Fullerton: Risk Analytics and Business Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fullerton: Risk Analytics and Business Strategy
In the aftermath of the financial crisis of 2008, Fullerton India Credit Company Limited, a non-banking finance company, faced a dismal future. Weak credit issuance standards had exposed the company to significant risk and led its parent Temasek to inject new capital into the company to keep it afloat. The new CEO, Shantanu Mitra, embarked on a major restructuring exercise. First, he initiated a new credit appraisal system that centralized the credit underwriting process and simultaneously implemented significant cost reduction policies. Second, he recognized that the highly competitive nature of the Indian consumer and commercial loan markets compelled Fullerton to identify under-served segments with acceptable risk-return characteristics. He targeted the niche market segment of newly-emerging middle-class consumers who were being neglected by the formal banking system (because they found it difficult to accurately assess their credit risk) and also by microfinance institutions that mainly focused on the poorer sections of society. To achieve his goals, Mitra embraced a risk analytics framework to ensure that the credit underwriting process was not only compliant with Basel regulations but also consistent with the risk appetite articulated by the governing board. The case requires the student to discuss how the risk analytics framework can be used to drive strategic decisions about the composition of the lending portfolio (portfolio shape), the product-mix and the geographical-mix, without compromising on the risk appetite guidelines laid down by the board. Finally, the case also brings into focus issues related to organizational design, incentive mechanisms, and performance measurement.
Swot Analysis of "Fullerton: Risk Analytics and Business Strategy" written by Ravi Anshuman, Mitra Saby includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Risk Fullerton facing as an external strategic factors. Some of the topics covered in Fullerton: Risk Analytics and Business Strategy case study are - Strategic Management Strategies, Emerging markets, Motivating people, Performance measurement, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Fullerton: Risk Analytics and Business Strategy casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Fullerton: Risk Analytics and Business Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fullerton: Risk Analytics and Business Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Risk Fullerton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Risk Fullerton 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 Fullerton: Risk Analytics and Business Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Fullerton: Risk Analytics and Business Strategy case study
2. Improving business portfolio management of Risk Fullerton
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 Risk Fullerton
Strengths Fullerton: Risk Analytics and Business Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Risk Fullerton in Fullerton: Risk Analytics and Business Strategy Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Risk Fullerton 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.
Ability to lead change in Finance & Accounting field
– Risk Fullerton 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 Risk Fullerton in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Risk Fullerton is present in almost all the verticals within the industry. This has provided firm in Fullerton: Risk Analytics and Business Strategy 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.
Successful track record of launching new products
– Risk Fullerton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Risk Fullerton 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.
Operational resilience
– The operational resilience strategy in the Fullerton: Risk Analytics and Business Strategy 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Fullerton: Risk Analytics and Business Strategy firm has clearly differentiated products in the market place. This has enabled Risk Fullerton to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Risk Fullerton to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Risk Fullerton is one of the leading recruiters in the industry. Managers in the Fullerton: Risk Analytics and Business Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Risk Fullerton 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 Fullerton: Risk Analytics and Business Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Risk Fullerton in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Risk Fullerton has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Risk Fullerton to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Risk Fullerton
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Risk Fullerton does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Risk Fullerton has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fullerton: Risk Analytics and Business Strategy 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.
Weaknesses Fullerton: Risk Analytics and Business Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fullerton: Risk Analytics and Business Strategy are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Risk Fullerton is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fullerton: Risk Analytics and Business Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Risk Fullerton products
– To increase the profitability and margins on the products, Risk Fullerton needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Risk Fullerton 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. Risk Fullerton 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 strategic competitive environment developments
– As Fullerton: Risk Analytics and Business Strategy HBR case study mentions - Risk Fullerton 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.
Low market penetration in new markets
– Outside its home market of Risk Fullerton, firm in the HBR case study Fullerton: Risk Analytics and Business Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fullerton: Risk Analytics and Business Strategy, in the dynamic environment Risk Fullerton has struggled to respond to the nimble upstart competition. Risk Fullerton has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Fullerton: Risk Analytics and Business Strategy, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Interest costs
– Compare to the competition, Risk Fullerton 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 bargaining power of channel partners
– Because of the regulatory requirements, Ravi Anshuman, Mitra Saby suggests that, Risk Fullerton 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.
Products dominated business model
– Even though Risk Fullerton 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 - Fullerton: Risk Analytics and Business Strategy should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Risk Fullerton 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.
Opportunities Fullerton: Risk Analytics and Business Strategy | 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 Fullerton: Risk Analytics and Business Strategy are -
Building a culture of innovation
– managers at Risk Fullerton can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Leveraging digital technologies
– Risk Fullerton 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.
Developing new processes and practices
– Risk Fullerton 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.
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 Risk Fullerton in the consumer business. Now Risk Fullerton can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Risk Fullerton 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.
Buying journey improvements
– Risk Fullerton can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fullerton: Risk Analytics and Business Strategy 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.
Using analytics as competitive advantage
– Risk Fullerton 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 Fullerton: Risk Analytics and Business Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Risk Fullerton to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Risk Fullerton 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 Risk Fullerton to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Risk Fullerton has opened avenues for new revenue streams for the organization in the industry. This can help Risk Fullerton to build a more holistic ecosystem as suggested in the Fullerton: Risk Analytics and Business Strategy case study. Risk Fullerton can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Risk Fullerton 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, Fullerton: Risk Analytics and Business Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Risk Fullerton 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.
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 Risk Fullerton 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. Risk Fullerton can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Fullerton: Risk Analytics and Business Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fullerton: Risk Analytics and Business Strategy are -
Environmental challenges
– Risk Fullerton 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. Risk Fullerton can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Risk Fullerton has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Risk Fullerton needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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. Risk Fullerton needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that Risk Fullerton is facing in Finance & Accounting 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 Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Risk Fullerton can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Risk Fullerton
– 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 Risk Fullerton.
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 Risk Fullerton business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Risk Fullerton 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Risk Fullerton with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fullerton: Risk Analytics and Business Strategy, Risk Fullerton 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 Risk Fullerton in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Risk Fullerton 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 Fullerton: Risk Analytics and Business Strategy .
Weighted SWOT Analysis of Fullerton: Risk Analytics and Business Strategy 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 Fullerton: Risk Analytics and Business Strategy 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 Fullerton: Risk Analytics and Business Strategy 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 Fullerton: Risk Analytics and Business Strategy 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 Fullerton: Risk Analytics and Business Strategy 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 Risk Fullerton needs to make to build a sustainable competitive advantage.