As 2012 approached the woes of the financial crisis seemed to be fading, companies were resuming business as usual and some of the scrutiny on corporate governance practices began to recede as well. That is until another major financial scandal emerged in Japan in the fall of 2011. It was slowly revealed that the 92-year-old camera and medical photo-imaging company, Olympus, had been hiding its losses for more than a decade - to the tune of $1.7 billion - long before the current economic pressures, slow job growth, and poor investor confidence plagued the global economy. The fraud renewed the focus on corporate governance policies world-wide, but especially in Japan, where the lack of board independence and a deep-rooted corporate culture entrenched in personal loyalties fostered an environment that made it difficult for scandals such as this to be unveiled, let alone for whistleblowers to come forward about them.
Authors :: Jay W. Lorsch, Suraj Srinivasan, Kathleen Durante
Swot Analysis of "Olympus (A)" written by Jay W. Lorsch, Suraj Srinivasan, Kathleen Durante includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Olympus Recede facing as an external strategic factors. Some of the topics covered in Olympus (A) case study are - Strategic Management Strategies, Corporate governance, Health and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Olympus (A) casestudy better are - – increasing government debt because of Covid-19 spendings, wage bills are increasing, there is increasing trade war between United States & China, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing transportation and logistics costs,
technology disruption, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olympus (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Olympus Recede, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Olympus Recede 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 Olympus (A) can be done for the following purposes –
1. Strategic planning using facts provided in Olympus (A) case study
2. Improving business portfolio management of Olympus Recede
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 Olympus Recede
Strengths Olympus (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Olympus Recede in Olympus (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Olympus Recede in the sector have low bargaining power. Olympus (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Olympus Recede to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Olympus Recede has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Olympus Recede 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.
Training and development
– Olympus Recede has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Olympus (A) 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.
Strong track record of project management
– Olympus Recede is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Olympus Recede is one of the most innovative firm in sector. Manager in Olympus (A) 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)
– Olympus Recede 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 Olympus (A) - 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 Olympus (A) 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.
Diverse revenue streams
– Olympus Recede is present in almost all the verticals within the industry. This has provided firm in Olympus (A) 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Olympus (A) firm has clearly differentiated products in the market place. This has enabled Olympus Recede to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Olympus Recede to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Olympus Recede is one of the leading recruiters in the industry. Managers in the Olympus (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Olympus Recede 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 Jay W. Lorsch, Suraj Srinivasan, Kathleen Durante 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
– Olympus Recede has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Olympus Recede to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Olympus (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympus (A) are -
Aligning sales with marketing
– It come across in the case study Olympus (A) 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 Olympus (A) can leverage the sales team experience to cultivate customer relationships as Olympus Recede is planning to shift buying processes online.
Products dominated business model
– Even though Olympus Recede 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 - Olympus (A) should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Olympus Recede 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Olympus Recede 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.
Low market penetration in new markets
– Outside its home market of Olympus Recede, firm in the HBR case study Olympus (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Olympus Recede supply chain. Even after few cautionary changes mentioned in the HBR case study - Olympus (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Olympus Recede vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Olympus Recede 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. Olympus Recede 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.
Skills based hiring
– The stress on hiring functional specialists at Olympus Recede 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Olympus (A), in the dynamic environment Olympus Recede has struggled to respond to the nimble upstart competition. Olympus Recede has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Olympus Recede 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.
Increasing silos among functional specialists
– The organizational structure of Olympus Recede is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Olympus Recede needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Olympus Recede to focus more on services rather than just following the product oriented approach.
Opportunities Olympus (A) | 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 Olympus (A) are -
Using analytics as competitive advantage
– Olympus Recede 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 Olympus (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Olympus Recede to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Olympus Recede can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Olympus (A) 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.
Manufacturing automation
– Olympus Recede 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 Olympus Recede to increase its market reach. Olympus Recede 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.
Learning at scale
– Online learning technologies has now opened space for Olympus Recede 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 Olympus Recede to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Olympus Recede can use these opportunities to build new business models that can help the communities that Olympus Recede operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Olympus Recede can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Olympus Recede is facing challenges because of the dominance of functional experts in the organization. Olympus (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Olympus Recede 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, Olympus (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Olympus Recede 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Olympus Recede can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Olympus Recede 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.
Threats Olympus (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olympus (A) are -
Regulatory challenges
– Olympus Recede 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.
Shortening product life cycle
– it is one of the major threat that Olympus Recede is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Olympus Recede 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olympus (A), Olympus Recede 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 .
Environmental challenges
– Olympus Recede 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. Olympus Recede can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Olympus Recede has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Olympus Recede 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.
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. Olympus Recede can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Olympus Recede 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.
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. Olympus Recede needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Olympus Recede with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Olympus Recede
– 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 Olympus Recede.
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 Olympus Recede in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Olympus (A) 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 Olympus (A) 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 Olympus (A) 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 Olympus (A) 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 Olympus (A) 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 Olympus Recede needs to make to build a sustainable competitive advantage.