Ernst and Young: The Western Bank Audit SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ernst and Young: The Western Bank Audit
The senior staff accountant was conducting an audit for a bank client. As part of the audit, the senior staff accountant needed to verify the total interest expenses and revenues reported by the bank during the 2004 fiscal year. He had gathered data on total interest revenues and expenses as reported by the bank, as well as, the prime rate as reported by the Bank of Canada. The staff accountant intends to use linear regression to examine the relationships between revenue and interest rates and between expenses and interest rates as a way of identifying outliers that may require more detailed attention as part of the audit.
Swot Analysis of "Ernst and Young: The Western Bank Audit" written by Gregory S. Zaric includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Audit Accountant facing as an external strategic factors. Some of the topics covered in Ernst and Young: The Western Bank Audit case study are - Strategic Management Strategies, Auditing, Financial analysis, IT and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ernst and Young: The Western Bank Audit casestudy better are - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Ernst and Young: The Western Bank Audit
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ernst and Young: The Western Bank Audit case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Audit Accountant, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Audit Accountant 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 Ernst and Young: The Western Bank Audit can be done for the following purposes –
1. Strategic planning using facts provided in Ernst and Young: The Western Bank Audit case study
2. Improving business portfolio management of Audit Accountant
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 Audit Accountant
Strengths Ernst and Young: The Western Bank Audit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Audit Accountant in Ernst and Young: The Western Bank Audit Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Audit Accountant in the sector have low bargaining power. Ernst and Young: The Western Bank Audit has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Audit Accountant to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Audit Accountant 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.
High brand equity
– Audit Accountant has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Audit Accountant to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Audit Accountant is present in almost all the verticals within the industry. This has provided firm in Ernst and Young: The Western Bank Audit 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.
Analytics focus
– Audit Accountant 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 Gregory S. Zaric 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.
Cross disciplinary teams
– Horizontal connected teams at the Audit Accountant 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.
Organizational Resilience of Audit Accountant
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Audit Accountant does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– Ernst and Young: The Western Bank Audit firm has clearly differentiated products in the market place. This has enabled Audit Accountant to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Audit Accountant to invest into research and development (R&D) and innovation.
Training and development
– Audit Accountant has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ernst and Young: The Western Bank Audit 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.
Ability to lead change in Leadership & Managing People field
– Audit Accountant 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 Audit Accountant in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Audit Accountant 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 Ernst and Young: The Western Bank Audit - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Audit Accountant 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 Ernst and Young: The Western Bank Audit HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Ernst and Young: The Western Bank Audit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ernst and Young: The Western Bank Audit are -
Interest costs
– Compare to the competition, Audit Accountant 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ernst and Young: The Western Bank Audit, it seems that the employees of Audit Accountant don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Audit Accountant, firm in the HBR case study Ernst and Young: The Western Bank Audit needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Audit Accountant products
– To increase the profitability and margins on the products, Audit Accountant needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Ernst and Young: The Western Bank Audit 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 Ernst and Young: The Western Bank Audit can leverage the sales team experience to cultivate customer relationships as Audit Accountant is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Ernst and Young: The Western Bank Audit HBR case study mentions - Audit Accountant 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 decision making process
– As mentioned earlier in the report, Audit Accountant 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. Audit Accountant 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.
Products dominated business model
– Even though Audit Accountant 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 - Ernst and Young: The Western Bank Audit should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Audit Accountant is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Audit Accountant needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Audit Accountant to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Audit Accountant 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Audit Accountant supply chain. Even after few cautionary changes mentioned in the HBR case study - Ernst and Young: The Western Bank Audit, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Audit Accountant vulnerable to further global disruptions in South East Asia.
Opportunities Ernst and Young: The Western Bank Audit | 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 Ernst and Young: The Western Bank Audit are -
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 Audit Accountant 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Audit Accountant 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 Audit Accountant to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Audit Accountant is facing challenges because of the dominance of functional experts in the organization. Ernst and Young: The Western Bank Audit 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
– Audit Accountant 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, Audit Accountant 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, Ernst and Young: The Western Bank Audit, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Audit Accountant 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. Audit Accountant 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.
Using analytics as competitive advantage
– Audit Accountant 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 Ernst and Young: The Western Bank Audit - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Audit Accountant to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Audit Accountant 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.
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 Audit Accountant in the consumer business. Now Audit Accountant can target international markets with far fewer capital restrictions requirements than the existing system.
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. Audit Accountant can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Audit Accountant can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Audit Accountant to increase its market reach. Audit Accountant 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.
Building a culture of innovation
– managers at Audit Accountant 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 Leadership & Managing People segment.
Threats Ernst and Young: The Western Bank Audit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ernst and Young: The Western Bank Audit are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Audit Accountant 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 Ernst and Young: The Western Bank Audit .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Audit Accountant with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Audit Accountant.
Environmental challenges
– Audit Accountant 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. Audit Accountant 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 Audit Accountant 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ernst and Young: The Western Bank Audit, Audit Accountant 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Audit Accountant 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.
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 Audit Accountant in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Audit Accountant has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Audit Accountant 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.
Shortening product life cycle
– it is one of the major threat that Audit Accountant is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Audit Accountant 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.
Increasing wage structure of Audit Accountant
– 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 Audit Accountant.
Weighted SWOT Analysis of Ernst and Young: The Western Bank Audit 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 Ernst and Young: The Western Bank Audit 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 Ernst and Young: The Western Bank Audit 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 Ernst and Young: The Western Bank Audit 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 Ernst and Young: The Western Bank Audit 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 Audit Accountant needs to make to build a sustainable competitive advantage.