SIPEF: Biological Assets at Fair Value under IAS 41 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SIPEF: Biological Assets at Fair Value under IAS 41
This case examines fair value accounting under lAS 41 for a European-listed agricultural firm. Students identify the firm's core operations, distinguishing the IFRS treatment for three distinct assets: land; agricultural assets that reside on the land; and inventory harvested from the land. They also analyze key reporting decisions relating to the agricultural assets, which create frictions such that market value and book value do not converge despite the application of fair value for the majority of the firm's assets. The case also highlights how fair value accounting affects key valuation inputs such as earnings, and the implications for abnormal-earnings based valuation.
Swot Analysis of "SIPEF: Biological Assets at Fair Value under IAS 41" written by Edward J. Riedl, Kristin Meyer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Assets Fair facing as an external strategic factors. Some of the topics covered in SIPEF: Biological Assets at Fair Value under IAS 41 case study are - Strategic Management Strategies, Financial analysis, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the SIPEF: Biological Assets at Fair Value under IAS 41 casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, supply chains are disrupted by pandemic , there is backlash against globalization, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
wage bills are increasing, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of SIPEF: Biological Assets at Fair Value under IAS 41
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SIPEF: Biological Assets at Fair Value under IAS 41 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Assets Fair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Assets Fair 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 SIPEF: Biological Assets at Fair Value under IAS 41 can be done for the following purposes –
1. Strategic planning using facts provided in SIPEF: Biological Assets at Fair Value under IAS 41 case study
2. Improving business portfolio management of Assets Fair
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 Assets Fair
Strengths SIPEF: Biological Assets at Fair Value under IAS 41 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Assets Fair in SIPEF: Biological Assets at Fair Value under IAS 41 Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Assets Fair in the sector have low bargaining power. SIPEF: Biological Assets at Fair Value under IAS 41 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Assets Fair to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Assets Fair is one of the most innovative firm in sector. Manager in SIPEF: Biological Assets at Fair Value under IAS 41 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Assets Fair 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.
Cross disciplinary teams
– Horizontal connected teams at the Assets Fair are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Assets Fair 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 Edward J. Riedl, Kristin Meyer 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.
Training and development
– Assets Fair has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SIPEF: Biological Assets at Fair Value under IAS 41 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.
Ability to recruit top talent
– Assets Fair is one of the leading recruiters in the industry. Managers in the SIPEF: Biological Assets at Fair Value under IAS 41 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Assets Fair in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Assets Fair has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Assets Fair to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– SIPEF: Biological Assets at Fair Value under IAS 41 firm has clearly differentiated products in the market place. This has enabled Assets Fair to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Assets Fair to invest into research and development (R&D) and innovation.
Organizational Resilience of Assets Fair
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Assets Fair does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Assets Fair 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 Assets Fair is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SIPEF: Biological Assets at Fair Value under IAS 41 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses SIPEF: Biological Assets at Fair Value under IAS 41 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SIPEF: Biological Assets at Fair Value under IAS 41 are -
Low market penetration in new markets
– Outside its home market of Assets Fair, firm in the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41, 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.
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 Assets Fair supply chain. Even after few cautionary changes mentioned in the HBR case study - SIPEF: Biological Assets at Fair Value under IAS 41, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Assets Fair vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Assets Fair 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.
High cash cycle compare to competitors
Assets Fair 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.
Products dominated business model
– Even though Assets Fair has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - SIPEF: Biological Assets at Fair Value under IAS 41 should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41 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 Assets Fair 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41, it seems that the employees of Assets Fair 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Assets Fair is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SIPEF: Biological Assets at Fair Value under IAS 41 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41, is just above the industry average. Assets Fair 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.
Lack of clear differentiation of Assets Fair products
– To increase the profitability and margins on the products, Assets Fair needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities SIPEF: Biological Assets at Fair Value under IAS 41 | 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 SIPEF: Biological Assets at Fair Value under IAS 41 are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Assets Fair 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 Assets Fair to hire the very best people irrespective of their geographical location.
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. Assets Fair 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. Assets Fair 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
– Assets Fair 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Assets Fair can use these opportunities to build new business models that can help the communities that Assets Fair operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Assets Fair can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Assets Fair 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Assets Fair is facing challenges because of the dominance of functional experts in the organization. SIPEF: Biological Assets at Fair Value under IAS 41 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Assets Fair 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, SIPEF: Biological Assets at Fair Value under IAS 41, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Assets Fair 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.
Creating value in data economy
– The success of analytics program of Assets Fair has opened avenues for new revenue streams for the organization in the industry. This can help Assets Fair to build a more holistic ecosystem as suggested in the SIPEF: Biological Assets at Fair Value under IAS 41 case study. Assets Fair 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 Assets Fair in the consumer business. Now Assets Fair can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Assets Fair 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 SIPEF: Biological Assets at Fair Value under IAS 41 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Assets Fair to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Assets Fair to increase its market reach. Assets Fair 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.
Threats SIPEF: Biological Assets at Fair Value under IAS 41 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SIPEF: Biological Assets at Fair Value under IAS 41 are -
Environmental challenges
– Assets Fair 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. Assets Fair can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Assets Fair needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Assets Fair 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Assets Fair 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
– Assets Fair 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.
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 Assets Fair in the Finance & Accounting sector and impact the bottomline of the organization.
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 Assets Fair business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SIPEF: Biological Assets at Fair Value under IAS 41, Assets Fair 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 .
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.
Regulatory challenges
– Assets Fair 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.
Stagnating economy with rate increase
– Assets Fair 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.
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. Assets Fair 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.
Increasing wage structure of Assets Fair
– 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 Assets Fair.
Weighted SWOT Analysis of SIPEF: Biological Assets at Fair Value under IAS 41 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 SIPEF: Biological Assets at Fair Value under IAS 41 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 SIPEF: Biological Assets at Fair Value under IAS 41 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 SIPEF: Biological Assets at Fair Value under IAS 41 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 SIPEF: Biological Assets at Fair Value under IAS 41 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 Assets Fair needs to make to build a sustainable competitive advantage.