Crisis at the Mill: Cash Flow Forecasting Exercise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Crisis at the Mill: Cash Flow Forecasting Exercise
Emerging markets are challenging and require special expertise. India in particular is known to be a tricky business environment. The case follows two senior executives from Alvarez & Marsal's India practice as they deal with an urgent request from one of their US private equity clients, Sapphire Capital. A former employee is claiming that irregular activities by senior management are at the root of the company's financial difficulties. The turnaround team needs to act quickly yet must tread carefully in case the accusations prove unfounded. The second part of the case describes how the A&M team deals with the situation and the action they take to restore and restructure the ailing Indian company.
Authors :: Sankar Krishnan, Claudia Zeisberger, Anne-Marie Carrick, Nikhil Shah
Swot Analysis of "Crisis at the Mill: Cash Flow Forecasting Exercise" written by Sankar Krishnan, Claudia Zeisberger, Anne-Marie Carrick, Nikhil Shah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Marsal's Alvarez facing as an external strategic factors. Some of the topics covered in Crisis at the Mill: Cash Flow Forecasting Exercise case study are - Strategic Management Strategies, Corporate governance, Crisis management, Emerging markets, Ethics and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Crisis at the Mill: Cash Flow Forecasting Exercise casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Crisis at the Mill: Cash Flow Forecasting Exercise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crisis at the Mill: Cash Flow Forecasting Exercise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Marsal's Alvarez, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Marsal's Alvarez 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 Crisis at the Mill: Cash Flow Forecasting Exercise can be done for the following purposes –
1. Strategic planning using facts provided in Crisis at the Mill: Cash Flow Forecasting Exercise case study
2. Improving business portfolio management of Marsal's Alvarez
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 Marsal's Alvarez
Strengths Crisis at the Mill: Cash Flow Forecasting Exercise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Marsal's Alvarez in Crisis at the Mill: Cash Flow Forecasting Exercise Harvard Business Review case study are -
High switching costs
– The high switching costs that Marsal's Alvarez 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.
Effective Research and Development (R&D)
– Marsal's Alvarez 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 Crisis at the Mill: Cash Flow Forecasting Exercise - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Marsal's Alvarez digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Marsal's Alvarez 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.
Superior customer experience
– The customer experience strategy of Marsal's Alvarez in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Marsal's Alvarez is present in almost all the verticals within the industry. This has provided firm in Crisis at the Mill: Cash Flow Forecasting Exercise 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
- Marsal's Alvarez 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 Marsal's Alvarez is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crisis at the Mill: Cash Flow Forecasting Exercise Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Crisis at the Mill: Cash Flow Forecasting Exercise Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Innovation & Entrepreneurship field
– Marsal's Alvarez 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 Marsal's Alvarez in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Marsal's Alvarez has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Marsal's Alvarez 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.
Ability to recruit top talent
– Marsal's Alvarez is one of the leading recruiters in the industry. Managers in the Crisis at the Mill: Cash Flow Forecasting Exercise are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Marsal's Alvarez is one of the most innovative firm in sector. Manager in Crisis at the Mill: Cash Flow Forecasting Exercise Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Marsal's Alvarez is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Crisis at the Mill: Cash Flow Forecasting Exercise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crisis at the Mill: Cash Flow Forecasting Exercise are -
Aligning sales with marketing
– It come across in the case study Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise can leverage the sales team experience to cultivate customer relationships as Marsal's Alvarez is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Marsal's Alvarez 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. Marsal's Alvarez 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.
Increasing silos among functional specialists
– The organizational structure of Marsal's Alvarez is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Marsal's Alvarez needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Marsal's Alvarez to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Marsal's Alvarez products
– To increase the profitability and margins on the products, Marsal's Alvarez needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Crisis at the Mill: Cash Flow Forecasting Exercise, is just above the industry average. Marsal's Alvarez needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Marsal's Alvarez 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 - Crisis at the Mill: Cash Flow Forecasting Exercise should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Marsal's Alvarez 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 Crisis at the Mill: Cash Flow Forecasting Exercise, it seems that the employees of Marsal's Alvarez don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Crisis at the Mill: Cash Flow Forecasting Exercise 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 Marsal's Alvarez has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Marsal's Alvarez 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 bargaining power of channel partners
– Because of the regulatory requirements, Sankar Krishnan, Claudia Zeisberger, Anne-Marie Carrick, Nikhil Shah suggests that, Marsal's Alvarez 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.
Opportunities Crisis at the Mill: Cash Flow Forecasting Exercise | 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 Crisis at the Mill: Cash Flow Forecasting Exercise are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Marsal's Alvarez 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 Marsal's Alvarez to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Marsal's Alvarez 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.
Developing new processes and practices
– Marsal's Alvarez can develop new processes and procedures in Innovation & Entrepreneurship 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Marsal's Alvarez 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, Crisis at the Mill: Cash Flow Forecasting Exercise, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Marsal's Alvarez can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Marsal's Alvarez has opened avenues for new revenue streams for the organization in the industry. This can help Marsal's Alvarez to build a more holistic ecosystem as suggested in the Crisis at the Mill: Cash Flow Forecasting Exercise case study. Marsal's Alvarez can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Marsal's Alvarez to increase its market reach. Marsal's Alvarez will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Marsal's Alvarez can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Marsal's Alvarez can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Marsal's Alvarez 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.
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. Marsal's Alvarez 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
– Marsal's Alvarez 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Marsal's Alvarez is facing challenges because of the dominance of functional experts in the organization. Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crisis at the Mill: Cash Flow Forecasting Exercise are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Marsal's Alvarez 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Marsal's Alvarez can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Marsal's Alvarez has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Marsal's Alvarez 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crisis at the Mill: Cash Flow Forecasting Exercise, Marsal's Alvarez 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 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. Marsal's Alvarez needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Marsal's Alvarez 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.
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.
Increasing wage structure of Marsal's Alvarez
– 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 Marsal's Alvarez.
Shortening product life cycle
– it is one of the major threat that Marsal's Alvarez is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Marsal's Alvarez 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.
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 Marsal's Alvarez in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Marsal's Alvarez business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Marsal's Alvarez 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.
Weighted SWOT Analysis of Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise 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 Crisis at the Mill: Cash Flow Forecasting Exercise 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 Marsal's Alvarez needs to make to build a sustainable competitive advantage.
