Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans
Provides a brief overview of employee stock ownership plans (ESOPs) and phantom stock plans for owners of closely held companies. ESOPs can be used as a tool of corporate financing, and can provide employees with ownership interests. Phantom stock plans can reward executives for value creation without giving up ownership. Covers typical company motives for establishing such plans, regulation, tax advantages, administrative costs, issues of corporate governance, and payment of plan benefit. Includes a two-page bibliography with references to further sources of legal and tax information.
Swot Analysis of "Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans" written by Dwight B. Crane, Indra A. Reinbergs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esops Phantom facing as an external strategic factors. Some of the topics covered in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans case study are - Strategic Management Strategies, Compensation, Financial management, Personnel policies, Succession planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing energy prices, there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esops Phantom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esops Phantom 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans can be done for the following purposes –
1. Strategic planning using facts provided in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans case study
2. Improving business portfolio management of Esops Phantom
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 Esops Phantom
Strengths Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esops Phantom in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans Harvard Business Review case study are -
High switching costs
– The high switching costs that Esops Phantom 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.
Organizational Resilience of Esops Phantom
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Esops Phantom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Esops Phantom is one of the leading recruiters in the industry. Managers in the Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Esops Phantom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Esops Phantom 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.
Superior customer experience
– The customer experience strategy of Esops Phantom in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Esops Phantom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Esops Phantom 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.
High brand equity
– Esops Phantom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Esops Phantom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Esops Phantom 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.
Operational resilience
– The operational resilience strategy in the Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Innovation driven organization
– Esops Phantom is one of the most innovative firm in sector. Manager in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Esops Phantom 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Esops Phantom 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 Esops Phantom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans are -
Aligning sales with marketing
– It come across in the case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans can leverage the sales team experience to cultivate customer relationships as Esops Phantom is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Esops Phantom 's lucrative customers.
Slow to strategic competitive environment developments
– As Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans HBR case study mentions - Esops Phantom 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans, is just above the industry average. Esops Phantom 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.
Low market penetration in new markets
– Outside its home market of Esops Phantom, firm in the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Esops Phantom 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.
No frontier risks strategy
– After analyzing the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans, it seems that the employees of Esops Phantom 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Esops Phantom is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Esops Phantom 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 - Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Esops Phantom 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. Esops Phantom 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.
Opportunities Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans | 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans are -
Loyalty marketing
– Esops Phantom 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.
Leveraging digital technologies
– Esops Phantom 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.
Better consumer reach
– The expansion of the 5G network will help Esops Phantom to increase its market reach. Esops Phantom will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Esops Phantom 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Esops Phantom can use these opportunities to build new business models that can help the communities that Esops Phantom operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Esops Phantom 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Esops Phantom 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.
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 Esops Phantom 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.
Buying journey improvements
– Esops Phantom can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Esops Phantom 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.
Using analytics as competitive advantage
– Esops Phantom 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Esops Phantom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Esops Phantom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Esops Phantom is facing challenges because of the dominance of functional experts in the organization. Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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.
Threats Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans are -
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 Esops Phantom.
Consumer confidence and its impact on Esops Phantom 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
– Esops Phantom 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. Esops Phantom 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.
Technology acceleration in Forth Industrial Revolution
– Esops Phantom has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Esops Phantom 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.
Increasing wage structure of Esops Phantom
– 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 Esops Phantom.
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 Esops Phantom business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Esops Phantom 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans .
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. Esops Phantom 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 Esops Phantom is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Esops Phantom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Note on Employee Stock Ownership Plans (ESOPs) and Phantom Stock Plans 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 Esops Phantom needs to make to build a sustainable competitive advantage.