O.M. Scott & Sons Co. Leveraged Buyout SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of O.M. Scott & Sons Co. Leveraged Buyout
Documents the organizational changes that took place at O.M. Scott & Sons Co. in response to their leveraged buyout. Provides the opportunity for students to discuss the effects of high leverage on management decision making, and the differences between operating as a small subsidiary of a large conglomerate and as a free-standing company. Focuses on the role of the LBO sponsor in the management of the company, the role of restrictive debt covenants, and the effect of changes in the compensation system at the company.
Authors :: George P. Baker, Karen H. Wruck, Toby Stuart
Swot Analysis of "O.M. Scott & Sons Co. Leveraged Buyout" written by George P. Baker, Karen H. Wruck, Toby Stuart includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that O.m Sons facing as an external strategic factors. Some of the topics covered in O.M. Scott & Sons Co. Leveraged Buyout case study are - Strategic Management Strategies, Change management, Costs, Mergers & acquisitions, Organizational structure and Finance & Accounting.
Some of the macro environment factors that can be used to understand the O.M. Scott & Sons Co. Leveraged Buyout casestudy better are - – technology disruption, increasing commodity prices, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing transportation and logistics costs, geopolitical disruptions,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of O.M. Scott & Sons Co. Leveraged Buyout
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in O.M. Scott & Sons Co. Leveraged Buyout case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the O.m Sons, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which O.m Sons 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 O.M. Scott & Sons Co. Leveraged Buyout can be done for the following purposes –
1. Strategic planning using facts provided in O.M. Scott & Sons Co. Leveraged Buyout case study
2. Improving business portfolio management of O.m Sons
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 O.m Sons
Strengths O.M. Scott & Sons Co. Leveraged Buyout | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of O.m Sons in O.M. Scott & Sons Co. Leveraged Buyout Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of O.m Sons in the sector have low bargaining power. O.M. Scott & Sons Co. Leveraged Buyout has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps O.m Sons to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– O.m Sons 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 O.M. Scott & Sons Co. Leveraged Buyout HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- O.m Sons 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 O.m Sons is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in O.M. Scott & Sons Co. Leveraged Buyout Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– O.m Sons is one of the leading recruiters in the industry. Managers in the O.M. Scott & Sons Co. Leveraged Buyout are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– O.m Sons is present in almost all the verticals within the industry. This has provided firm in O.M. Scott & Sons Co. Leveraged Buyout 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For O.m Sons digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. O.m Sons 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.
Strong track record of project management
– O.m Sons is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of O.m Sons in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– O.m Sons 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 George P. Baker, Karen H. Wruck, Toby Stuart 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.
High brand equity
– O.m Sons has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled O.m Sons to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– O.M. Scott & Sons Co. Leveraged Buyout firm has clearly differentiated products in the market place. This has enabled O.m Sons to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped O.m Sons to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– O.m Sons 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 O.m Sons in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses O.M. Scott & Sons Co. Leveraged Buyout | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of O.M. Scott & Sons Co. Leveraged Buyout are -
High cash cycle compare to competitors
O.m Sons 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, O.m Sons is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study O.M. Scott & Sons Co. Leveraged Buyout can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at O.m Sons 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.
Slow to strategic competitive environment developments
– As O.M. Scott & Sons Co. Leveraged Buyout HBR case study mentions - O.m Sons 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, O.m Sons 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.
Interest costs
– Compare to the competition, O.m Sons 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.
Low market penetration in new markets
– Outside its home market of O.m Sons, firm in the HBR case study O.M. Scott & Sons Co. Leveraged Buyout needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of O.m Sons products
– To increase the profitability and margins on the products, O.m Sons needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study O.M. Scott & Sons Co. Leveraged Buyout, 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.
Increasing silos among functional specialists
– The organizational structure of O.m Sons is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. O.m Sons needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help O.m Sons 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 O.M. Scott & Sons Co. Leveraged Buyout, is just above the industry average. O.m Sons 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.
Opportunities O.M. Scott & Sons Co. Leveraged Buyout | 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 O.M. Scott & Sons Co. Leveraged Buyout are -
Manufacturing automation
– O.m Sons 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.
Loyalty marketing
– O.m Sons 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.
Using analytics as competitive advantage
– O.m Sons 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 O.M. Scott & Sons Co. Leveraged Buyout - to build a competitive advantage using analytics. The analytics driven competitive advantage can help O.m Sons to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, O.m Sons can use these opportunities to build new business models that can help the communities that O.m Sons operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help O.m Sons to increase its market reach. O.m Sons 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, O.m Sons is facing challenges because of the dominance of functional experts in the organization. O.M. Scott & Sons Co. Leveraged Buyout 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.
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. O.m Sons can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for O.m Sons 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.
Buying journey improvements
– O.m Sons can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. O.M. Scott & Sons Co. Leveraged Buyout 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, O.m Sons 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.
Developing new processes and practices
– O.m Sons 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.
Leveraging digital technologies
– O.m Sons 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, O.m Sons 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, O.M. Scott & Sons Co. Leveraged Buyout, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats O.M. Scott & Sons Co. Leveraged Buyout External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study O.M. Scott & Sons Co. Leveraged Buyout are -
Shortening product life cycle
– it is one of the major threat that O.m Sons is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– O.m Sons 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. O.m Sons can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. O.m Sons needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– O.m Sons 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study O.M. Scott & Sons Co. Leveraged Buyout, O.m Sons 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 .
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. O.m Sons 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents O.m Sons with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, O.m Sons 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 O.M. Scott & Sons Co. Leveraged Buyout .
Stagnating economy with rate increase
– O.m Sons 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 acceleration in Forth Industrial Revolution
– O.m Sons has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, O.m Sons 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.
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 O.m Sons business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for O.m Sons 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.
Weighted SWOT Analysis of O.M. Scott & Sons Co. Leveraged Buyout 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 O.M. Scott & Sons Co. Leveraged Buyout 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 O.M. Scott & Sons Co. Leveraged Buyout 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 O.M. Scott & Sons Co. Leveraged Buyout 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 O.M. Scott & Sons Co. Leveraged Buyout 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 O.m Sons needs to make to build a sustainable competitive advantage.
