Case Study Description of Reducing Delinquent Accounts Receivable
In April 2014, the accounts receivable exceeding 90 days were causing a cash-flow problem for Wolf Distributing, which distributes the Berserker Rage energy drink in the Chicagoland area. Christine Taylor, the company's chief operating officer, had tried a number of traditional methods to monitor and address this problem, but she had made little progress. She decided to use three basic statistical analysis tools-Pareto diagrams, scatter plots, and run charts-to help her better grasp the problem.
Swot Analysis of "Reducing Delinquent Accounts Receivable" written by Jack Boepple includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Receivable Accounts facing as an external strategic factors. Some of the topics covered in Reducing Delinquent Accounts Receivable case study are - Strategic Management Strategies, Financial analysis, Financial management, Operations management, Product development and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Reducing Delinquent Accounts Receivable casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Reducing Delinquent Accounts Receivable
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reducing Delinquent Accounts Receivable case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Receivable Accounts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Receivable Accounts 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 Reducing Delinquent Accounts Receivable can be done for the following purposes –
1. Strategic planning using facts provided in Reducing Delinquent Accounts Receivable case study
2. Improving business portfolio management of Receivable Accounts
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 Receivable Accounts
Strengths Reducing Delinquent Accounts Receivable | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Receivable Accounts in Reducing Delinquent Accounts Receivable Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Receivable Accounts 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.
Training and development
– Receivable Accounts has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reducing Delinquent Accounts Receivable 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.
Ability to recruit top talent
– Receivable Accounts is one of the leading recruiters in the industry. Managers in the Reducing Delinquent Accounts Receivable are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Receivable Accounts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Receivable Accounts 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.
Highly skilled collaborators
– Receivable Accounts 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 Reducing Delinquent Accounts Receivable HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Receivable Accounts is present in almost all the verticals within the industry. This has provided firm in Reducing Delinquent Accounts Receivable 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.
Effective Research and Development (R&D)
– Receivable Accounts 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 Reducing Delinquent Accounts Receivable - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Receivable Accounts 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 Receivable Accounts is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reducing Delinquent Accounts Receivable Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Receivable Accounts 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 Receivable Accounts in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Receivable Accounts 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.
Low bargaining power of suppliers
– Suppliers of Receivable Accounts in the sector have low bargaining power. Reducing Delinquent Accounts Receivable has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Receivable Accounts to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Receivable Accounts
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Receivable Accounts does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Reducing Delinquent Accounts Receivable | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reducing Delinquent Accounts Receivable are -
Workers concerns about automation
– As automation is fast increasing in the segment, Receivable Accounts needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reducing Delinquent Accounts Receivable 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 Receivable Accounts has relatively successful track record of launching new products.
Need for greater diversity
– Receivable Accounts 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.
Products dominated business model
– Even though Receivable Accounts 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 - Reducing Delinquent Accounts Receivable should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Receivable Accounts is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reducing Delinquent Accounts Receivable can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Reducing Delinquent Accounts Receivable HBR case study mentions - Receivable Accounts 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reducing Delinquent Accounts Receivable, it seems that the employees of Receivable Accounts don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 Receivable Accounts supply chain. Even after few cautionary changes mentioned in the HBR case study - Reducing Delinquent Accounts Receivable, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Receivable Accounts vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Receivable Accounts products
– To increase the profitability and margins on the products, Receivable Accounts needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Receivable Accounts 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Reducing Delinquent Accounts Receivable 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 Receivable Accounts 's lucrative customers.
Opportunities Reducing Delinquent Accounts Receivable | 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 Reducing Delinquent Accounts Receivable are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Receivable Accounts 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.
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. Receivable Accounts can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Receivable Accounts can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Receivable Accounts 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. Receivable Accounts 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.
Using analytics as competitive advantage
– Receivable Accounts 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 Reducing Delinquent Accounts Receivable - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Receivable Accounts to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Receivable Accounts 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 Receivable Accounts to hire the very best people irrespective of their geographical location.
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 Receivable Accounts 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.
Loyalty marketing
– Receivable Accounts 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.
Creating value in data economy
– The success of analytics program of Receivable Accounts has opened avenues for new revenue streams for the organization in the industry. This can help Receivable Accounts to build a more holistic ecosystem as suggested in the Reducing Delinquent Accounts Receivable case study. Receivable Accounts can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Receivable Accounts 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.
Buying journey improvements
– Receivable Accounts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reducing Delinquent Accounts Receivable 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.
Manufacturing automation
– Receivable Accounts 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.
Building a culture of innovation
– managers at Receivable Accounts 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 Reducing Delinquent Accounts Receivable External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reducing Delinquent Accounts Receivable are -
Increasing wage structure of Receivable Accounts
– 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 Receivable Accounts.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Receivable Accounts 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.
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. Receivable Accounts needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Receivable Accounts 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.
Stagnating economy with rate increase
– Receivable Accounts 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.
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. Receivable Accounts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Receivable Accounts 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 Receivable Accounts is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reducing Delinquent Accounts Receivable, Receivable Accounts 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 .
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 Receivable Accounts business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Receivable Accounts with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Receivable Accounts 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. Receivable Accounts can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Reducing Delinquent Accounts Receivable 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 Reducing Delinquent Accounts Receivable 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 Reducing Delinquent Accounts Receivable 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 Reducing Delinquent Accounts Receivable 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 Reducing Delinquent Accounts Receivable 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 Receivable Accounts needs to make to build a sustainable competitive advantage.
