Financial Engineering and Tax Risk: The Case of Times Mirror PEPS SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Financial Engineering and Tax Risk: The Case of Times Mirror PEPS
Provides general background on the taxation of corporate securities, and shows how the inconsistent taxation of functionally-similar securities can permit financial engineers to bear tax risk to earn positive returns. Designed to be used with Times Mirror Co. PEPS Proposal Review, so that students can understand and calculate the tax-driven sources of value from Times Mirror's use of a PEPS to monetize its holdings in Netscape.
Authors :: Peter Tufano, Cameron Poetzscher, Robert Santangelo
Swot Analysis of "Financial Engineering and Tax Risk: The Case of Times Mirror PEPS" written by Peter Tufano, Cameron Poetzscher, Robert Santangelo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Peps Mirror facing as an external strategic factors. Some of the topics covered in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS case study are - Strategic Management Strategies, Policy, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Financial Engineering and Tax Risk: The Case of Times Mirror PEPS casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Financial Engineering and Tax Risk: The Case of Times Mirror PEPS
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Peps Mirror, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS can be done for the following purposes –
1. Strategic planning using facts provided in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS case study
2. Improving business portfolio management of Peps Mirror
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 Peps Mirror
Strengths Financial Engineering and Tax Risk: The Case of Times Mirror PEPS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Peps Mirror in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS Harvard Business Review case study are -
Analytics focus
– Peps Mirror 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 Peter Tufano, Cameron Poetzscher, Robert Santangelo 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 switching costs
– The high switching costs that Peps Mirror 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 Peps Mirror in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Peps Mirror is one of the leading recruiters in the industry. Managers in the Financial Engineering and Tax Risk: The Case of Times Mirror PEPS are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Peps Mirror digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Peps Mirror 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 Peps Mirror in the sector have low bargaining power. Financial Engineering and Tax Risk: The Case of Times Mirror PEPS has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Peps Mirror to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Peps Mirror
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Peps Mirror does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Peps Mirror 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 Peps Mirror is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Peps Mirror has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Peps Mirror 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
– Peps Mirror is present in almost all the verticals within the industry. This has provided firm in Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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.
Cross disciplinary teams
– Horizontal connected teams at the Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Financial Engineering and Tax Risk: The Case of Times Mirror PEPS are -
Aligning sales with marketing
– It come across in the case study Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS can leverage the sales team experience to cultivate customer relationships as Peps Mirror is planning to shift buying processes online.
Need for greater diversity
– Peps Mirror 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.
Slow to strategic competitive environment developments
– As Financial Engineering and Tax Risk: The Case of Times Mirror PEPS HBR case study mentions - Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS, in the dynamic environment Peps Mirror has struggled to respond to the nimble upstart competition. Peps Mirror has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Peps Mirror 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 bargaining power of channel partners
– Because of the regulatory requirements, Peter Tufano, Cameron Poetzscher, Robert Santangelo suggests that, Peps Mirror 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.
Low market penetration in new markets
– Outside its home market of Peps Mirror, firm in the HBR case study Financial Engineering and Tax Risk: The Case of Times Mirror PEPS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Financial Engineering and Tax Risk: The Case of Times Mirror PEPS has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Peps Mirror 's lucrative customers.
Interest costs
– Compare to the competition, Peps Mirror 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.
High cash cycle compare to competitors
Peps Mirror 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.
Lack of clear differentiation of Peps Mirror products
– To increase the profitability and margins on the products, Peps Mirror needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Financial Engineering and Tax Risk: The Case of Times Mirror PEPS | 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS are -
Using analytics as competitive advantage
– Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Peps Mirror to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Peps Mirror is facing challenges because of the dominance of functional experts in the organization. Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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.
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 Peps Mirror in the consumer business. Now Peps Mirror can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Peps Mirror 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Peps Mirror can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Peps Mirror 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.
Buying journey improvements
– Peps Mirror can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Peps Mirror 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Peps Mirror can use these opportunities to build new business models that can help the communities that Peps Mirror operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Peps Mirror 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.
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. Peps Mirror 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. Peps Mirror 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Peps Mirror 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.
Loyalty marketing
– Peps Mirror 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.
Threats Financial Engineering and Tax Risk: The Case of Times Mirror PEPS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Financial Engineering and Tax Risk: The Case of Times Mirror PEPS are -
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. Peps Mirror 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 Peps Mirror is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Peps Mirror has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Peps Mirror 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.
Stagnating economy with rate increase
– Peps Mirror 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.
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 Peps Mirror.
Consumer confidence and its impact on Peps Mirror 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.
Environmental challenges
– Peps Mirror 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. Peps Mirror can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Peps Mirror needs to understand the core reasons impacting the Finance & Accounting 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 Peps Mirror business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Peps Mirror with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Peps Mirror in the Finance & Accounting industry. The Finance & Accounting 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.
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 Peps Mirror in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Peps Mirror 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS .
Weighted SWOT Analysis of Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Financial Engineering and Tax Risk: The Case of Times Mirror PEPS 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 Peps Mirror needs to make to build a sustainable competitive advantage.
