1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains
To meet consumer needs, global firms typically manufacture based on their aggregate production plan after receiving demand projections from all markets. One of the consequences of matching demand with manufacturing is that these plans generally ignore the impact of exchange rate fluctuations. Consolidated profits for global firms are significantly influenced by fluctuations in exchange rates, and opportunity exists to incorporate exchange rate uncertainty into global production planning. This article presents an operational hedging mechanism ('production hedging') based on manufacturing less than the total global demand. Due to uncertainty in exchange rates, the firm takes conservative action and deliberately manufactures a smaller quantity than its total global demand. The article shows how manufacturing less can create a higher profit. It provides prescriptions for marketing executives to quantify the economic value of market share. In addition, it demonstrates why operational hedging, in the form of production hedging, is more valuable than financial hedging.
Swot Analysis of "1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains" written by Burak Kazaz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hedging Exchange facing as an external strategic factors. Some of the topics covered in 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains case study are - Strategic Management Strategies, Manufacturing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains casestudy better are - – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hedging Exchange, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hedging Exchange 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains can be done for the following purposes –
1. Strategic planning using facts provided in 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains case study
2. Improving business portfolio management of Hedging Exchange
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 Hedging Exchange
Strengths 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hedging Exchange in 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains Harvard Business Review case study are -
Strong track record of project management
– Hedging Exchange is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Hedging Exchange 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Hedging Exchange digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hedging Exchange 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.
Diverse revenue streams
– Hedging Exchange is present in almost all the verticals within the industry. This has provided firm in 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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.
Superior customer experience
– The customer experience strategy of Hedging Exchange in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Hedging Exchange 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Hedging Exchange is one of the leading recruiters in the industry. Managers in the 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Hedging Exchange has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hedging Exchange 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.
Sustainable margins compare to other players in Finance & Accounting industry
– 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains firm has clearly differentiated products in the market place. This has enabled Hedging Exchange to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Hedging Exchange to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Hedging Exchange 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 Hedging Exchange in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Hedging Exchange 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
– Hedging Exchange has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hedging Exchange to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains are -
Lack of clear differentiation of Hedging Exchange products
– To increase the profitability and margins on the products, Hedging Exchange needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains, is just above the industry average. Hedging Exchange 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains, in the dynamic environment Hedging Exchange has struggled to respond to the nimble upstart competition. Hedging Exchange has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Hedging Exchange 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains, it seems that the employees of Hedging Exchange 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 Hedging Exchange has relatively successful track record of launching new products.
High cash cycle compare to competitors
Hedging Exchange 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.
Aligning sales with marketing
– It come across in the case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains can leverage the sales team experience to cultivate customer relationships as Hedging Exchange is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 Hedging Exchange 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Hedging Exchange is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Hedging Exchange needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hedging Exchange to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hedging Exchange is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains | 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains are -
Using analytics as competitive advantage
– Hedging Exchange 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hedging Exchange to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Hedging Exchange to increase its market reach. Hedging Exchange 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hedging Exchange can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Hedging Exchange 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.
Developing new processes and practices
– Hedging Exchange 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hedging Exchange 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 Hedging Exchange to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hedging Exchange 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, 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Hedging Exchange can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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.
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 Hedging Exchange 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.
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. Hedging Exchange can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hedging Exchange 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.
Learning at scale
– Online learning technologies has now opened space for Hedging Exchange 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hedging Exchange can use these opportunities to build new business models that can help the communities that Hedging Exchange operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hedging Exchange 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.
Environmental challenges
– Hedging Exchange 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. Hedging Exchange can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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. Hedging Exchange can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hedging Exchange 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains .
Stagnating economy with rate increase
– Hedging Exchange 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hedging Exchange will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Hedging Exchange needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains, Hedging Exchange 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 .
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 Hedging Exchange in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Hedging Exchange demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Hedging Exchange 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 1 greater than 2? Less Is More Under Volatile Exchange Rates In Global Supply Chains 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 Hedging Exchange needs to make to build a sustainable competitive advantage.
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