CalPERS versus Mercury News: Disclosure Comes to Private Equity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of CalPERS versus Mercury News: Disclosure Comes to Private Equity
In November 2002, a California state court required the California Public Employees' Retirement Systems (CalPERS) to publicly report its returns on private-equity investments. This case examines the controversy surrounding the disclosure of private-equity returns mandated by this court decision. It includes discussions of the reaction of general and limited partners and the issues surrounding the sizable amounts of pension money invested in alternative investments. The CalPERS decision dovetailed with efforts by the Association for Investment Management and Research (AIMR) and the British and European Venture Capital Associations to reach greater agreement on disclosure standards in reporting the results of private-equity investments. The case details one set of standards, AIMR's Global Investment Performance Standards (GIPS), which would become effective January 1, 2005. Students are asked to calculate the proposed metrics for a typical fund and assess their usefulness to a prospective investor. More broadly, the case addresses the type of information necessary to properly benchmark private-equity returns and the consequences of this type of disclosure to the industry.
Swot Analysis of "CalPERS versus Mercury News: Disclosure Comes to Private Equity" written by Susan Chaplinsky, Susan Perry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Calpers Disclosure facing as an external strategic factors. Some of the topics covered in CalPERS versus Mercury News: Disclosure Comes to Private Equity case study are - Strategic Management Strategies, Financial management, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the CalPERS versus Mercury News: Disclosure Comes to Private Equity casestudy better are - – cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of CalPERS versus Mercury News: Disclosure Comes to Private Equity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CalPERS versus Mercury News: Disclosure Comes to Private Equity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Calpers Disclosure, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Calpers Disclosure 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity can be done for the following purposes –
1. Strategic planning using facts provided in CalPERS versus Mercury News: Disclosure Comes to Private Equity case study
2. Improving business portfolio management of Calpers Disclosure
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 Calpers Disclosure
Strengths CalPERS versus Mercury News: Disclosure Comes to Private Equity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Calpers Disclosure in CalPERS versus Mercury News: Disclosure Comes to Private Equity Harvard Business Review case study are -
Effective Research and Development (R&D)
– Calpers Disclosure has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study CalPERS versus Mercury News: Disclosure Comes to Private Equity - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Calpers Disclosure is one of the leading recruiters in the industry. Managers in the CalPERS versus Mercury News: Disclosure Comes to Private Equity are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Calpers Disclosure has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Calpers Disclosure to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Calpers Disclosure 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 Calpers Disclosure 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
– Calpers Disclosure is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Finance & Accounting industry
– CalPERS versus Mercury News: Disclosure Comes to Private Equity firm has clearly differentiated products in the market place. This has enabled Calpers Disclosure to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Calpers Disclosure to invest into research and development (R&D) and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Calpers Disclosure digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Calpers Disclosure has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Calpers Disclosure 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 Susan Chaplinsky, Susan Perry 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.
Cross disciplinary teams
– Horizontal connected teams at the Calpers Disclosure 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.
Successful track record of launching new products
– Calpers Disclosure has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Calpers Disclosure 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.
Organizational Resilience of Calpers Disclosure
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Calpers Disclosure does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Calpers Disclosure in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses CalPERS versus Mercury News: Disclosure Comes to Private Equity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CalPERS versus Mercury News: Disclosure Comes to Private Equity are -
No frontier risks strategy
– After analyzing the HBR case study CalPERS versus Mercury News: Disclosure Comes to Private Equity, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Calpers Disclosure 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.
Increasing silos among functional specialists
– The organizational structure of Calpers Disclosure is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Calpers Disclosure needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Calpers Disclosure to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As CalPERS versus Mercury News: Disclosure Comes to Private Equity HBR case study mentions - Calpers Disclosure takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Calpers Disclosure is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CalPERS versus Mercury News: Disclosure Comes to Private Equity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CalPERS versus Mercury News: Disclosure Comes to Private Equity, is just above the industry average. Calpers Disclosure 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.
Lack of clear differentiation of Calpers Disclosure products
– To increase the profitability and margins on the products, Calpers Disclosure needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Calpers Disclosure has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Calpers Disclosure, firm in the HBR case study CalPERS versus Mercury News: Disclosure Comes to Private Equity needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Calpers Disclosure supply chain. Even after few cautionary changes mentioned in the HBR case study - CalPERS versus Mercury News: Disclosure Comes to Private Equity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Calpers Disclosure vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Calpers Disclosure 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.
Opportunities CalPERS versus Mercury News: Disclosure Comes to Private Equity | 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity are -
Creating value in data economy
– The success of analytics program of Calpers Disclosure has opened avenues for new revenue streams for the organization in the industry. This can help Calpers Disclosure to build a more holistic ecosystem as suggested in the CalPERS versus Mercury News: Disclosure Comes to Private Equity case study. Calpers Disclosure can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Calpers Disclosure 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Calpers Disclosure can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Calpers Disclosure in the consumer business. Now Calpers Disclosure can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Calpers Disclosure to increase its market reach. Calpers Disclosure 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Calpers Disclosure 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 Calpers Disclosure to hire the very best people irrespective of their geographical location.
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. Calpers Disclosure can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Calpers Disclosure is facing challenges because of the dominance of functional experts in the organization. CalPERS versus Mercury News: Disclosure Comes to Private Equity case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Calpers Disclosure 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Calpers Disclosure can use these opportunities to build new business models that can help the communities that Calpers Disclosure operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Calpers Disclosure can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Calpers Disclosure 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.
Developing new processes and practices
– Calpers Disclosure 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.
Threats CalPERS versus Mercury News: Disclosure Comes to Private Equity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CalPERS versus Mercury News: Disclosure Comes to Private Equity are -
Environmental challenges
– Calpers Disclosure 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. Calpers Disclosure can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
High dependence on third party suppliers
– Calpers Disclosure 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.
Consumer confidence and its impact on Calpers Disclosure 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
– Calpers Disclosure has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Calpers Disclosure 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.
Stagnating economy with rate increase
– Calpers Disclosure 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Calpers Disclosure with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Calpers Disclosure in the Finance & Accounting sector and impact the bottomline of the organization.
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 Calpers Disclosure business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Calpers Disclosure
– 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 Calpers Disclosure.
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.
Regulatory challenges
– Calpers Disclosure needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Calpers Disclosure 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity .
Weighted SWOT Analysis of CalPERS versus Mercury News: Disclosure Comes to Private Equity 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity 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 CalPERS versus Mercury News: Disclosure Comes to Private Equity 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 Calpers Disclosure needs to make to build a sustainable competitive advantage.