Case Study Description of Procter & Gamble Co.: Accounting for Organization 2005
Since 1999, Procter & Gamble (P&G) had reported restructuring charges each quarter for Organization 2005, a five-year comprehensive corporate restructuring program. In 1995, the Financial Accounting Standards Board's Emerging Issues Task Force (EITF) issued a consensus opinion (EITF-94-3) that defined when certain restructuring costs could be recognized as a liability and specified increased financial statement disclosures. Yet, like other areas of accounting, there was considerable discretion in when and how a company could charge restructuring costs to earnings. In December 2001, P&G was halfway through Organization 2005. Should P&G management forecast the remaining costs of the program with enough detail to recognize a liability in FY 2002 for the balance of Organization 2005 charges? Or should it continue to recognize the remaining costs of the program each quarter as the program progressed? How should management exercise its discretion, and how should it explain the charges to investors?
Swot Analysis of "Procter & Gamble Co.: Accounting for Organization 2005" written by Mary E. Barth, Susan MacKenzie includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eitf Restructuring facing as an external strategic factors. Some of the topics covered in Procter & Gamble Co.: Accounting for Organization 2005 case study are - Strategic Management Strategies, Financial management, Reorganization and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Procter & Gamble Co.: Accounting for Organization 2005 casestudy better are - – increasing energy prices, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Procter & Gamble Co.: Accounting for Organization 2005
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Procter & Gamble Co.: Accounting for Organization 2005 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eitf Restructuring, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eitf Restructuring 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 Procter & Gamble Co.: Accounting for Organization 2005 can be done for the following purposes –
1. Strategic planning using facts provided in Procter & Gamble Co.: Accounting for Organization 2005 case study
2. Improving business portfolio management of Eitf Restructuring
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 Eitf Restructuring
Strengths Procter & Gamble Co.: Accounting for Organization 2005 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eitf Restructuring in Procter & Gamble Co.: Accounting for Organization 2005 Harvard Business Review case study are -
Learning organization
- Eitf Restructuring 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 Eitf Restructuring is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Procter & Gamble Co.: Accounting for Organization 2005 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Eitf Restructuring has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Eitf Restructuring to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Eitf Restructuring in the sector have low bargaining power. Procter & Gamble Co.: Accounting for Organization 2005 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eitf Restructuring to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Eitf Restructuring 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 Eitf Restructuring in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Procter & Gamble Co.: Accounting for Organization 2005 firm has clearly differentiated products in the market place. This has enabled Eitf Restructuring to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Eitf Restructuring to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Eitf Restructuring is present in almost all the verticals within the industry. This has provided firm in Procter & Gamble Co.: Accounting for Organization 2005 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.
Analytics focus
– Eitf Restructuring 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 Mary E. Barth, Susan MacKenzie 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.
Training and development
– Eitf Restructuring has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Procter & Gamble Co.: Accounting for Organization 2005 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.
Successful track record of launching new products
– Eitf Restructuring has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Eitf Restructuring 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.
Operational resilience
– The operational resilience strategy in the Procter & Gamble Co.: Accounting for Organization 2005 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.
Organizational Resilience of Eitf Restructuring
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eitf Restructuring does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Eitf Restructuring is one of the leading recruiters in the industry. Managers in the Procter & Gamble Co.: Accounting for Organization 2005 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Procter & Gamble Co.: Accounting for Organization 2005 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Procter & Gamble Co.: Accounting for Organization 2005 are -
Increasing silos among functional specialists
– The organizational structure of Eitf Restructuring is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Eitf Restructuring needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eitf Restructuring to focus more on services rather than just following the product oriented approach.
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 Eitf Restructuring supply chain. Even after few cautionary changes mentioned in the HBR case study - Procter & Gamble Co.: Accounting for Organization 2005, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eitf Restructuring vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Eitf Restructuring 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.
Skills based hiring
– The stress on hiring functional specialists at Eitf Restructuring has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Eitf Restructuring 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 operating costs
– Compare to the competitors, firm in the HBR case study Procter & Gamble Co.: Accounting for Organization 2005 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 Eitf Restructuring 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Eitf Restructuring 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. Eitf Restructuring 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Procter & Gamble Co.: Accounting for Organization 2005, in the dynamic environment Eitf Restructuring has struggled to respond to the nimble upstart competition. Eitf Restructuring has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Eitf Restructuring has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Procter & Gamble Co.: Accounting for Organization 2005 should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Procter & Gamble Co.: Accounting for Organization 2005 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Procter & Gamble Co.: Accounting for Organization 2005 can leverage the sales team experience to cultivate customer relationships as Eitf Restructuring is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Procter & Gamble Co.: Accounting for Organization 2005 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 Eitf Restructuring has relatively successful track record of launching new products.
Opportunities Procter & Gamble Co.: Accounting for Organization 2005 | 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 Procter & Gamble Co.: Accounting for Organization 2005 are -
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 Eitf Restructuring 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eitf Restructuring can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Eitf Restructuring can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Eitf Restructuring 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 Eitf Restructuring to hire the very best people irrespective of their geographical location.
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. Eitf Restructuring can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Eitf Restructuring to increase its market reach. Eitf Restructuring 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eitf Restructuring can use these opportunities to build new business models that can help the communities that Eitf Restructuring operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Eitf Restructuring in the consumer business. Now Eitf Restructuring can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Eitf Restructuring 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.
Leveraging digital technologies
– Eitf Restructuring 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Eitf Restructuring 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.
Creating value in data economy
– The success of analytics program of Eitf Restructuring has opened avenues for new revenue streams for the organization in the industry. This can help Eitf Restructuring to build a more holistic ecosystem as suggested in the Procter & Gamble Co.: Accounting for Organization 2005 case study. Eitf Restructuring can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Eitf Restructuring 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 Procter & Gamble Co.: Accounting for Organization 2005 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eitf Restructuring to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Procter & Gamble Co.: Accounting for Organization 2005 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Procter & Gamble Co.: Accounting for Organization 2005 are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Procter & Gamble Co.: Accounting for Organization 2005, Eitf Restructuring 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 .
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.
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. Eitf Restructuring 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.
Increasing wage structure of Eitf Restructuring
– 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 Eitf Restructuring.
Stagnating economy with rate increase
– Eitf Restructuring 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.
High dependence on third party suppliers
– Eitf Restructuring 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.
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 Eitf Restructuring business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Eitf Restructuring 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.
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 Eitf Restructuring.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Eitf Restructuring 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 Procter & Gamble Co.: Accounting for Organization 2005 .
Consumer confidence and its impact on Eitf Restructuring 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.
Environmental challenges
– Eitf Restructuring 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. Eitf Restructuring can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Eitf Restructuring is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Procter & Gamble Co.: Accounting for Organization 2005 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 Procter & Gamble Co.: Accounting for Organization 2005 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 Procter & Gamble Co.: Accounting for Organization 2005 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 Procter & Gamble Co.: Accounting for Organization 2005 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 Procter & Gamble Co.: Accounting for Organization 2005 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 Eitf Restructuring needs to make to build a sustainable competitive advantage.
