The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation
This technical note offers an example of a thoroughly complete "pitch book" for use as a basis of class discussion and learning. Actual pitch books are almost never made available for public use. This presentation, however, was prepared by a group of Darden students in April 2001 for a jury of M&A executives of United Technologies Corporation-they judged this work to be of excellent quality, among the best they had seen in any setting. A separate validation of the deal concept is given in the final exhibit, which records the ammouncement on July 30, 2001, by General Electric of its acquisition of Heller. In reviewing this document, the task for the student is to assess both its form and contents, from the standpoints of both the presenter and audience. Why is each exhibit and section included in the document? What analytical work underpins the exhibits? What might explain the presentation format? What oral comments might one make in supporting this presentation to a group of executives?
Swot Analysis of "The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation" written by Robert F. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Heller Pitch facing as an external strategic factors. Some of the topics covered in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation casestudy better are - – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heller Pitch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heller Pitch 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation can be done for the following purposes –
1. Strategic planning using facts provided in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation case study
2. Improving business portfolio management of Heller Pitch
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 Heller Pitch
Strengths The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heller Pitch in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation Harvard Business Review case study are -
Training and development
– Heller Pitch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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.
Diverse revenue streams
– Heller Pitch is present in almost all the verticals within the industry. This has provided firm in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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.
Ability to recruit top talent
– Heller Pitch is one of the leading recruiters in the industry. Managers in the The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Heller Pitch 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 Heller Pitch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Heller Pitch 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 Robert F. Bruner 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 brand equity
– Heller Pitch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Heller Pitch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Heller Pitch 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Heller Pitch 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.
Successful track record of launching new products
– Heller Pitch has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Heller Pitch 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.
Cross disciplinary teams
– Horizontal connected teams at the Heller Pitch 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.
Superior customer experience
– The customer experience strategy of Heller Pitch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Heller Pitch
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Heller Pitch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation are -
Lack of clear differentiation of Heller Pitch products
– To increase the profitability and margins on the products, Heller Pitch needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Heller Pitch, firm in the HBR case study The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 Heller Pitch 's lucrative customers.
Need for greater diversity
– Heller Pitch 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, Heller Pitch 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, Heller Pitch 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert F. Bruner suggests that, Heller Pitch 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 Heller Pitch has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation, it seems that the employees of Heller Pitch 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.
Aligning sales with marketing
– It come across in the case study The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation can leverage the sales team experience to cultivate customer relationships as Heller Pitch is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Heller Pitch is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Heller Pitch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Heller Pitch to focus more on services rather than just following the product oriented approach.
Opportunities The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation | 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation are -
Manufacturing automation
– Heller Pitch can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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
– Heller Pitch can develop new processes and procedures in Finance & Accounting 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.
Building a culture of innovation
– managers at Heller Pitch 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.
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. Heller Pitch can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Heller Pitch has opened avenues for new revenue streams for the organization in the industry. This can help Heller Pitch to build a more holistic ecosystem as suggested in the The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation case study. Heller Pitch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Heller Pitch 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Heller Pitch 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.
Learning at scale
– Online learning technologies has now opened space for Heller Pitch 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.
Buying journey improvements
– Heller Pitch can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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.
Better consumer reach
– The expansion of the 5G network will help Heller Pitch to increase its market reach. Heller Pitch 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.
Loyalty marketing
– Heller Pitch 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.
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. Heller Pitch 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. Heller Pitch 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.
Leveraging digital technologies
– Heller Pitch 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.
Threats The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Heller Pitch 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.
Stagnating economy with rate increase
– Heller Pitch 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.
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. Heller Pitch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Heller Pitch needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Heller Pitch
– 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 Heller Pitch.
High dependence on third party suppliers
– Heller Pitch 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.
Environmental challenges
– Heller Pitch 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. Heller Pitch can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Heller Pitch 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.
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 Heller Pitch 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, Heller Pitch 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation .
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 Heller Pitch.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Heller Pitch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 The M&A "Pitch Book": Proposed Acquisition of Heller Financial by United Technologies Corporation 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 Heller Pitch needs to make to build a sustainable competitive advantage.
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