Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms
The merger between China's ShineWing Certified Public Accountants and Hong Kong firm Ho and Ho & Company came at a time when most indigenous Chinese CPA practices had fled independence by either merging with one of the four global firms dominating the industry or joining international networks in order to address the increasing globalization of China's capital market. Between 2002 and 2006, China's CPA market more than doubled in revenue size, and the share captured by the big four grew from 37% to 53%. The founder of ShineWing was optimistic that, under the current outlook, China presented the right economic conditions to nurture its own global brand of CPA firm. If he was right, what remained to be defined was a strategy to achieve it. Would offshore mergers prove a viable strategy for China's homegrown CPA firms to expand globally, or would a pan-Chinese network with the right critical mass be the answer? What would be the value proposition of an indigenous CPA firm to Chinese enterprises, other than political considerations? What would be the challenges for a Chinese CPA brand if it were to go global? How could it integrate offshore operations so that it could effectively deliver its brand promise to its clients?
Swot Analysis of "Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms" written by Christine Chan, Josephine Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cpa Shinewing facing as an external strategic factors. Some of the topics covered in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms case study are - Strategic Management Strategies, Globalization, Government, Growth strategy, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cpa Shinewing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms can be done for the following purposes –
1. Strategic planning using facts provided in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms case study
2. Improving business portfolio management of Cpa Shinewing
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cpa Shinewing
Strengths Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cpa Shinewing in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms Harvard Business Review case study are -
High brand equity
– Cpa Shinewing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cpa Shinewing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Cpa Shinewing 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 Christine Chan, Josephine Lau 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.
Organizational Resilience of Cpa Shinewing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cpa Shinewing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Cpa Shinewing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cpa Shinewing 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.
Diverse revenue streams
– Cpa Shinewing is present in almost all the verticals within the industry. This has provided firm in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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.
Effective Research and Development (R&D)
– Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Cpa Shinewing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Cpa Shinewing 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.
Highly skilled collaborators
– Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Cpa Shinewing is one of the most innovative firm in sector. Manager in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Cpa Shinewing in the sector have low bargaining power. Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cpa Shinewing to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Cpa Shinewing 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 Cpa Shinewing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms are -
Products dominated business model
– Even though Cpa Shinewing 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 - Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Cpa Shinewing 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.
Low market penetration in new markets
– Outside its home market of Cpa Shinewing, firm in the HBR case study Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms HBR case study mentions - Cpa Shinewing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms, in the dynamic environment Cpa Shinewing has struggled to respond to the nimble upstart competition. Cpa Shinewing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Cpa Shinewing supply chain. Even after few cautionary changes mentioned in the HBR case study - Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cpa Shinewing vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Cpa Shinewing is dominated by functional specialists. It is not different from other players in the Global Business segment. Cpa Shinewing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cpa Shinewing to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms, it seems that the employees of Cpa Shinewing 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.
Skills based hiring
– The stress on hiring functional specialists at Cpa Shinewing 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Cpa Shinewing has relatively successful track record of launching new products.
Opportunities Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms | 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cpa Shinewing 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. Cpa Shinewing 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.
Using analytics as competitive advantage
– Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cpa Shinewing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Cpa Shinewing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cpa Shinewing is facing challenges because of the dominance of functional experts in the organization. Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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.
Creating value in data economy
– The success of analytics program of Cpa Shinewing has opened avenues for new revenue streams for the organization in the industry. This can help Cpa Shinewing to build a more holistic ecosystem as suggested in the Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms case study. Cpa Shinewing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cpa Shinewing 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.
Better consumer reach
– The expansion of the 5G network will help Cpa Shinewing to increase its market reach. Cpa Shinewing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cpa Shinewing 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, Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Cpa Shinewing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Cpa Shinewing can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Building a culture of innovation
– managers at Cpa Shinewing 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 Global Business segment.
Buying journey improvements
– Cpa Shinewing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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.
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 Cpa Shinewing 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.
Threats Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms are -
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cpa Shinewing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Cpa Shinewing needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Cpa Shinewing business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Cpa Shinewing 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. Cpa Shinewing can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Cpa Shinewing has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Cpa Shinewing needs to keep up with the evolution of technology in the Global Business 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.
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. Cpa Shinewing 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.
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.
Consumer confidence and its impact on Cpa Shinewing 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.
Increasing wage structure of Cpa Shinewing
– 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 Cpa Shinewing.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms, Cpa Shinewing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cpa Shinewing 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
– Cpa Shinewing 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.
Weighted SWOT Analysis of Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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 Cpa Shinewing needs to make to build a sustainable competitive advantage.