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 - – technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, geopolitical disruptions, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, increasing energy prices, 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 -
Diverse revenue streams
– Spencer Tax is present in almost all the verticals within the industry. This has provided firm in Parker-Spencer: The Legal Form of Joint Ventures 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.
Analytics focus
– Spencer Tax 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 G. Peter Wilson, Jane Palley Katz 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.
Strong track record of project management
– Spencer Tax is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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 star products
– The top 2 products and services of the firm as mentioned in the Parker-Spencer: The Legal Form of Joint Ventures 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 Spencer Tax has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Spencer Tax 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 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.
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.
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.
Interest costs
– Compare to the competition, Spencer Tax 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Parker-Spencer: The Legal Form of Joint Ventures, it seems that the employees of Spencer Tax 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Parker-Spencer: The Legal Form of Joint Ventures 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 Spencer Tax 's lucrative customers.
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.
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 -
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.
Buying journey improvements
– Spencer Tax can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Parker-Spencer: The Legal Form of Joint Ventures 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.
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.
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.
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.
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.
Developing new processes and practices
– Spencer Tax 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.
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.
Using analytics as competitive advantage
– Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spencer Tax to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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 -
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.
Technology acceleration in Forth Industrial Revolution
– Spencer Tax has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Spencer Tax 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.
Stagnating economy with rate increase
– Spencer Tax 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Spencer Tax 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 Parker-Spencer: The Legal Form of Joint Ventures .
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.
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.
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.
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.
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.
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. Spencer Tax 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.
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 Spencer Tax.
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.
