Bank USA: The Challenge of Compensation after the 2008 Financial Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bank USA: The Challenge of Compensation after the 2008 Financial Crisis
The case is set in the financial services industry during the financial crisis of 2008/09 and discusses issues when deciding on "fair" compensation packages for both senior management as well as risk managers. How can banks justify multimillion dollar bonuses to top management, when the institution is showing a loss/accepting government money to survive? Can compensation packages be competitive and please both employees and shareholders at different stages of the cycle? The case highlights the industry's soul-searching and attempts to appease an outraged public and manage possible future stress situations better.
Swot Analysis of "Bank USA: The Challenge of Compensation after the 2008 Financial Crisis" written by Claudia Zeisberger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Packages Compensation facing as an external strategic factors. Some of the topics covered in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis case study are - Strategic Management Strategies, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Bank USA: The Challenge of Compensation after the 2008 Financial Crisis casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, technology disruption, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
central banks are concerned over increasing inflation, increasing commodity prices, etc
Introduction to SWOT Analysis of Bank USA: The Challenge of Compensation after the 2008 Financial Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Packages Compensation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Packages Compensation 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 Bank USA: The Challenge of Compensation after the 2008 Financial Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis case study
2. Improving business portfolio management of Packages Compensation
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Packages Compensation
Strengths Bank USA: The Challenge of Compensation after the 2008 Financial Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Packages Compensation in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis Harvard Business Review case study are -
Ability to recruit top talent
– Packages Compensation is one of the leading recruiters in the industry. Managers in the Bank USA: The Challenge of Compensation after the 2008 Financial Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Packages Compensation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Packages Compensation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Packages Compensation 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 Packages Compensation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Packages Compensation is present in almost all the verticals within the industry. This has provided firm in Bank USA: The Challenge of Compensation after the 2008 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.
Effective Research and Development (R&D)
– Packages Compensation 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 Bank USA: The Challenge of Compensation after the 2008 Financial Crisis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Packages Compensation 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 Claudia Zeisberger 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.
Highly skilled collaborators
– Packages Compensation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bank USA: The Challenge of Compensation after the 2008 Financial Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Packages Compensation 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.
Operational resilience
– The operational resilience strategy in the Bank USA: The Challenge of Compensation after the 2008 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Packages Compensation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Packages Compensation 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.
Training and development
– Packages Compensation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bank USA: The Challenge of Compensation after the 2008 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.
Successful track record of launching new products
– Packages Compensation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Packages Compensation 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.
Weaknesses Bank USA: The Challenge of Compensation after the 2008 Financial Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank USA: The Challenge of Compensation after the 2008 Financial Crisis are -
Increasing silos among functional specialists
– The organizational structure of Packages Compensation is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Packages Compensation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Packages Compensation to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Packages Compensation 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 - Bank USA: The Challenge of Compensation after the 2008 Financial Crisis should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Packages Compensation 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bank USA: The Challenge of Compensation after the 2008 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 Packages Compensation has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Packages Compensation 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.
Slow decision making process
– As mentioned earlier in the report, Packages Compensation 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. Packages Compensation 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.
Low market penetration in new markets
– Outside its home market of Packages Compensation, firm in the HBR case study Bank USA: The Challenge of Compensation after the 2008 Financial Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Packages Compensation 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.
High cash cycle compare to competitors
Packages Compensation 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Claudia Zeisberger suggests that, Packages Compensation 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.
Interest costs
– Compare to the competition, Packages Compensation 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.
Opportunities Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 Financial Crisis are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Packages Compensation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Packages Compensation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Packages Compensation 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 Bank USA: The Challenge of Compensation after the 2008 Financial Crisis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Packages Compensation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Packages Compensation is facing challenges because of the dominance of functional experts in the organization. Bank USA: The Challenge of Compensation after the 2008 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.
Learning at scale
– Online learning technologies has now opened space for Packages Compensation 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
– Packages Compensation 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, Packages Compensation can use these opportunities to build new business models that can help the communities that Packages Compensation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Packages Compensation 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.
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 Packages Compensation to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Packages Compensation 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 Strategy & Execution segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Packages Compensation 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 Packages Compensation to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Packages Compensation can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Packages Compensation can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Packages Compensation can develop new processes and procedures in Strategy & Execution 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 Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 Financial Crisis are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Packages Compensation in the Strategy & Execution industry. The Strategy & Execution 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Packages Compensation 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 Packages Compensation
– 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 Packages Compensation.
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.
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 Packages Compensation in the Strategy & Execution sector and impact the bottomline of the organization.
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 Packages Compensation business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Packages Compensation 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 Strategy & Execution industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Packages Compensation.
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.
Stagnating economy with rate increase
– Packages Compensation 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.
Technology acceleration in Forth Industrial Revolution
– Packages Compensation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Packages Compensation needs to keep up with the evolution of technology in the Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bank USA: The Challenge of Compensation after the 2008 Financial Crisis, Packages Compensation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Shortening product life cycle
– it is one of the major threat that Packages Compensation is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 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 Bank USA: The Challenge of Compensation after the 2008 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 Packages Compensation needs to make to build a sustainable competitive advantage.
