Case Study Description of Aztek Chocolate Studio: Accounting System Software
In late 2013, the founder of Aztek Chocolate, a candy manufacturer, in Winnipeg, Manitoba, is confronted with making an accounting system selection decision. He has two traditional options - outsourcing to an accounting or bookkeeping firm versus using an internally developed spreadsheet or commercial software package - as well as a third "hybrid" option - using an accounting cloud, or Software-as-a-Service, service provider. Sales are starting to flow in, and chocolates are shipping out, but he realizes he must now attend to setting up financial control and reporting systems before he loses control of the new firm's financial performance. Should he hire an accountant, manage the finances himself with a commercial accounting software package or use an accounting cloud service provider?
Swot Analysis of "Aztek Chocolate Studio: Accounting System Software" written by Derrick Neufeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Accounting Aztek facing as an external strategic factors. Some of the topics covered in Aztek Chocolate Studio: Accounting System Software case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Aztek Chocolate Studio: Accounting System Software casestudy better are - – supply chains are disrupted by pandemic , increasing commodity prices, geopolitical disruptions, technology disruption, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Aztek Chocolate Studio: Accounting System Software
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aztek Chocolate Studio: Accounting System Software case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Accounting Aztek, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Accounting Aztek 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 Aztek Chocolate Studio: Accounting System Software can be done for the following purposes –
1. Strategic planning using facts provided in Aztek Chocolate Studio: Accounting System Software case study
2. Improving business portfolio management of Accounting Aztek
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Accounting Aztek
Strengths Aztek Chocolate Studio: Accounting System Software | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Accounting Aztek in Aztek Chocolate Studio: Accounting System Software Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Aztek Chocolate Studio: Accounting System Software firm has clearly differentiated products in the market place. This has enabled Accounting Aztek to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Accounting Aztek to invest into research and development (R&D) and innovation.
Analytics focus
– Accounting Aztek 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 Derrick Neufeld 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.
Successful track record of launching new products
– Accounting Aztek has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Accounting Aztek 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.
High switching costs
– The high switching costs that Accounting Aztek 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.
Diverse revenue streams
– Accounting Aztek is present in almost all the verticals within the industry. This has provided firm in Aztek Chocolate Studio: Accounting System Software 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.
Innovation driven organization
– Accounting Aztek is one of the most innovative firm in sector. Manager in Aztek Chocolate Studio: Accounting System Software Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Accounting Aztek has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Accounting Aztek to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Accounting Aztek digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Accounting Aztek 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.
Low bargaining power of suppliers
– Suppliers of Accounting Aztek in the sector have low bargaining power. Aztek Chocolate Studio: Accounting System Software has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Accounting Aztek to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Accounting Aztek 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.
Effective Research and Development (R&D)
– Accounting Aztek 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 Aztek Chocolate Studio: Accounting System Software - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Accounting Aztek 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 Accounting Aztek is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aztek Chocolate Studio: Accounting System Software Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Aztek Chocolate Studio: Accounting System Software | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aztek Chocolate Studio: Accounting System Software are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Aztek Chocolate Studio: Accounting System Software 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 Accounting Aztek has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Accounting Aztek 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. Accounting Aztek 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.
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 Accounting Aztek supply chain. Even after few cautionary changes mentioned in the HBR case study - Aztek Chocolate Studio: Accounting System Software, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Accounting Aztek vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aztek Chocolate Studio: Accounting System Software, in the dynamic environment Accounting Aztek has struggled to respond to the nimble upstart competition. Accounting Aztek has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Derrick Neufeld suggests that, Accounting Aztek 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.
Products dominated business model
– Even though Accounting Aztek 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 - Aztek Chocolate Studio: Accounting System Software should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Aztek Chocolate Studio: Accounting System Software 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 Aztek Chocolate Studio: Accounting System Software can leverage the sales team experience to cultivate customer relationships as Accounting Aztek is planning to shift buying processes online.
Need for greater diversity
– Accounting Aztek 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.
Interest costs
– Compare to the competition, Accounting Aztek 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.
Capital Spending Reduction
– Even during the low interest decade, Accounting Aztek 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.
Increasing silos among functional specialists
– The organizational structure of Accounting Aztek is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Accounting Aztek needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Accounting Aztek to focus more on services rather than just following the product oriented approach.
Opportunities Aztek Chocolate Studio: Accounting System Software | 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 Aztek Chocolate Studio: Accounting System Software are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Accounting Aztek can use these opportunities to build new business models that can help the communities that Accounting Aztek operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Accounting Aztek can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Accounting Aztek can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Accounting Aztek 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.
Buying journey improvements
– Accounting Aztek can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aztek Chocolate Studio: Accounting System Software 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Accounting Aztek 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. Accounting Aztek 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Accounting Aztek in the consumer business. Now Accounting Aztek can target international markets with far fewer capital restrictions requirements than the existing system.
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. Accounting Aztek can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Accounting Aztek can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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 Accounting Aztek in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Accounting Aztek 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 Innovation & Entrepreneurship segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Accounting Aztek 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, Aztek Chocolate Studio: Accounting System Software, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Accounting Aztek is facing challenges because of the dominance of functional experts in the organization. Aztek Chocolate Studio: Accounting System Software 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.
Threats Aztek Chocolate Studio: Accounting System Software External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aztek Chocolate Studio: Accounting System Software are -
Technology acceleration in Forth Industrial Revolution
– Accounting Aztek has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Accounting Aztek needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Regulatory challenges
– Accounting Aztek 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 Innovation & Entrepreneurship industry regulations.
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. Accounting Aztek 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
– Accounting Aztek 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. Accounting Aztek can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Accounting Aztek 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Accounting Aztek with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Accounting Aztek needs to understand the core reasons impacting the Innovation & Entrepreneurship 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 Accounting Aztek business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Accounting Aztek in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Increasing wage structure of Accounting Aztek
– 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 Accounting Aztek.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aztek Chocolate Studio: Accounting System Software, Accounting Aztek may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
High dependence on third party suppliers
– Accounting Aztek high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Accounting Aztek in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Aztek Chocolate Studio: Accounting System Software 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 Aztek Chocolate Studio: Accounting System Software 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 Aztek Chocolate Studio: Accounting System Software 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 Aztek Chocolate Studio: Accounting System Software 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 Aztek Chocolate Studio: Accounting System Software 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 Accounting Aztek needs to make to build a sustainable competitive advantage.
