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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, 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 -
Operational resilience
– The operational resilience strategy in the SIPEF: Biological Assets at Fair Value under IAS 41 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.
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.
Diverse revenue streams
– Assets Fair is present in almost all the verticals within the industry. This has provided firm in SIPEF: Biological Assets at Fair Value under IAS 41 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.
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.
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.
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.
Highly skilled collaborators
– Assets Fair 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 SIPEF: Biological Assets at Fair Value under IAS 41 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Assets Fair digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Assets Fair 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.
Ability to lead change in Finance & Accounting field
– Assets Fair 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 Assets Fair in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Assets Fair 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 SIPEF: Biological Assets at Fair Value under IAS 41 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Assets Fair has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Assets Fair 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.
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 -
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Assets Fair 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.
Slow decision making process
– As mentioned earlier in the report, Assets Fair has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Assets Fair even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Edward J. Riedl, Kristin Meyer suggests that, Assets Fair is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Skills based hiring
– The stress on hiring functional specialists at Assets Fair 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.
Increasing silos among functional specialists
– The organizational structure of Assets Fair is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Assets Fair needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Assets Fair to focus more on services rather than just following the product oriented approach.
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.
Slow to strategic competitive environment developments
– As SIPEF: Biological Assets at Fair Value under IAS 41 HBR case study mentions - Assets Fair takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 -
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Assets Fair 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.
Manufacturing automation
– Assets Fair 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Assets Fair to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 Assets Fair 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.
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. Assets Fair can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Assets Fair 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.
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.
Buying journey improvements
– Assets Fair can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SIPEF: Biological Assets at Fair Value under IAS 41 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.
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 -
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.
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 .
Shortening product life cycle
– it is one of the major threat that Assets Fair is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Assets Fair has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Assets Fair 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Assets Fair 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 SIPEF: Biological Assets at Fair Value under IAS 41 .
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.
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.
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.
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.
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.
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.
Consumer confidence and its impact on Assets Fair 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.
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.