Accounting for the iPhone Upgrade Program (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Accounting for the iPhone Upgrade Program (A)
On September 9, 2015, Apple Inc. announced the "iPhone Upgrade Program," a new way to purchase iPhone models 6s and 6s Plus in Apple's retail stores throughout the U.S. Next to the strategic implications of the Upgrade Program, financial analysts tried to understand the accounting implications, especially the recognition of revenue, which the Upgrade Program could have on Apple's financials. Analysts' reactions to the disclosure were mixed. Was Apple's accounting system "right" for the iPhone Upgrade Program introduced in 2015?
Authors :: Jonas Heese, Krishna G. Palepu, H. David Sherman, Monica Baraldi
Swot Analysis of "Accounting for the iPhone Upgrade Program (A)" written by Jonas Heese, Krishna G. Palepu, H. David Sherman, Monica Baraldi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Upgrade Iphone facing as an external strategic factors. Some of the topics covered in Accounting for the iPhone Upgrade Program (A) case study are - Strategic Management Strategies, International business, Mobile and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Accounting for the iPhone Upgrade Program (A) casestudy better are - – increasing government debt because of Covid-19 spendings, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
Introduction to SWOT Analysis of Accounting for the iPhone Upgrade Program (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Accounting for the iPhone Upgrade Program (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Upgrade Iphone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Upgrade Iphone 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 Accounting for the iPhone Upgrade Program (A) can be done for the following purposes –
1. Strategic planning using facts provided in Accounting for the iPhone Upgrade Program (A) case study
2. Improving business portfolio management of Upgrade Iphone
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 Upgrade Iphone
Strengths Accounting for the iPhone Upgrade Program (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Upgrade Iphone in Accounting for the iPhone Upgrade Program (A) Harvard Business Review case study are -
Learning organization
- Upgrade Iphone 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 Upgrade Iphone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Accounting for the iPhone Upgrade Program (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Upgrade Iphone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Upgrade Iphone 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.
Low bargaining power of suppliers
– Suppliers of Upgrade Iphone in the sector have low bargaining power. Accounting for the iPhone Upgrade Program (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Upgrade Iphone to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Upgrade Iphone 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.
Superior customer experience
– The customer experience strategy of Upgrade Iphone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Upgrade Iphone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Upgrade Iphone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Upgrade Iphone 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 Accounting for the iPhone Upgrade Program (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Upgrade Iphone 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
– Upgrade Iphone is one of the leading recruiters in the industry. Managers in the Accounting for the iPhone Upgrade Program (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Upgrade Iphone is one of the most innovative firm in sector. Manager in Accounting for the iPhone Upgrade Program (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– Accounting for the iPhone Upgrade Program (A) firm has clearly differentiated products in the market place. This has enabled Upgrade Iphone to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Upgrade Iphone to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Upgrade Iphone 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 Accounting for the iPhone Upgrade Program (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Accounting for the iPhone Upgrade Program (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Accounting for the iPhone Upgrade Program (A) are -
Interest costs
– Compare to the competition, Upgrade Iphone 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.
Increasing silos among functional specialists
– The organizational structure of Upgrade Iphone is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Upgrade Iphone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Upgrade Iphone to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Accounting for the iPhone Upgrade Program (A) HBR case study mentions - Upgrade Iphone 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Upgrade Iphone 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Accounting for the iPhone Upgrade Program (A), in the dynamic environment Upgrade Iphone has struggled to respond to the nimble upstart competition. Upgrade Iphone 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 Upgrade Iphone 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 - Accounting for the iPhone Upgrade Program (A) should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Accounting for the iPhone Upgrade Program (A), is just above the industry average. Upgrade Iphone needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Upgrade Iphone products
– To increase the profitability and margins on the products, Upgrade Iphone needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Accounting for the iPhone Upgrade Program (A) 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 Upgrade Iphone has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Jonas Heese, Krishna G. Palepu, H. David Sherman, Monica Baraldi suggests that, Upgrade Iphone 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.
Skills based hiring
– The stress on hiring functional specialists at Upgrade Iphone 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.
Opportunities Accounting for the iPhone Upgrade Program (A) | 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 Accounting for the iPhone Upgrade Program (A) 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 Upgrade Iphone 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.
Developing new processes and practices
– Upgrade Iphone 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.
Learning at scale
– Online learning technologies has now opened space for Upgrade Iphone 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.
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 Upgrade Iphone in the consumer business. Now Upgrade Iphone can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Upgrade Iphone 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.
Manufacturing automation
– Upgrade Iphone can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Upgrade Iphone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Upgrade Iphone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Accounting for the iPhone Upgrade Program (A) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Upgrade Iphone is facing challenges because of the dominance of functional experts in the organization. Accounting for the iPhone Upgrade Program (A) 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.
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. Upgrade Iphone 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. Upgrade Iphone 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Upgrade Iphone can use these opportunities to build new business models that can help the communities that Upgrade Iphone operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Upgrade Iphone 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, Accounting for the iPhone Upgrade Program (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Upgrade Iphone 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 Accounting for the iPhone Upgrade Program (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Accounting for the iPhone Upgrade Program (A) are -
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.
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 Upgrade Iphone business can come under increasing regulations regarding data privacy, data security, etc.
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 Upgrade Iphone in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Upgrade Iphone 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.
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. Upgrade Iphone 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.
Environmental challenges
– Upgrade Iphone 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. Upgrade Iphone can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Upgrade Iphone has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Upgrade Iphone 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.
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 Upgrade Iphone.
High dependence on third party suppliers
– Upgrade Iphone 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.
Regulatory challenges
– Upgrade Iphone 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Upgrade Iphone 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Upgrade Iphone 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 Accounting for the iPhone Upgrade Program (A) .
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.
Weighted SWOT Analysis of Accounting for the iPhone Upgrade Program (A) 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 Accounting for the iPhone Upgrade Program (A) 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 Accounting for the iPhone Upgrade Program (A) 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 Accounting for the iPhone Upgrade Program (A) 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 Accounting for the iPhone Upgrade Program (A) 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 Upgrade Iphone needs to make to build a sustainable competitive advantage.