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 - – talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
increasing commodity prices, cloud computing is disrupting traditional business models, 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 -
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.
Operational resilience
– The operational resilience strategy in the O.M. Scott & Sons Co. Leveraged Buyout 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.
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.
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.
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.
Organizational Resilience of O.m Sons
– The covid-19 pandemic has put organizational resilience at the centre of everthing that O.m Sons does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– O.m Sons has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. O.m Sons 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.
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.
Training and development
– O.m Sons has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in O.M. Scott & Sons Co. Leveraged Buyout Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that O.m Sons 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.
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.
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.
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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of O.m Sons supply chain. Even after few cautionary changes mentioned in the HBR case study - O.M. Scott & Sons Co. Leveraged Buyout, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left O.m Sons vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study O.M. Scott & Sons Co. Leveraged Buyout, it seems that the employees of O.m Sons 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.
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 decision making process
– As mentioned earlier in the report, O.m Sons 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. O.m Sons 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.
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.
Capital Spending Reduction
– Even during the low interest decade, O.m Sons 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study O.M. Scott & Sons Co. Leveraged Buyout, in the dynamic environment O.m Sons has struggled to respond to the nimble upstart competition. O.m Sons has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– O.m Sons has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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.
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 -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for O.m Sons 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.
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.
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.
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.
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.
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.
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.
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 O.m Sons in the consumer business. Now O.m Sons can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Creating value in data economy
– The success of analytics program of O.m Sons has opened avenues for new revenue streams for the organization in the industry. This can help O.m Sons to build a more holistic ecosystem as suggested in the O.M. Scott & Sons Co. Leveraged Buyout case study. O.m Sons can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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. O.m Sons 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. O.m Sons 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.
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 -
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.
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 .
Regulatory challenges
– O.m Sons 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. 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.
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 .
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.
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.
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.
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 O.m Sons.
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.
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 O.m Sons in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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 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.