Case Study Description of StratAFin Inc.: Auditing Change
This case focuses on organizational transformation in an accounting firm in South Africa. The case describes how the impact of both globalization and the transformation that the country had undergone since the advent of democracy in 1994 steered StratAFin Inc. towards a process of building a new identity. The case describes how senior management realized the need for transformation based on the many new challenges that were being faced in the changing environment. Change was experienced at many levels within the organization: from the construction of a new building as a symbol of the change to corporatizing and growing the firm, changing the management structure, investing heavily in technology and human capital development, focusing on continuous improvement and driving major diversity transformation. The case offers insights into the many change drivers that had to be considered in the process, how the organization had to manage any resistance to change and the resultant need for flexibility during the process, and the importance of measurement of the many dimensions within a transformation process. The case concludes with the challenge of how the firm's leadership could ensure that the continuing transformation maintained its momentum.
Authors :: Verity Hawarden, Margaret Sutherland, Mandla Adonisi
Swot Analysis of "StratAFin Inc.: Auditing Change" written by Verity Hawarden, Margaret Sutherland, Mandla Adonisi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Transformation Stratafin facing as an external strategic factors. Some of the topics covered in StratAFin Inc.: Auditing Change case study are - Strategic Management Strategies, Emerging markets, Leadership, Organizational culture, Organizational structure, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the StratAFin Inc.: Auditing Change casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, wage bills are increasing,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of StratAFin Inc.: Auditing Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in StratAFin Inc.: Auditing Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Transformation Stratafin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Transformation Stratafin 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 StratAFin Inc.: Auditing Change can be done for the following purposes –
1. Strategic planning using facts provided in StratAFin Inc.: Auditing Change case study
2. Improving business portfolio management of Transformation Stratafin
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Transformation Stratafin
Strengths StratAFin Inc.: Auditing Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Transformation Stratafin in StratAFin Inc.: Auditing Change Harvard Business Review case study are -
Highly skilled collaborators
– Transformation Stratafin 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 StratAFin Inc.: Auditing Change HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Transformation Stratafin is one of the leading recruiters in the industry. Managers in the StratAFin Inc.: Auditing Change are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the StratAFin Inc.: Auditing Change 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.
Cross disciplinary teams
– Horizontal connected teams at the Transformation Stratafin 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.
Analytics focus
– Transformation Stratafin 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 Verity Hawarden, Margaret Sutherland, Mandla Adonisi 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.
Ability to lead change in Leadership & Managing People field
– Transformation Stratafin 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 Transformation Stratafin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Transformation Stratafin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Transformation Stratafin 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.
Strong track record of project management
– Transformation Stratafin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Transformation Stratafin is present in almost all the verticals within the industry. This has provided firm in StratAFin Inc.: Auditing Change 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.
Training and development
– Transformation Stratafin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in StratAFin Inc.: Auditing Change 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.
Superior customer experience
– The customer experience strategy of Transformation Stratafin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Transformation Stratafin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Transformation Stratafin 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.
Weaknesses StratAFin Inc.: Auditing Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of StratAFin Inc.: Auditing Change are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study StratAFin Inc.: Auditing Change, is just above the industry average. Transformation Stratafin 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.
Skills based hiring
– The stress on hiring functional specialists at Transformation Stratafin 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.
Increasing silos among functional specialists
– The organizational structure of Transformation Stratafin is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Transformation Stratafin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Transformation Stratafin to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Transformation Stratafin 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.
No frontier risks strategy
– After analyzing the HBR case study StratAFin Inc.: Auditing Change, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study StratAFin Inc.: Auditing Change, in the dynamic environment Transformation Stratafin has struggled to respond to the nimble upstart competition. Transformation Stratafin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Transformation Stratafin products
– To increase the profitability and margins on the products, Transformation Stratafin needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Transformation Stratafin 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. Transformation Stratafin 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Transformation Stratafin 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.
Products dominated business model
– Even though Transformation Stratafin 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 - StratAFin Inc.: Auditing Change should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Transformation Stratafin 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.
Opportunities StratAFin Inc.: Auditing Change | 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 StratAFin Inc.: Auditing Change are -
Buying journey improvements
– Transformation Stratafin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. StratAFin Inc.: Auditing Change 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Transformation Stratafin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Transformation Stratafin 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.
Loyalty marketing
– Transformation Stratafin 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.
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 Transformation Stratafin 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Transformation Stratafin is facing challenges because of the dominance of functional experts in the organization. StratAFin Inc.: Auditing Change 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.
Manufacturing automation
– Transformation Stratafin can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Transformation Stratafin 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, StratAFin Inc.: Auditing Change, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Transformation Stratafin 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 Transformation Stratafin to hire the very best people irrespective of their geographical location.
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 Transformation Stratafin in the consumer business. Now Transformation Stratafin can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Transformation Stratafin 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 StratAFin Inc.: Auditing Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Transformation Stratafin 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 Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Transformation Stratafin 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. Transformation Stratafin 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Transformation Stratafin can use these opportunities to build new business models that can help the communities that Transformation Stratafin operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats StratAFin Inc.: Auditing Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study StratAFin Inc.: Auditing Change are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Transformation Stratafin in the Leadership & Managing People industry. The Leadership & Managing People 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.
Environmental challenges
– Transformation Stratafin 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. Transformation Stratafin can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Transformation Stratafin 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.
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 Transformation Stratafin in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Transformation Stratafin needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study StratAFin Inc.: Auditing Change, Transformation Stratafin may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Technology acceleration in Forth Industrial Revolution
– Transformation Stratafin has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Transformation Stratafin needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
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. Transformation Stratafin needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Transformation Stratafin 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.
Shortening product life cycle
– it is one of the major threat that Transformation Stratafin is facing in Leadership & Managing People 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 Transformation Stratafin.
Weighted SWOT Analysis of StratAFin Inc.: Auditing Change 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 StratAFin Inc.: Auditing Change 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 StratAFin Inc.: Auditing Change 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 StratAFin Inc.: Auditing Change 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 StratAFin Inc.: Auditing Change 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 Transformation Stratafin needs to make to build a sustainable competitive advantage.