Goldman Sachs: Anchoring Standards After the Financial Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Goldman Sachs: Anchoring Standards After the Financial Crisis
Goldman Sachs, a longtime venerable financial institution headquartered in New York City, had a partnership culture that was known to value its clients. But when the financial crisis hit in 2008 and Goldman Sachs emerged relatively unscathed, its public image took a large blow as people questioned the inner workings of the bank. To address the situation, Goldman Sachs CEO Lloyd Blankfein called for the creation of the Business Standards Committee (BSC) to carry out a rigorous introspection of the firm. This case explores the reactions of the executives at the bank over the short- and medium-term to public accusations and scrutiny and whether the implemented solutions devised by the BSC are sustainable. It details the themes of individual and collective accountability, reputational awareness, and client care.
Swot Analysis of "Goldman Sachs: Anchoring Standards After the Financial Crisis" written by Rajiv Lal, Lisa Mazzanti includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sachs Goldman facing as an external strategic factors. Some of the topics covered in Goldman Sachs: Anchoring Standards After the Financial Crisis case study are - Strategic Management Strategies, Branding, Ethics, Financial management, Public relations, Recession and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Goldman Sachs: Anchoring Standards After the Financial Crisis casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing transportation and logistics costs, geopolitical disruptions, technology disruption, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of Goldman Sachs: Anchoring Standards After the Financial Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Goldman Sachs: Anchoring Standards After the Financial Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sachs Goldman, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sachs Goldman 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 Goldman Sachs: Anchoring Standards After the Financial Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Goldman Sachs: Anchoring Standards After the Financial Crisis case study
2. Improving business portfolio management of Sachs Goldman
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sachs Goldman
Strengths Goldman Sachs: Anchoring Standards After the Financial Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sachs Goldman in Goldman Sachs: Anchoring Standards After the Financial Crisis Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Goldman Sachs: Anchoring Standards After the Financial Crisis 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
– Sachs Goldman is present in almost all the verticals within the industry. This has provided firm in Goldman Sachs: Anchoring Standards After the Financial Crisis 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.
Organizational Resilience of Sachs Goldman
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sachs Goldman does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Sachs Goldman 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 Rajiv Lal, Lisa Mazzanti 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.
Superior customer experience
– The customer experience strategy of Sachs Goldman in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Sachs Goldman 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 Sachs Goldman 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
– Sachs Goldman has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Goldman Sachs: Anchoring Standards After the Financial Crisis 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Goldman Sachs: Anchoring Standards After the Financial Crisis firm has clearly differentiated products in the market place. This has enabled Sachs Goldman to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Sachs Goldman to invest into research and development (R&D) and innovation.
Ability to lead change in Sales & Marketing field
– Sachs Goldman 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 Sachs Goldman in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Sachs Goldman has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sachs Goldman 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.
Learning organization
- Sachs Goldman 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 Sachs Goldman is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Goldman Sachs: Anchoring Standards After the Financial Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Goldman Sachs: Anchoring Standards After the Financial Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Goldman Sachs: Anchoring Standards After the Financial Crisis are -
Lack of clear differentiation of Sachs Goldman products
– To increase the profitability and margins on the products, Sachs Goldman 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, Rajiv Lal, Lisa Mazzanti suggests that, Sachs Goldman 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.
No frontier risks strategy
– After analyzing the HBR case study Goldman Sachs: Anchoring Standards After the Financial Crisis, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Capital Spending Reduction
– Even during the low interest decade, Sachs Goldman 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Goldman Sachs: Anchoring Standards After the Financial Crisis, is just above the industry average. Sachs Goldman 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.
Increasing silos among functional specialists
– The organizational structure of Sachs Goldman is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Sachs Goldman needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sachs Goldman to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Goldman Sachs: Anchoring Standards After the Financial Crisis HBR case study mentions - Sachs Goldman 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.
Interest costs
– Compare to the competition, Sachs Goldman has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Sachs Goldman has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Sachs Goldman 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.
Slow decision making process
– As mentioned earlier in the report, Sachs Goldman 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. Sachs Goldman 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.
Opportunities Goldman Sachs: Anchoring Standards After the Financial Crisis | 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 Goldman Sachs: Anchoring Standards After the Financial Crisis 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. Sachs Goldman 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 Sales & Marketing industry, but it has also influenced the consumer preferences. Sachs Goldman can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sachs Goldman 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 Sachs Goldman to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Sachs Goldman 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.
Leveraging digital technologies
– Sachs Goldman 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sachs Goldman can use these opportunities to build new business models that can help the communities that Sachs Goldman operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sachs Goldman in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Sachs Goldman in the consumer business. Now Sachs Goldman can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sachs Goldman is facing challenges because of the dominance of functional experts in the organization. Goldman Sachs: Anchoring Standards After the Financial Crisis 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.
Building a culture of innovation
– managers at Sachs Goldman 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 Sales & Marketing segment.
Developing new processes and practices
– Sachs Goldman can develop new processes and procedures in Sales & Marketing 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.
Buying journey improvements
– Sachs Goldman can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Goldman Sachs: Anchoring Standards After the Financial Crisis 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.
Loyalty marketing
– Sachs Goldman 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.
Threats Goldman Sachs: Anchoring Standards After the Financial Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Goldman Sachs: Anchoring Standards After the Financial Crisis are -
Increasing wage structure of Sachs Goldman
– 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 Sachs Goldman.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sachs Goldman in the Sales & Marketing industry. The Sales & Marketing 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.
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. Sachs Goldman 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.
Stagnating economy with rate increase
– Sachs Goldman 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.
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.
Consumer confidence and its impact on Sachs Goldman 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.
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. Sachs Goldman needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Sachs Goldman 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 Sales & Marketing industry regulations.
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 Goldman Sachs: Anchoring Standards After the Financial Crisis, Sachs Goldman may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Sachs Goldman is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sachs Goldman 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, Sachs Goldman 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 Goldman Sachs: Anchoring Standards After the Financial Crisis .
Weighted SWOT Analysis of Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Goldman Sachs: Anchoring Standards After the Financial Crisis 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 Sachs Goldman needs to make to build a sustainable competitive advantage.