Nestle and Alcon--the Value of a Listing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nestle and Alcon--the Value of a Listing
In response to a perceived undervaluation by the capital markets, Nestle is considering divesting a part of its ophthalmology subsidiary, Alcon, and must decide on a listing location. In the process, students are challenged to wrestle with the valuation of a conglomerate, the tradeoffs involved in listing in the United States versus Europe, and the incentive and tax consequences of that listing decision.
Authors :: Mihir A. Desai, Vincent Dessain, Anders Sjoman
Swot Analysis of "Nestle and Alcon--the Value of a Listing" written by Mihir A. Desai, Vincent Dessain, Anders Sjoman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Listing Alcon facing as an external strategic factors. Some of the topics covered in Nestle and Alcon--the Value of a Listing case study are - Strategic Management Strategies, Costs, Financial analysis, Financial markets, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Nestle and Alcon--the Value of a Listing casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Nestle and Alcon--the Value of a Listing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nestle and Alcon--the Value of a Listing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Listing Alcon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Listing Alcon 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 Nestle and Alcon--the Value of a Listing can be done for the following purposes –
1. Strategic planning using facts provided in Nestle and Alcon--the Value of a Listing case study
2. Improving business portfolio management of Listing Alcon
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 Listing Alcon
Strengths Nestle and Alcon--the Value of a Listing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Listing Alcon in Nestle and Alcon--the Value of a Listing Harvard Business Review case study are -
Ability to recruit top talent
– Listing Alcon is one of the leading recruiters in the industry. Managers in the Nestle and Alcon--the Value of a Listing 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 Finance & Accounting industry
– Nestle and Alcon--the Value of a Listing firm has clearly differentiated products in the market place. This has enabled Listing Alcon to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Listing Alcon to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Listing Alcon 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 Listing Alcon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Nestle and Alcon--the Value of a Listing 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.
Low bargaining power of suppliers
– Suppliers of Listing Alcon in the sector have low bargaining power. Nestle and Alcon--the Value of a Listing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Listing Alcon to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Listing Alcon 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 Nestle and Alcon--the Value of a Listing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Listing Alcon 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.
Training and development
– Listing Alcon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nestle and Alcon--the Value of a Listing 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 Listing Alcon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Listing Alcon 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 Mihir A. Desai, Vincent Dessain, Anders Sjoman 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
– Listing Alcon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Listing Alcon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Listing Alcon 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 Nestle and Alcon--the Value of a Listing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Nestle and Alcon--the Value of a Listing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nestle and Alcon--the Value of a Listing are -
Skills based hiring
– The stress on hiring functional specialists at Listing Alcon 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Listing Alcon 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.
Slow to strategic competitive environment developments
– As Nestle and Alcon--the Value of a Listing HBR case study mentions - Listing Alcon 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Listing Alcon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nestle and Alcon--the Value of a Listing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Nestle and Alcon--the Value of a Listing 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 Nestle and Alcon--the Value of a Listing can leverage the sales team experience to cultivate customer relationships as Listing Alcon is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Listing Alcon 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. Listing Alcon even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Listing Alcon is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Listing Alcon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Listing Alcon to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nestle and Alcon--the Value of a Listing 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 Listing Alcon has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nestle and Alcon--the Value of a Listing, is just above the industry average. Listing Alcon 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Nestle and Alcon--the Value of a Listing 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 Listing Alcon 's lucrative customers.
Lack of clear differentiation of Listing Alcon products
– To increase the profitability and margins on the products, Listing Alcon needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Nestle and Alcon--the Value of a Listing | 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 Nestle and Alcon--the Value of a Listing are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Listing Alcon 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, Nestle and Alcon--the Value of a Listing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Listing Alcon can use these opportunities to build new business models that can help the communities that Listing Alcon operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Listing Alcon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Listing Alcon is facing challenges because of the dominance of functional experts in the organization. Nestle and Alcon--the Value of a Listing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Listing Alcon 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.
Using analytics as competitive advantage
– Listing Alcon 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 Nestle and Alcon--the Value of a Listing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Listing Alcon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Listing Alcon 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.
Better consumer reach
– The expansion of the 5G network will help Listing Alcon to increase its market reach. Listing Alcon 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.
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 Listing Alcon in the consumer business. Now Listing Alcon can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Listing Alcon 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 Listing Alcon has opened avenues for new revenue streams for the organization in the industry. This can help Listing Alcon to build a more holistic ecosystem as suggested in the Nestle and Alcon--the Value of a Listing case study. Listing Alcon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Listing Alcon 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.
Loyalty marketing
– Listing Alcon 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.
Threats Nestle and Alcon--the Value of a Listing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nestle and Alcon--the Value of a Listing are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Listing Alcon 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.
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.
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 Listing Alcon.
Shortening product life cycle
– it is one of the major threat that Listing Alcon is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Listing Alcon 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. Listing Alcon can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Listing Alcon 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.
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.
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 Listing Alcon business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Listing Alcon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Listing Alcon 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.
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 Listing Alcon in the Finance & Accounting sector and impact the bottomline of the organization.
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. Listing Alcon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nestle and Alcon--the Value of a Listing, Listing Alcon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Weighted SWOT Analysis of Nestle and Alcon--the Value of a Listing 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 Nestle and Alcon--the Value of a Listing 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 Nestle and Alcon--the Value of a Listing 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 Nestle and Alcon--the Value of a Listing 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 Nestle and Alcon--the Value of a Listing 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 Listing Alcon needs to make to build a sustainable competitive advantage.
