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AOL Time Warner (B): Recognition of Goodwill Impairment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of AOL Time Warner (B): Recognition of Goodwill Impairment


Reviews the recognition of goodwill impairment taken by AOL Time Warner following the adoption of SFAS 142--Goodwill and Other Intangible Assets.

Authors :: Ron Kasznik, Brian Tayan

Topics :: Finance & Accounting

Tags :: Budgeting, Mergers & acquisitions, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "AOL Time Warner (B): Recognition of Goodwill Impairment" written by Ron Kasznik, Brian Tayan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Goodwill Impairment facing as an external strategic factors. Some of the topics covered in AOL Time Warner (B): Recognition of Goodwill Impairment case study are - Strategic Management Strategies, Budgeting, Mergers & acquisitions and Finance & Accounting.


Some of the macro environment factors that can be used to understand the AOL Time Warner (B): Recognition of Goodwill Impairment casestudy better are - – technology disruption, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, wage bills are increasing, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc



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Introduction to SWOT Analysis of AOL Time Warner (B): Recognition of Goodwill Impairment


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AOL Time Warner (B): Recognition of Goodwill Impairment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goodwill Impairment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment can be done for the following purposes –
1. Strategic planning using facts provided in AOL Time Warner (B): Recognition of Goodwill Impairment case study
2. Improving business portfolio management of Goodwill Impairment
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 Goodwill Impairment




Strengths AOL Time Warner (B): Recognition of Goodwill Impairment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Goodwill Impairment in AOL Time Warner (B): Recognition of Goodwill Impairment Harvard Business Review case study are -

Ability to recruit top talent

– Goodwill Impairment is one of the leading recruiters in the industry. Managers in the AOL Time Warner (B): Recognition of Goodwill Impairment 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

– AOL Time Warner (B): Recognition of Goodwill Impairment firm has clearly differentiated products in the market place. This has enabled Goodwill Impairment to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Goodwill Impairment to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of Goodwill Impairment in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Goodwill Impairment is one of the most innovative firm in sector. Manager in AOL Time Warner (B): Recognition of Goodwill Impairment Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Cross disciplinary teams

– Horizontal connected teams at the Goodwill Impairment 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.

Learning organization

- Goodwill Impairment 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 Goodwill Impairment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AOL Time Warner (B): Recognition of Goodwill Impairment Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Goodwill Impairment in the sector have low bargaining power. AOL Time Warner (B): Recognition of Goodwill Impairment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goodwill Impairment to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– Goodwill Impairment 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 Ron Kasznik, Brian Tayan 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.

High brand equity

– Goodwill Impairment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Goodwill Impairment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– Goodwill Impairment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goodwill Impairment 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.

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Goodwill Impairment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Goodwill Impairment 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.

Organizational Resilience of Goodwill Impairment

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Goodwill Impairment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.






Weaknesses AOL Time Warner (B): Recognition of Goodwill Impairment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of AOL Time Warner (B): Recognition of Goodwill Impairment are -

Interest costs

– Compare to the competition, Goodwill Impairment 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study AOL Time Warner (B): Recognition of Goodwill Impairment, is just above the industry average. Goodwill Impairment 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.

Slow decision making process

– As mentioned earlier in the report, Goodwill Impairment 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. Goodwill Impairment 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.

Workers concerns about automation

– As automation is fast increasing in the segment, Goodwill Impairment 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 to strategic competitive environment developments

– As AOL Time Warner (B): Recognition of Goodwill Impairment HBR case study mentions - Goodwill Impairment 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study AOL Time Warner (B): Recognition of Goodwill Impairment, it seems that the employees of Goodwill Impairment 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 cash cycle compare to competitors

Goodwill Impairment 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, Goodwill Impairment 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.

Products dominated business model

– Even though Goodwill Impairment 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 - AOL Time Warner (B): Recognition of Goodwill Impairment should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Goodwill Impairment products

– To increase the profitability and margins on the products, Goodwill Impairment needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of Goodwill Impairment, firm in the HBR case study AOL Time Warner (B): Recognition of Goodwill Impairment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.




Opportunities AOL Time Warner (B): Recognition of Goodwill Impairment | 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 AOL Time Warner (B): Recognition of Goodwill Impairment are -

Developing new processes and practices

– Goodwill Impairment 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Goodwill Impairment 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.

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. Goodwill Impairment 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. Goodwill Impairment 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.

Loyalty marketing

– Goodwill Impairment 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.

Using analytics as competitive advantage

– Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goodwill Impairment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Leveraging digital technologies

– Goodwill Impairment 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.

Learning at scale

– Online learning technologies has now opened space for Goodwill Impairment 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.

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. Goodwill Impairment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Manufacturing automation

– Goodwill Impairment 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Goodwill Impairment 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.

Better consumer reach

– The expansion of the 5G network will help Goodwill Impairment to increase its market reach. Goodwill Impairment 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.

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. Goodwill Impairment can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Goodwill Impairment 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.




Threats AOL Time Warner (B): Recognition of Goodwill Impairment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study AOL Time Warner (B): Recognition of Goodwill Impairment are -

Regulatory challenges

– Goodwill Impairment 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

– Goodwill Impairment 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.

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. Goodwill Impairment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Shortening product life cycle

– it is one of the major threat that Goodwill Impairment is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Goodwill Impairment 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 Goodwill Impairment business can come under increasing regulations regarding data privacy, data security, etc.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AOL Time Warner (B): Recognition of Goodwill Impairment, Goodwill Impairment 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. Goodwill Impairment 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.

Consumer confidence and its impact on Goodwill Impairment 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.

Technology acceleration in Forth Industrial Revolution

– Goodwill Impairment has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Goodwill Impairment 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.

Environmental challenges

– Goodwill Impairment 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. Goodwill Impairment can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment .




Weighted SWOT Analysis of AOL Time Warner (B): Recognition of Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment 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 AOL Time Warner (B): Recognition of Goodwill Impairment 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 Goodwill Impairment needs to make to build a sustainable competitive advantage.



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