TradeCard: Building a Global Trading Electronic Payment System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TradeCard: Building a Global Trading Electronic Payment System
In an attempt to provide an online payment mechanism for large-dollar cross-border transactions, TradeCard, Inc. developed TradeCard, considered to be the world's first and only "Credit card" for international trade that contains all three "C's" of global trade transactions: credit, connectivity, and compliance. The case provides a study on how to build a viable international electronic payment system for business-to-business e-commerce. Looks into this new alternative online payment mechanism and how it is changing the international trade payment environment. Focuses on how TradeCard, Inc. built TradeCard: its technical architecture capable of providing a seamless online settlement transaction and a secure electronic solution involving synchronization of huge databases in an international transaction. Also revolves around the marketing issue that TradeCard, Inc. is facing: how to build the network of players in international trading and aggregating the disparate services necessary onto the TradeCard system.
Swot Analysis of "TradeCard: Building a Global Trading Electronic Payment System" written by Ali F. Farhoomand, Marissa McCauley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tradecard Payment facing as an external strategic factors. Some of the topics covered in TradeCard: Building a Global Trading Electronic Payment System case study are - Strategic Management Strategies, Globalization and Technology & Operations.
Some of the macro environment factors that can be used to understand the TradeCard: Building a Global Trading Electronic Payment System casestudy better are - – wage bills are increasing, geopolitical disruptions, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of TradeCard: Building a Global Trading Electronic Payment System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TradeCard: Building a Global Trading Electronic Payment System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tradecard Payment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tradecard Payment 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 TradeCard: Building a Global Trading Electronic Payment System can be done for the following purposes –
1. Strategic planning using facts provided in TradeCard: Building a Global Trading Electronic Payment System case study
2. Improving business portfolio management of Tradecard Payment
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tradecard Payment
Strengths TradeCard: Building a Global Trading Electronic Payment System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tradecard Payment in TradeCard: Building a Global Trading Electronic Payment System Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the TradeCard: Building a Global Trading Electronic Payment System 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 Technology & Operations segment
- digital transformation varies from industry to industry. For Tradecard Payment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tradecard Payment 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.
Strong track record of project management
– Tradecard Payment is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Tradecard Payment in the sector have low bargaining power. TradeCard: Building a Global Trading Electronic Payment System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tradecard Payment to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Tradecard Payment 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 TradeCard: Building a Global Trading Electronic Payment System - 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
– Tradecard Payment 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 Ali F. Farhoomand, Marissa McCauley 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.
Organizational Resilience of Tradecard Payment
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tradecard Payment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Tradecard Payment in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Tradecard Payment 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.
Successful track record of launching new products
– Tradecard Payment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tradecard Payment has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Tradecard Payment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tradecard Payment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Tradecard Payment 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 Tradecard Payment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TradeCard: Building a Global Trading Electronic Payment System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses TradeCard: Building a Global Trading Electronic Payment System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TradeCard: Building a Global Trading Electronic Payment System are -
Lack of clear differentiation of Tradecard Payment products
– To increase the profitability and margins on the products, Tradecard Payment needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Tradecard Payment 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.
No frontier risks strategy
– After analyzing the HBR case study TradeCard: Building a Global Trading Electronic Payment System, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TradeCard: Building a Global Trading Electronic Payment System, it seems that the employees of Tradecard Payment 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.
Slow decision making process
– As mentioned earlier in the report, Tradecard Payment 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. Tradecard Payment 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tradecard Payment is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TradeCard: Building a Global Trading Electronic Payment System can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As TradeCard: Building a Global Trading Electronic Payment System HBR case study mentions - Tradecard Payment 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.
Capital Spending Reduction
– Even during the low interest decade, Tradecard Payment 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.
High operating costs
– Compare to the competitors, firm in the HBR case study TradeCard: Building a Global Trading Electronic Payment System 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 Tradecard Payment 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TradeCard: Building a Global Trading Electronic Payment System, in the dynamic environment Tradecard Payment has struggled to respond to the nimble upstart competition. Tradecard Payment 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
– Tradecard Payment 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.
Opportunities TradeCard: Building a Global Trading Electronic Payment System | 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 TradeCard: Building a Global Trading Electronic Payment System are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tradecard Payment 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 Tradecard Payment to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tradecard Payment 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tradecard Payment 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, TradeCard: Building a Global Trading Electronic Payment System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tradecard Payment 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. Tradecard Payment 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Tradecard Payment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tradecard Payment is facing challenges because of the dominance of functional experts in the organization. TradeCard: Building a Global Trading Electronic Payment System 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.
Better consumer reach
– The expansion of the 5G network will help Tradecard Payment to increase its market reach. Tradecard Payment 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 Tradecard Payment 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.
Creating value in data economy
– The success of analytics program of Tradecard Payment has opened avenues for new revenue streams for the organization in the industry. This can help Tradecard Payment to build a more holistic ecosystem as suggested in the TradeCard: Building a Global Trading Electronic Payment System case study. Tradecard Payment can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Tradecard Payment 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 TradeCard: Building a Global Trading Electronic Payment System - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tradecard Payment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Tradecard Payment 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.
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 Tradecard Payment 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, Tradecard Payment can use these opportunities to build new business models that can help the communities that Tradecard Payment operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats TradeCard: Building a Global Trading Electronic Payment System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TradeCard: Building a Global Trading Electronic Payment System are -
Consumer confidence and its impact on Tradecard Payment 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tradecard Payment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Tradecard Payment business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TradeCard: Building a Global Trading Electronic Payment System, Tradecard Payment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Stagnating economy with rate increase
– Tradecard Payment 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.
Shortening product life cycle
– it is one of the major threat that Tradecard Payment is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Regulatory challenges
– Tradecard Payment 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 Technology & Operations industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tradecard Payment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tradecard Payment 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 TradeCard: Building a Global Trading Electronic Payment System .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tradecard Payment in the Technology & Operations industry. The Technology & Operations 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 acceleration in Forth Industrial Revolution
– Tradecard Payment has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Tradecard Payment needs to keep up with the evolution of technology in the Technology & Operations 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.
Weighted SWOT Analysis of TradeCard: Building a Global Trading Electronic Payment System 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 TradeCard: Building a Global Trading Electronic Payment System 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 TradeCard: Building a Global Trading Electronic Payment System 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 TradeCard: Building a Global Trading Electronic Payment System 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 TradeCard: Building a Global Trading Electronic Payment System 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 Tradecard Payment needs to make to build a sustainable competitive advantage.
