The IASB at a Crossroads: The Future of International Financial Reporting Standards B SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The IASB at a Crossroads: The Future of International Financial Reporting Standards B

Supplement for case 111084. In late 2012, IASB chair Hans Hoogervorst, just over a year into his term, must address several serious geopolitical challenges that can derail IFRS growth. The SEC has issued a report outlining why the U.S. should not adopt IFRS. Other major economies such as Japan and India begin to dither on IFRS as well. The E--the IASB's main backers--is embroiled in a debt crisis that divides it; Britain--the strongest voice for IFRS in the EU--lirts with an EU exit. And China remains silent. Adding to these issues are longstanding concerns about the IASB's legal status and its finances. How can Hoogervorst return momentum to IFRS?

Authors :: Karthik Ramanna, Karol Misztal, Daniela Beyersdorfer

Topics :: Finance & Accounting

Tags :: Government, International business, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The IASB at a Crossroads: The Future of International Financial Reporting Standards B" written by Karthik Ramanna, Karol Misztal, Daniela Beyersdorfer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ifrs Hoogervorst facing as an external strategic factors. Some of the topics covered in The IASB at a Crossroads: The Future of International Financial Reporting Standards B case study are - Strategic Management Strategies, Government, International business and Finance & Accounting.

Some of the macro environment factors that can be used to understand the The IASB at a Crossroads: The Future of International Financial Reporting Standards B casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing energy prices, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

---

---

---

---

Introduction to SWOT Analysis of The IASB at a Crossroads: The Future of International Financial Reporting Standards B

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The IASB at a Crossroads: The Future of International Financial Reporting Standards B case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ifrs Hoogervorst, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ifrs Hoogervorst 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B can be done for the following purposes –
1. Strategic planning using facts provided in The IASB at a Crossroads: The Future of International Financial Reporting Standards B case study
2. Improving business portfolio management of Ifrs Hoogervorst
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 Ifrs Hoogervorst

---

Strengths The IASB at a Crossroads: The Future of International Financial Reporting Standards B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Ifrs Hoogervorst in The IASB at a Crossroads: The Future of International Financial Reporting Standards B Harvard Business Review case study are -

Training and development

– Ifrs Hoogervorst has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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.

Cross disciplinary teams

– Horizontal connected teams at the Ifrs Hoogervorst 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.

Ability to recruit top talent

– Ifrs Hoogervorst is one of the leading recruiters in the industry. Managers in the The IASB at a Crossroads: The Future of International Financial Reporting Standards B are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Innovation driven organization

– Ifrs Hoogervorst is one of the most innovative firm in sector. Manager in The IASB at a Crossroads: The Future of International Financial Reporting Standards B Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Effective Research and Development (R&D)

– Ifrs Hoogervorst 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy in the The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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.

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Ifrs Hoogervorst digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ifrs Hoogervorst 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.

Superior customer experience

– The customer experience strategy of Ifrs Hoogervorst in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Ifrs Hoogervorst 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.

Learning organization

- Ifrs Hoogervorst 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 Ifrs Hoogervorst is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The IASB at a Crossroads: The Future of International Financial Reporting Standards B Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– Ifrs Hoogervorst has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ifrs Hoogervorst 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.

High brand equity

– Ifrs Hoogervorst has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ifrs Hoogervorst to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

---

---

Weaknesses The IASB at a Crossroads: The Future of International Financial Reporting Standards B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The IASB at a Crossroads: The Future of International Financial Reporting Standards B are -

High cash cycle compare to competitors

Ifrs Hoogervorst 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.

Slow to strategic competitive environment developments

– As The IASB at a Crossroads: The Future of International Financial Reporting Standards B HBR case study mentions - Ifrs Hoogervorst 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.

No frontier risks strategy

– After analyzing the HBR case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ifrs Hoogervorst is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Lack of clear differentiation of Ifrs Hoogervorst products

– To increase the profitability and margins on the products, Ifrs Hoogervorst needs to provide more differentiated products than what it is currently offering in the marketplace.

High bargaining power of channel partners

– Because of the regulatory requirements, Karthik Ramanna, Karol Misztal, Daniela Beyersdorfer suggests that, Ifrs Hoogervorst 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B, is just above the industry average. Ifrs Hoogervorst 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.

Aligning sales with marketing

– It come across in the case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B can leverage the sales team experience to cultivate customer relationships as Ifrs Hoogervorst is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B, in the dynamic environment Ifrs Hoogervorst has struggled to respond to the nimble upstart competition. Ifrs Hoogervorst has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Workers concerns about automation

– As automation is fast increasing in the segment, Ifrs Hoogervorst 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.

Capital Spending Reduction

– Even during the low interest decade, Ifrs Hoogervorst 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B | 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B are -

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. Ifrs Hoogervorst can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ifrs Hoogervorst 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 Ifrs Hoogervorst to hire the very best people irrespective of their geographical location.

Manufacturing automation

– Ifrs Hoogervorst 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.

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 Ifrs Hoogervorst in the consumer business. Now Ifrs Hoogervorst can target international markets with far fewer capital restrictions requirements than the existing system.

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 Ifrs Hoogervorst 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.

Using analytics as competitive advantage

– Ifrs Hoogervorst 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ifrs Hoogervorst to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Creating value in data economy

– The success of analytics program of Ifrs Hoogervorst has opened avenues for new revenue streams for the organization in the industry. This can help Ifrs Hoogervorst to build a more holistic ecosystem as suggested in the The IASB at a Crossroads: The Future of International Financial Reporting Standards B case study. Ifrs Hoogervorst 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, Ifrs Hoogervorst is facing challenges because of the dominance of functional experts in the organization. The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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.

Developing new processes and practices

– Ifrs Hoogervorst 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Ifrs Hoogervorst 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, The IASB at a Crossroads: The Future of International Financial Reporting Standards B, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Loyalty marketing

– Ifrs Hoogervorst 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.

Leveraging digital technologies

– Ifrs Hoogervorst 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.

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. Ifrs Hoogervorst can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

---

Threats The IASB at a Crossroads: The Future of International Financial Reporting Standards B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B are -

Shortening product life cycle

– it is one of the major threat that Ifrs Hoogervorst is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Ifrs Hoogervorst 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Ifrs Hoogervorst 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B .

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. Ifrs Hoogervorst 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.

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. Ifrs Hoogervorst can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Ifrs Hoogervorst 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. Ifrs Hoogervorst can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.

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 Ifrs Hoogervorst 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 Ifrs Hoogervorst with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The IASB at a Crossroads: The Future of International Financial Reporting Standards B, Ifrs Hoogervorst 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 .

Technology acceleration in Forth Industrial Revolution

– Ifrs Hoogervorst has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Ifrs Hoogervorst needs to keep up with the evolution of technology in the Finance & Accounting 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.

Regulatory challenges

– Ifrs Hoogervorst 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.

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.

---

Weighted SWOT Analysis of The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 The IASB at a Crossroads: The Future of International Financial Reporting Standards B 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 Ifrs Hoogervorst needs to make to build a sustainable competitive advantage.

--- ---