Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – geopolitical disruptions, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
Sustainable margins compare to other players in Global Business industry
– Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms firm has clearly differentiated products in the market place. This has enabled Cpa Shinewing to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Cpa Shinewing to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Cpa Shinewing is one of the leading recruiters in the industry. Managers in the Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Superior customer experience
– The customer experience strategy of Cpa Shinewing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Cpa Shinewing 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 Cpa Shinewing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Training and development
– Cpa Shinewing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Cpa Shinewing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cpa Shinewing 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.
Cross disciplinary teams
– Horizontal connected teams at the Cpa Shinewing 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.
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 -
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.
Need for greater diversity
– Cpa Shinewing has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Cpa Shinewing 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.
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.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms can leverage the sales team experience to cultivate customer relationships as Cpa Shinewing is planning to shift buying processes online.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Christine Chan, Josephine Lau suggests that, Cpa Shinewing 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.
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.
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 -
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.
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.
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.
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.
Developing new processes and practices
– Cpa Shinewing can develop new processes and procedures in Global Business 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cpa Shinewing 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 Cpa Shinewing to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cpa Shinewing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cpa Shinewing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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 -
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.
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 Cpa Shinewing in the Global Business sector and impact the bottomline of the organization.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cpa Shinewing.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cpa Shinewing in the Global Business industry. The Global Business 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.
Stagnating economy with rate increase
– Cpa Shinewing 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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cpa Shinewing 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 Against the Big Four: Growth Strategies for Indigenous Chinese CPA Firms .
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.
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.
