Parker-Spencer: The Legal Form of Joint Ventures SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Parker-Spencer: The Legal Form of Joint Ventures
Parker Co., a U.S. based agricultural chemical company with $4 billion in sales, has agreed to a joint venture with Spencer, Inc., a smaller U.S. based company, to develop and market a new herbicide for corn. The two companies must consider marketing, tax, and liability issues to decide whether the new entity will be a corporation or a partnership. Demonstrates how various tax and non-tax factors affect the legal form of joint venture.
Swot Analysis of "Parker-Spencer: The Legal Form of Joint Ventures" written by G. Peter Wilson, Jane Palley Katz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Spencer Tax facing as an external strategic factors. Some of the topics covered in Parker-Spencer: The Legal Form of Joint Ventures case study are - Strategic Management Strategies, Policy, Regulation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Parker-Spencer: The Legal Form of Joint Ventures casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Parker-Spencer: The Legal Form of Joint Ventures
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Parker-Spencer: The Legal Form of Joint Ventures case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spencer Tax, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures can be done for the following purposes –
1. Strategic planning using facts provided in Parker-Spencer: The Legal Form of Joint Ventures case study
2. Improving business portfolio management of Spencer Tax
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 Spencer Tax
Strengths Parker-Spencer: The Legal Form of Joint Ventures | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spencer Tax in Parker-Spencer: The Legal Form of Joint Ventures Harvard Business Review case study are -
Organizational Resilience of Spencer Tax
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Spencer Tax does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Spencer Tax has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Parker-Spencer: The Legal Form of Joint Ventures 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.
Highly skilled collaborators
– Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Spencer Tax has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spencer Tax 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.
Effective Research and Development (R&D)
– Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Spencer Tax digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spencer Tax 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.
Low bargaining power of suppliers
– Suppliers of Spencer Tax in the sector have low bargaining power. Parker-Spencer: The Legal Form of Joint Ventures has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spencer Tax to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Spencer Tax 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 Spencer Tax is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Parker-Spencer: The Legal Form of Joint Ventures Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Spencer Tax has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spencer Tax to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Spencer Tax 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.
Operational resilience
– The operational resilience strategy in the Parker-Spencer: The Legal Form of Joint Ventures 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Parker-Spencer: The Legal Form of Joint Ventures firm has clearly differentiated products in the market place. This has enabled Spencer Tax to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Spencer Tax to invest into research and development (R&D) and innovation.
Weaknesses Parker-Spencer: The Legal Form of Joint Ventures | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Parker-Spencer: The Legal Form of Joint Ventures are -
No frontier risks strategy
– After analyzing the HBR case study Parker-Spencer: The Legal Form of Joint Ventures, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Parker-Spencer: The Legal Form of Joint Ventures, in the dynamic environment Spencer Tax has struggled to respond to the nimble upstart competition. Spencer Tax has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Spencer Tax, firm in the HBR case study Parker-Spencer: The Legal Form of Joint Ventures needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Spencer Tax products
– To increase the profitability and margins on the products, Spencer Tax needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Parker-Spencer: The Legal Form of Joint Ventures 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 Parker-Spencer: The Legal Form of Joint Ventures can leverage the sales team experience to cultivate customer relationships as Spencer Tax is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Spencer Tax 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.
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 Spencer Tax supply chain. Even after few cautionary changes mentioned in the HBR case study - Parker-Spencer: The Legal Form of Joint Ventures, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Spencer Tax vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Spencer Tax is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Spencer Tax needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spencer Tax to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Spencer Tax 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Parker-Spencer: The Legal Form of Joint Ventures, is just above the industry average. Spencer Tax 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.
High cash cycle compare to competitors
Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures | 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 Parker-Spencer: The Legal Form of Joint Ventures are -
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 Spencer Tax in the consumer business. Now Spencer Tax can target international markets with far fewer capital restrictions requirements than the existing system.
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. Spencer Tax can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Spencer Tax to increase its market reach. Spencer Tax 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.
Loyalty marketing
– Spencer Tax 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Spencer Tax 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 Spencer Tax has opened avenues for new revenue streams for the organization in the industry. This can help Spencer Tax to build a more holistic ecosystem as suggested in the Parker-Spencer: The Legal Form of Joint Ventures case study. Spencer Tax can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Spencer Tax can use these opportunities to build new business models that can help the communities that Spencer Tax operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Spencer Tax can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spencer Tax to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Spencer Tax to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Spencer Tax 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, Parker-Spencer: The Legal Form of Joint Ventures, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Spencer Tax 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.
Building a culture of innovation
– managers at Spencer Tax 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.
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. Spencer Tax 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. Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Parker-Spencer: The Legal Form of Joint Ventures are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Parker-Spencer: The Legal Form of Joint Ventures, Spencer Tax 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. Spencer Tax 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.
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. Spencer Tax can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Spencer Tax with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Spencer Tax in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Spencer Tax 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spencer Tax 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.
Environmental challenges
– Spencer Tax 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. Spencer Tax can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Spencer Tax demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Spencer Tax business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Spencer Tax is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Spencer Tax 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.
Weighted SWOT Analysis of Parker-Spencer: The Legal Form of Joint Ventures 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 Parker-Spencer: The Legal Form of Joint Ventures 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 Parker-Spencer: The Legal Form of Joint Ventures 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 Parker-Spencer: The Legal Form of Joint Ventures 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 Parker-Spencer: The Legal Form of Joint Ventures 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 Spencer Tax needs to make to build a sustainable competitive advantage.