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 - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
technology disruption, cloud computing is disrupting traditional business models, 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 -
Organizational Resilience of Transformation Stratafin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Transformation Stratafin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Transformation Stratafin 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 StratAFin Inc.: Auditing Change - 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
– 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– StratAFin Inc.: Auditing Change firm has clearly differentiated products in the market place. This has enabled Transformation Stratafin to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Transformation Stratafin to invest into research and development (R&D) and innovation.
Learning organization
- Transformation Stratafin 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 Transformation Stratafin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in StratAFin Inc.: Auditing Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Low bargaining power of suppliers
– Suppliers of Transformation Stratafin in the sector have low bargaining power. StratAFin Inc.: Auditing Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Transformation Stratafin to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 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.
High switching costs
– The high switching costs that Transformation Stratafin 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.
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 -
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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Transformation Stratafin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study StratAFin Inc.: Auditing Change can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Capital Spending Reduction
– Even during the low interest decade, Transformation Stratafin 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 cash cycle compare to competitors
Transformation Stratafin has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
Aligning sales with marketing
– It come across in the case study StratAFin Inc.: Auditing Change 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 StratAFin Inc.: Auditing Change can leverage the sales team experience to cultivate customer relationships as Transformation Stratafin is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the StratAFin Inc.: Auditing Change 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 Transformation Stratafin has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Verity Hawarden, Margaret Sutherland, Mandla Adonisi suggests that, Transformation Stratafin 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 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.
Slow to strategic competitive environment developments
– As StratAFin Inc.: Auditing Change HBR case study mentions - Transformation Stratafin takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 -
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.
Leveraging digital technologies
– Transformation Stratafin 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.
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.
Developing new processes and practices
– Transformation Stratafin can develop new processes and procedures in Leadership & Managing People 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, 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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Transformation Stratafin 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.
Better consumer reach
– The expansion of the 5G network will help Transformation Stratafin to increase its market reach. Transformation Stratafin 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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Transformation Stratafin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 Transformation Stratafin business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 .
Increasing wage structure of Transformation Stratafin
– 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 Transformation Stratafin.
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.
Stagnating economy with rate increase
– Transformation Stratafin 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.
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.
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.
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.
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.
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.
