Case Study Description of Winfield Refuse Management, Inc.: Raising Debt vs. Equity
A small, publicly traded company specializing in non-hazardous waste management considers a major acquisition in the Midwestern U.S. The acquisition can provide entry into the region, help the firm compete in a competitive industry, and improve its cost position. The company has a long-standing policy to avoid long term debt and until now has made a series of small acquisitions using only internal financing. The chief financial officer wants the board of directors to reconsider the policy and suggests funding the acquisition through a bond issue. Several company directors disagree and prefer that the firm issue common stock. Students must analyze the costs of issuing either a bond or common stock before making a final recommendation for financing the acquisition.
Swot Analysis of "Winfield Refuse Management, Inc.: Raising Debt vs. Equity" written by W. Carl Kester, Sunru Yong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Acquisition Bond facing as an external strategic factors. Some of the topics covered in Winfield Refuse Management, Inc.: Raising Debt vs. Equity case study are - Strategic Management Strategies, Budgeting, Costs, Financial analysis, Growth strategy, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Winfield Refuse Management, Inc.: Raising Debt vs. Equity casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Winfield Refuse Management, Inc.: Raising Debt vs. Equity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Winfield Refuse Management, Inc.: Raising Debt vs. Equity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Acquisition Bond, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Acquisition Bond 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity can be done for the following purposes –
1. Strategic planning using facts provided in Winfield Refuse Management, Inc.: Raising Debt vs. Equity case study
2. Improving business portfolio management of Acquisition Bond
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 Acquisition Bond
Strengths Winfield Refuse Management, Inc.: Raising Debt vs. Equity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Acquisition Bond in Winfield Refuse Management, Inc.: Raising Debt vs. Equity Harvard Business Review case study are -
High switching costs
– The high switching costs that Acquisition Bond 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 Acquisition Bond
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Acquisition Bond does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Acquisition Bond 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Finance & Accounting industry
– Winfield Refuse Management, Inc.: Raising Debt vs. Equity firm has clearly differentiated products in the market place. This has enabled Acquisition Bond to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Acquisition Bond to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Acquisition Bond in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Acquisition Bond is present in almost all the verticals within the industry. This has provided firm in Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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.
Cross disciplinary teams
– Horizontal connected teams at the Acquisition Bond 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.
Innovation driven organization
– Acquisition Bond is one of the most innovative firm in sector. Manager in Winfield Refuse Management, Inc.: Raising Debt vs. Equity Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Finance & Accounting field
– Acquisition Bond 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 Acquisition Bond in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Acquisition Bond in the sector have low bargaining power. Winfield Refuse Management, Inc.: Raising Debt vs. Equity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Acquisition Bond to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Acquisition Bond has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Acquisition Bond 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Acquisition Bond digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Acquisition Bond 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.
Weaknesses Winfield Refuse Management, Inc.: Raising Debt vs. Equity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Winfield Refuse Management, Inc.: Raising Debt vs. Equity are -
Workers concerns about automation
– As automation is fast increasing in the segment, Acquisition Bond 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 cash cycle compare to competitors
Acquisition Bond 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.
Lack of clear differentiation of Acquisition Bond products
– To increase the profitability and margins on the products, Acquisition Bond needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Winfield Refuse Management, Inc.: Raising Debt vs. Equity, is just above the industry average. Acquisition Bond 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Winfield Refuse Management, Inc.: Raising Debt vs. Equity, in the dynamic environment Acquisition Bond has struggled to respond to the nimble upstart competition. Acquisition Bond has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Winfield Refuse Management, Inc.: Raising Debt vs. Equity, it seems that the employees of Acquisition Bond 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.
Capital Spending Reduction
– Even during the low interest decade, Acquisition Bond has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Acquisition Bond 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. Acquisition Bond 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.
Interest costs
– Compare to the competition, Acquisition Bond 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 Acquisition Bond is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Acquisition Bond needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Acquisition Bond to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Acquisition Bond 's lucrative customers.
Opportunities Winfield Refuse Management, Inc.: Raising Debt vs. Equity | 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity are -
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. Acquisition Bond can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Acquisition Bond 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Acquisition Bond to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Acquisition Bond 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.
Buying journey improvements
– Acquisition Bond can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Acquisition Bond 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.
Creating value in data economy
– The success of analytics program of Acquisition Bond has opened avenues for new revenue streams for the organization in the industry. This can help Acquisition Bond to build a more holistic ecosystem as suggested in the Winfield Refuse Management, Inc.: Raising Debt vs. Equity case study. Acquisition Bond can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Acquisition Bond 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Acquisition Bond can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Acquisition Bond can use these opportunities to build new business models that can help the communities that Acquisition Bond operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Acquisition Bond is facing challenges because of the dominance of functional experts in the organization. Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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.
Manufacturing automation
– Acquisition Bond 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Acquisition Bond 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, Winfield Refuse Management, Inc.: Raising Debt vs. Equity, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Acquisition Bond 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.
Threats Winfield Refuse Management, Inc.: Raising Debt vs. Equity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Winfield Refuse Management, Inc.: Raising Debt vs. Equity are -
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 Acquisition Bond in the Finance & Accounting sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Acquisition Bond 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.
Stagnating economy with rate increase
– Acquisition Bond 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.
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 Acquisition Bond business can come under increasing regulations regarding data privacy, data security, 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity, Acquisition Bond 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 .
Environmental challenges
– Acquisition Bond 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. Acquisition Bond can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Acquisition Bond is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Acquisition Bond 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity .
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. Acquisition Bond can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Acquisition Bond
– 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 Acquisition Bond.
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.
Regulatory challenges
– Acquisition Bond 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.
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. Acquisition Bond 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.
Weighted SWOT Analysis of Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Winfield Refuse Management, Inc.: Raising Debt vs. Equity 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 Acquisition Bond needs to make to build a sustainable competitive advantage.