Case Study Description of Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making
This case raises a number of issues related to the exercise of managerial judgment in financial reporting. Specifically, the case requires students to estimate the warranty expense for a start-up company and requires the explicit consideration of the ethical issues that arise in the estimation process. Students are forced to consider the trade-offs that occur when estimating warranty expense: the impact on accounting earnings, materiality, income vs. cash flows, earnings management, ethical decision-making, and entrepreneurship. This case is excellent when used to introduce and discuss accrual accounting and the logic for estimating expenses. The case is used in the first year Financial Reporting course in the Babson MBA program after students have taken an on-line module in ethical decision-making. With the appendix, it is also used in the Babson undergraduate first-year course, Introduction to Financial Accounting. While an ethics-learning unit is not necessarily a pre-requisite for the case, students will need to have been exposed to the three philosophies of ethical thought referred to in the case (Duty, Consequences, and Character) and included as an appendix to the case.
Swot Analysis of "Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making" written by Michael Fetters, Peter Wilson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Warranty Ethical facing as an external strategic factors. Some of the topics covered in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making casestudy better are - – challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Warranty Ethical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Warranty Ethical 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making can be done for the following purposes –
1. Strategic planning using facts provided in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making case study
2. Improving business portfolio management of Warranty Ethical
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 Warranty Ethical
Strengths Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Warranty Ethical in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making Harvard Business Review case study are -
Innovation driven organization
– Warranty Ethical is one of the most innovative firm in sector. Manager in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Warranty Ethical is present in almost all the verticals within the industry. This has provided firm in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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.
High brand equity
– Warranty Ethical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Warranty Ethical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Warranty Ethical in the sector have low bargaining power. Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Warranty Ethical to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Warranty Ethical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Warranty Ethical is one of the leading recruiters in the industry. Managers in the Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Warranty Ethical has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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.
Superior customer experience
– The customer experience strategy of Warranty Ethical in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Warranty Ethical
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Warranty Ethical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Warranty Ethical 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 Michael Fetters, Peter Wilson 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.
Ability to lead change in Finance & Accounting field
– Warranty Ethical 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 Warranty Ethical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Warranty Ethical 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making are -
Slow decision making process
– As mentioned earlier in the report, Warranty Ethical 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. Warranty Ethical 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.
Need for greater diversity
– Warranty Ethical has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Warranty Ethical has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making HBR case study mentions - Warranty Ethical 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.
Products dominated business model
– Even though Warranty Ethical 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 - Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Warranty Ethical 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making, 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.
High cash cycle compare to competitors
Warranty Ethical 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.
Increasing silos among functional specialists
– The organizational structure of Warranty Ethical is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Warranty Ethical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Warranty Ethical to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making, is just above the industry average. Warranty Ethical 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.
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 Warranty Ethical supply chain. Even after few cautionary changes mentioned in the HBR case study - Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Warranty Ethical vulnerable to further global disruptions in South East Asia.
Opportunities Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making | 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Warranty Ethical 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, Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Warranty Ethical can use these opportunities to build new business models that can help the communities that Warranty Ethical operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Warranty Ethical 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.
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. Warranty Ethical 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. Warranty Ethical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Warranty Ethical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Warranty Ethical has opened avenues for new revenue streams for the organization in the industry. This can help Warranty Ethical to build a more holistic ecosystem as suggested in the Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making case study. Warranty Ethical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Warranty Ethical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Warranty Ethical 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.
Manufacturing automation
– Warranty Ethical 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.
Leveraging digital technologies
– Warranty Ethical 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.
Loyalty marketing
– Warranty Ethical 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.
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. Warranty Ethical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Warranty Ethical 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.
Threats Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making are -
Environmental challenges
– Warranty Ethical 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. Warranty Ethical can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Warranty Ethical 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.
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.
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 Warranty Ethical in the Finance & Accounting sector and impact the bottomline 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. Warranty Ethical 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.
Technology acceleration in Forth Industrial Revolution
– Warranty Ethical has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Warranty Ethical 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making, Warranty Ethical 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 .
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. Warranty Ethical needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Warranty Ethical 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 Warranty Ethical.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Warranty Ethical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Warranty Ethical business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Y&D Audio Warranty Policies: Accrual Estimates and Ethical Decision-Making 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 Warranty Ethical needs to make to build a sustainable competitive advantage.
