Swot Analysis of "Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note" written by Robert S. Kaplan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Budgets Flexible facing as an external strategic factors. Some of the topics covered in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note case study are - Strategic Management Strategies, Budgeting, Business processes, Collaboration, Costs, Strategy execution and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
technology disruption, wage bills are increasing, etc
Introduction to SWOT Analysis of Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Budgets Flexible, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Budgets Flexible 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note can be done for the following purposes –
1. Strategic planning using facts provided in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note case study
2. Improving business portfolio management of Budgets Flexible
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 Budgets Flexible
Strengths Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Budgets Flexible in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Budgets Flexible 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 Budgets Flexible in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Budgets Flexible 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Budgets Flexible has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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.
Innovation driven organization
– Budgets Flexible is one of the most innovative firm in sector. Manager in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Budgets Flexible is one of the leading recruiters in the industry. Managers in the Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Budgets Flexible has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Budgets Flexible is present in almost all the verticals within the industry. This has provided firm in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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.
Low bargaining power of suppliers
– Suppliers of Budgets Flexible in the sector have low bargaining power. Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Budgets Flexible to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Budgets Flexible digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Budgets Flexible 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.
Successful track record of launching new products
– Budgets Flexible has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Budgets Flexible 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.
Strong track record of project management
– Budgets Flexible is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Budgets Flexible 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 Budgets Flexible is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note are -
Interest costs
– Compare to the competition, Budgets Flexible 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.
Skills based hiring
– The stress on hiring functional specialists at Budgets Flexible 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.
Low market penetration in new markets
– Outside its home market of Budgets Flexible, firm in the HBR case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Budgets Flexible 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Budgets Flexible has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note, is just above the industry average. Budgets Flexible 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.
Aligning sales with marketing
– It come across in the case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note can leverage the sales team experience to cultivate customer relationships as Budgets Flexible is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Budgets Flexible 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.
Increasing silos among functional specialists
– The organizational structure of Budgets Flexible is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Budgets Flexible needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Budgets Flexible to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Budgets Flexible 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.
Opportunities Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note | 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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. Budgets Flexible can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Budgets Flexible to increase its market reach. Budgets Flexible 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Budgets Flexible 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.
Building a culture of innovation
– managers at Budgets Flexible 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.
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 Budgets Flexible 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.
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. Budgets Flexible 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. Budgets Flexible 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.
Leveraging digital technologies
– Budgets Flexible 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.
Loyalty marketing
– Budgets Flexible has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Budgets Flexible 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.
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 Budgets Flexible in the consumer business. Now Budgets Flexible can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Budgets Flexible is facing challenges because of the dominance of functional experts in the organization. Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Budgets Flexible 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Budgets Flexible can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Budgets Flexible in the Finance & Accounting sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Budgets Flexible 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note, Budgets Flexible 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
– Budgets Flexible 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. Budgets Flexible can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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 Budgets Flexible.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Budgets Flexible 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Budgets Flexible with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Budgets Flexible has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Budgets Flexible 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.
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. Budgets Flexible needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Budgets Flexible
– 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 Budgets Flexible.
High dependence on third party suppliers
– Budgets Flexible 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.
Weighted SWOT Analysis of Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Assigning Support Department Expenses to Production Cost Centers (B): Flexible Budgets, Technical Note 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 Budgets Flexible needs to make to build a sustainable competitive advantage.
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