, selling the position, or protecting the position by issuing a Debt Exchangeable for Common Stock security (DECS). Asks students to trade off the benefits of diversification (which they have to justify) against the cost of declaring the capital gain (which they must quantify). In defending their choices, students are asked to evaluate the various tax and nontax benefits and costs of each solution. Because the client (WSE) has several potentially contradictory objectives, the case lays out a situation where security design can improve upon the simple alternatives. Provides structuring details of the DECS, allowing discussion of why various features were included in their design.
Swot Analysis of "Western-Southern Enterprise" written by Mitchell A. Petersen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wse Decs facing as an external strategic factors. Some of the topics covered in Western-Southern Enterprise case study are - Strategic Management Strategies, Financial management, Policy, Risk management, Security & privacy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Western-Southern Enterprise casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing commodity prices, increasing energy prices, central banks are concerned over increasing inflation, there is backlash against globalization,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Western-Southern Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Western-Southern Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wse Decs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wse Decs 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 Western-Southern Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Western-Southern Enterprise case study
2. Improving business portfolio management of Wse Decs
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 Wse Decs
Strengths Western-Southern Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wse Decs in Western-Southern Enterprise Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Wse Decs 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.
Diverse revenue streams
– Wse Decs is present in almost all the verticals within the industry. This has provided firm in Western-Southern Enterprise 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.
Low bargaining power of suppliers
– Suppliers of Wse Decs in the sector have low bargaining power. Western-Southern Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wse Decs to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Wse Decs has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Western-Southern Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Wse Decs 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 Mitchell A. Petersen 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.
Superior customer experience
– The customer experience strategy of Wse Decs in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Wse Decs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wse Decs has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Wse Decs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Western-Southern Enterprise 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Western-Southern Enterprise firm has clearly differentiated products in the market place. This has enabled Wse Decs to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Wse Decs to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Wse Decs 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 Wse Decs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Wse Decs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wse Decs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Wse Decs has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Western-Southern Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Western-Southern Enterprise are -
Workers concerns about automation
– As automation is fast increasing in the segment, Wse Decs 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.
Low market penetration in new markets
– Outside its home market of Wse Decs, firm in the HBR case study Western-Southern Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Wse Decs 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. Wse Decs 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
Wse Decs 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.
No frontier risks strategy
– After analyzing the HBR case study Western-Southern Enterprise, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Wse Decs has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 Wse Decs supply chain. Even after few cautionary changes mentioned in the HBR case study - Western-Southern Enterprise, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wse Decs vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Wse Decs has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Wse Decs is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Wse Decs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wse Decs to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Western-Southern Enterprise 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 Wse Decs has relatively successful track record of launching new products.
Lack of clear differentiation of Wse Decs products
– To increase the profitability and margins on the products, Wse Decs needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Western-Southern Enterprise | 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 Western-Southern Enterprise are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Wse Decs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wse Decs 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.
Using analytics as competitive advantage
– Wse Decs has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Western-Southern Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wse Decs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Wse Decs 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wse Decs to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Wse Decs to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Wse Decs to increase its market reach. Wse Decs 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wse Decs 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, Western-Southern Enterprise, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Wse Decs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Wse Decs 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.
Buying journey improvements
– Wse Decs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Western-Southern Enterprise 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.
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 Wse Decs 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.
Developing new processes and practices
– Wse Decs 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.
Creating value in data economy
– The success of analytics program of Wse Decs has opened avenues for new revenue streams for the organization in the industry. This can help Wse Decs to build a more holistic ecosystem as suggested in the Western-Southern Enterprise case study. Wse Decs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Western-Southern Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Western-Southern Enterprise are -
Consumer confidence and its impact on Wse Decs 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 disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Wse Decs can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Western-Southern Enterprise, Wse Decs may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Wse Decs
– 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 Wse Decs.
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 Wse Decs.
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. Wse Decs 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.
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 Wse Decs in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wse Decs 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
– Wse Decs 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Wse Decs needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wse Decs 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 Western-Southern Enterprise .
Weighted SWOT Analysis of Western-Southern Enterprise 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 Western-Southern Enterprise 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 Western-Southern Enterprise 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 Western-Southern Enterprise 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 Western-Southern Enterprise 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 Wse Decs needs to make to build a sustainable competitive advantage.
