Case Study Description of Communicating Strategy to Financial Analysts
Sell-side financial analysts are important to a firm because they affect both investor behavior and the firm's reputation in the business community. The effective implementation of strategy requires that the firm effectively communicate with these analysts regarding its strategy. Here, the focus is on the relationship that exists between companies and analysts, as well as its implications, from a communication strategy standpoint, for companies' investor relations activities.
Swot Analysis of "Communicating Strategy to Financial Analysts" written by Jerome C. Kuperman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Analysts Investor facing as an external strategic factors. Some of the topics covered in Communicating Strategy to Financial Analysts case study are - Strategic Management Strategies, Competitive strategy, Financial analysis, Financial management and Communication.
Some of the macro environment factors that can be used to understand the Communicating Strategy to Financial Analysts casestudy better are - – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing transportation and logistics costs, increasing commodity prices, geopolitical disruptions,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Communicating Strategy to Financial Analysts
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Communicating Strategy to Financial Analysts case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Analysts Investor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Analysts Investor 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 Communicating Strategy to Financial Analysts can be done for the following purposes –
1. Strategic planning using facts provided in Communicating Strategy to Financial Analysts case study
2. Improving business portfolio management of Analysts Investor
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Analysts Investor
Strengths Communicating Strategy to Financial Analysts | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Analysts Investor in Communicating Strategy to Financial Analysts Harvard Business Review case study are -
Successful track record of launching new products
– Analysts Investor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Analysts Investor 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.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Analysts Investor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Analysts Investor 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.
Training and development
– Analysts Investor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Communicating Strategy to Financial Analysts 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.
Operational resilience
– The operational resilience strategy in the Communicating Strategy to Financial Analysts 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.
Effective Research and Development (R&D)
– Analysts Investor 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 Communicating Strategy to Financial Analysts - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Analysts Investor is one of the leading recruiters in the industry. Managers in the Communicating Strategy to Financial Analysts are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Analysts Investor is present in almost all the verticals within the industry. This has provided firm in Communicating Strategy to Financial Analysts 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 Analysts Investor 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.
Innovation driven organization
– Analysts Investor is one of the most innovative firm in sector. Manager in Communicating Strategy to Financial Analysts Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Communication industry
– Communicating Strategy to Financial Analysts firm has clearly differentiated products in the market place. This has enabled Analysts Investor to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Analysts Investor to invest into research and development (R&D) and innovation.
Strong track record of project management
– Analysts Investor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Analysts Investor in the sector have low bargaining power. Communicating Strategy to Financial Analysts has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Analysts Investor to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Communicating Strategy to Financial Analysts | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Communicating Strategy to Financial Analysts are -
Capital Spending Reduction
– Even during the low interest decade, Analysts Investor 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 operating costs
– Compare to the competitors, firm in the HBR case study Communicating Strategy to Financial Analysts 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 Analysts Investor 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Jerome C. Kuperman suggests that, Analysts Investor 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.
Increasing silos among functional specialists
– The organizational structure of Analysts Investor is dominated by functional specialists. It is not different from other players in the Communication segment. Analysts Investor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Analysts Investor to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Communicating Strategy to Financial Analysts, is just above the industry average. Analysts Investor 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.
Low market penetration in new markets
– Outside its home market of Analysts Investor, firm in the HBR case study Communicating Strategy to Financial Analysts needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Communicating Strategy to Financial Analysts 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 Analysts Investor has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Communicating Strategy to Financial Analysts, in the dynamic environment Analysts Investor has struggled to respond to the nimble upstart competition. Analysts Investor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Analysts Investor 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.
Need for greater diversity
– Analysts Investor 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.
Lack of clear differentiation of Analysts Investor products
– To increase the profitability and margins on the products, Analysts Investor needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Communicating Strategy to Financial Analysts | 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 Communicating Strategy to Financial Analysts 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, Analysts Investor can use these opportunities to build new business models that can help the communities that Analysts Investor operates in. Secondly it can use opportunities from government spending in Communication sector.
Using analytics as competitive advantage
– Analysts Investor 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 Communicating Strategy to Financial Analysts - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Analysts Investor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Analysts Investor 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. Analysts Investor 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.
Building a culture of innovation
– managers at Analysts Investor 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 Communication segment.
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 Analysts Investor 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.
Developing new processes and practices
– Analysts Investor can develop new processes and procedures in Communication 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Analysts Investor 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 Analysts Investor to hire the very best people irrespective of their geographical location.
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. Analysts Investor can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Analysts Investor to increase its market reach. Analysts Investor 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Analysts Investor 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.
Leveraging digital technologies
– Analysts Investor 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 Analysts Investor has opened avenues for new revenue streams for the organization in the industry. This can help Analysts Investor to build a more holistic ecosystem as suggested in the Communicating Strategy to Financial Analysts case study. Analysts Investor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Analysts Investor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Communicating Strategy to Financial Analysts External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Communicating Strategy to Financial Analysts are -
Increasing wage structure of Analysts Investor
– 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 Analysts Investor.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Communicating Strategy to Financial Analysts, Analysts Investor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Shortening product life cycle
– it is one of the major threat that Analysts Investor is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Analysts Investor.
Technology acceleration in Forth Industrial Revolution
– Analysts Investor has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Analysts Investor needs to keep up with the evolution of technology in the Communication sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Analysts Investor 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 Communicating Strategy to Financial Analysts .
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 Analysts Investor 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 Analysts Investor in the Communication industry. The Communication 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.
High dependence on third party suppliers
– Analysts Investor 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Analysts Investor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Analysts Investor in the Communication sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Analysts Investor 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. Analysts Investor can take advantage of this fund but it will also bring new competitors in the Communication industry.
Weighted SWOT Analysis of Communicating Strategy to Financial Analysts 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 Communicating Strategy to Financial Analysts 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 Communicating Strategy to Financial Analysts 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 Communicating Strategy to Financial Analysts 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 Communicating Strategy to Financial Analysts 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 Analysts Investor needs to make to build a sustainable competitive advantage.