California's Budget Crises, Tax Reform, and Domestic and International Tax Competition SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of California's Budget Crises, Tax Reform, and Domestic and International Tax Competition
How do (and how should) governments design fiscal policies to compete in a globalized economy while meeting internal policy priorities including redistribution? In 2009, Governor Arnold Schwarzenegger repeatedly declared fiscal emergencies as California's state budget deficit reached all-time highs. The Governor and legislative leaders established the Commission on the Twenty-first Century Economy to recommend tax reforms that would improve the state's fiscal health and competitiveness. But when the Commission issued its recommendations, many of which were consistent with domestic and international trends in taxation, legislative leaders were highly critical and the prospects for reform dimmed. The case describes the political and economic contributors to California's persistent fiscal deficits and the reforms recommended by the Commission. It summarizes recent trends in taxation by U.S. states and OECD nations, relating the empirical trends to tax theory. Finally, it engages the issue of inter-jurisdictional tax competition from both positive and normative perspectives. Instructors may also obtain a Teaching Note, written by this case's author, that provides suggestions for using this case effectively in the classroom.
Swot Analysis of "California's Budget Crises, Tax Reform, and Domestic and International Tax Competition" written by Matthew C. Weinzierl, Jacob Kuipers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax California's facing as an external strategic factors. Some of the topics covered in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition case study are - Strategic Management Strategies, Competition, Economy, Global strategy, Globalization, Policy, Regulation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the California's Budget Crises, Tax Reform, and Domestic and International Tax Competition casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing household debt because of falling income levels, technology disruption, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
supply chains are disrupted by pandemic , there is backlash against globalization, etc
Introduction to SWOT Analysis of California's Budget Crises, Tax Reform, and Domestic and International Tax Competition
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax California's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax California's 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition can be done for the following purposes –
1. Strategic planning using facts provided in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition case study
2. Improving business portfolio management of Tax California's
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 Tax California's
Strengths California's Budget Crises, Tax Reform, and Domestic and International Tax Competition | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax California's in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition Harvard Business Review case study are -
Highly skilled collaborators
– Tax California's 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 Tax California's 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
– Tax California's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 Tax California's in the sector have low bargaining power. California's Budget Crises, Tax Reform, and Domestic and International Tax Competition has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tax California's to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Tax California's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Tax California's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Tax California's is present in almost all the verticals within the industry. This has provided firm in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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.
High switching costs
– The high switching costs that Tax California's 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.
Ability to lead change in Finance & Accounting field
– Tax California's 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 Tax California's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Tax California's 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 Tax California's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in California's Budget Crises, Tax Reform, and Domestic and International Tax Competition Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Tax California's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tax California's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses California's Budget Crises, Tax Reform, and Domestic and International Tax Competition | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of California's Budget Crises, Tax Reform, and Domestic and International Tax Competition are -
High operating costs
– Compare to the competitors, firm in the HBR case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 Tax California's 's lucrative customers.
Products dominated business model
– Even though Tax California's 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 - California's Budget Crises, Tax Reform, and Domestic and International Tax Competition should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition, is just above the industry average. Tax California's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tax California's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition, in the dynamic environment Tax California's has struggled to respond to the nimble upstart competition. Tax California's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition can leverage the sales team experience to cultivate customer relationships as Tax California's 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 Tax California's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition, it seems that the employees of Tax California's 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.
Skills based hiring
– The stress on hiring functional specialists at Tax California's 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 Tax California's is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Tax California's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tax California's to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Tax California's 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.
Opportunities California's Budget Crises, Tax Reform, and Domestic and International Tax Competition | 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tax California's 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. Tax California's 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
– Tax California's 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.
Buying journey improvements
– Tax California's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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.
Learning at scale
– Online learning technologies has now opened space for Tax California's 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.
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 Tax California's 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.
Building a culture of innovation
– managers at Tax California's 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 Finance & Accounting segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tax California's 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 Tax California's to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tax California's 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.
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 Tax California's in the consumer business. Now Tax California's can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Tax California's has opened avenues for new revenue streams for the organization in the industry. This can help Tax California's to build a more holistic ecosystem as suggested in the California's Budget Crises, Tax Reform, and Domestic and International Tax Competition case study. Tax California's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tax California's is facing challenges because of the dominance of functional experts in the organization. California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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.
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. Tax California's 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Tax California's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats California's Budget Crises, Tax Reform, and Domestic and International Tax Competition External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study California's Budget Crises, Tax Reform, and Domestic and International Tax Competition are -
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. Tax California's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Tax California's 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.
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 Tax California's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Tax California's
– 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 Tax California's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tax California's 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition .
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. Tax California's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that Tax California's is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tax California's 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.
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 Tax California's in the Finance & Accounting sector and impact the bottomline of the organization.
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 Tax California's.
Regulatory challenges
– Tax California's 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 Finance & Accounting industry regulations.
Weighted SWOT Analysis of California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 California's Budget Crises, Tax Reform, and Domestic and International Tax Competition 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 Tax California's needs to make to build a sustainable competitive advantage.
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