Practical Regression: Building Your Model: What Variables to Include SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Practical Regression: Building Your Model: What Variables to Include
This is the third in a series of lecture notes which, if tied together into a textbook, might be entitled "Practical Regression." The purpose of the notes is to supplement the theoretical content of most statistics texts with practical advice based on nearly three decades of experience of the author, combined with over one hundred years of experience of colleagues who have offered guidance. As the title "Practical Regression" suggests, these notes are a guide to performing regression in practice. This technical note explains how to choose predictor variables to include in regression. The note begins by explaining the many virtues of parsimony. Sometimes analysts include predictors simply because they are in the available data. Including such "junk" predictors increases the chances of obtaining confusing or misleading results. The note also explores multicollinearity, a favorite topic in some statistics classes that is rarely a problem in real world empirical work. The note concludes by explaining how to work with groups of related variables and describes how to implement the partial F test for joint significance.
Swot Analysis of "Practical Regression: Building Your Model: What Variables to Include" written by David Dranove includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Regression Practical facing as an external strategic factors. Some of the topics covered in Practical Regression: Building Your Model: What Variables to Include case study are - Strategic Management Strategies, Financial management, Market research and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Practical Regression: Building Your Model: What Variables to Include casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing energy prices, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Practical Regression: Building Your Model: What Variables to Include
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Practical Regression: Building Your Model: What Variables to Include case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Regression Practical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Regression Practical 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 Practical Regression: Building Your Model: What Variables to Include can be done for the following purposes –
1. Strategic planning using facts provided in Practical Regression: Building Your Model: What Variables to Include case study
2. Improving business portfolio management of Regression Practical
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 Regression Practical
Strengths Practical Regression: Building Your Model: What Variables to Include | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Regression Practical in Practical Regression: Building Your Model: What Variables to Include Harvard Business Review case study are -
Strong track record of project management
– Regression Practical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Regression Practical 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 Practical Regression: Building Your Model: What Variables to Include - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Regression Practical 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.
Learning organization
- Regression Practical 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 Regression Practical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Practical Regression: Building Your Model: What Variables to Include Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Regression Practical 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 David Dranove 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.
Low bargaining power of suppliers
– Suppliers of Regression Practical in the sector have low bargaining power. Practical Regression: Building Your Model: What Variables to Include has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Regression Practical to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Regression Practical is present in almost all the verticals within the industry. This has provided firm in Practical Regression: Building Your Model: What Variables to Include 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.
Innovation driven organization
– Regression Practical is one of the most innovative firm in sector. Manager in Practical Regression: Building Your Model: What Variables to Include Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Regression Practical in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Regression Practical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Regression Practical 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.
Cross disciplinary teams
– Horizontal connected teams at the Regression Practical 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.
Ability to lead change in Finance & Accounting field
– Regression Practical 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 Regression Practical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Practical Regression: Building Your Model: What Variables to Include | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Practical Regression: Building Your Model: What Variables to Include are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Practical Regression: Building Your Model: What Variables to Include, is just above the industry average. Regression Practical 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.
Interest costs
– Compare to the competition, Regression Practical 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.
Slow decision making process
– As mentioned earlier in the report, Regression Practical 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. Regression Practical 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 bargaining power of channel partners
– Because of the regulatory requirements, David Dranove suggests that, Regression Practical is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Regression Practical products
– To increase the profitability and margins on the products, Regression Practical needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Regression Practical 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.
Low market penetration in new markets
– Outside its home market of Regression Practical, firm in the HBR case study Practical Regression: Building Your Model: What Variables to Include needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Practical Regression: Building Your Model: What Variables to Include, 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.
Products dominated business model
– Even though Regression Practical 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 - Practical Regression: Building Your Model: What Variables to Include should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Regression Practical is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Regression Practical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Regression Practical 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 Regression Practical supply chain. Even after few cautionary changes mentioned in the HBR case study - Practical Regression: Building Your Model: What Variables to Include, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Regression Practical vulnerable to further global disruptions in South East Asia.
Opportunities Practical Regression: Building Your Model: What Variables to Include | 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 Practical Regression: Building Your Model: What Variables to Include are -
Creating value in data economy
– The success of analytics program of Regression Practical has opened avenues for new revenue streams for the organization in the industry. This can help Regression Practical to build a more holistic ecosystem as suggested in the Practical Regression: Building Your Model: What Variables to Include case study. Regression Practical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Regression Practical in the consumer business. Now Regression Practical can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Regression Practical 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, Practical Regression: Building Your Model: What Variables to Include, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Regression Practical is facing challenges because of the dominance of functional experts in the organization. Practical Regression: Building Your Model: What Variables to Include 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.
Using analytics as competitive advantage
– Regression Practical 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 Practical Regression: Building Your Model: What Variables to Include - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Regression Practical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Regression Practical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Regression Practical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Regression Practical 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Regression Practical can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Regression Practical can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Manufacturing automation
– Regression Practical 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.
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. Regression Practical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Regression Practical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Practical Regression: Building Your Model: What Variables to Include 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.
Building a culture of innovation
– managers at Regression Practical 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.
Threats Practical Regression: Building Your Model: What Variables to Include External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Practical Regression: Building Your Model: What Variables to Include are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Regression Practical in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Regression Practical 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 Regression Practical business can come under increasing regulations regarding data privacy, data security, etc.
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. Regression Practical 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.
Shortening product life cycle
– it is one of the major threat that Regression Practical is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Regression Practical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Regression Practical 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.
Regulatory challenges
– Regression Practical 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, Regression Practical 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 Practical Regression: Building Your Model: What Variables to Include .
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. Regression Practical needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Regression Practical 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.
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 Regression Practical.
Weighted SWOT Analysis of Practical Regression: Building Your Model: What Variables to Include 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 Practical Regression: Building Your Model: What Variables to Include 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 Practical Regression: Building Your Model: What Variables to Include 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 Practical Regression: Building Your Model: What Variables to Include 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 Practical Regression: Building Your Model: What Variables to Include 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 Regression Practical needs to make to build a sustainable competitive advantage.