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, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, technology disruption,
wage bills are increasing, challanges to central banks by blockchain based private currencies, 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 -
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.
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.
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.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Risk Fullerton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Risk Fullerton 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.
Highly skilled collaborators
– Risk Fullerton 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 Fullerton: Risk Analytics and Business Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Strong track record of project management
– Risk Fullerton is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Risk Fullerton is one of the most innovative firm in sector. Manager in Fullerton: Risk Analytics and Business Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Risk Fullerton 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 Risk Fullerton is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fullerton: Risk Analytics and Business Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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 -
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.
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.
Need for greater diversity
– Risk Fullerton 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 operating costs
– Compare to the competitors, firm in the HBR case study Fullerton: Risk Analytics and Business Strategy 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 Risk Fullerton 's lucrative customers.
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.
Skills based hiring
– The stress on hiring functional specialists at Risk Fullerton 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.
Increasing silos among functional specialists
– The organizational structure of Risk Fullerton is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Risk Fullerton needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Risk Fullerton to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Risk Fullerton 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Risk Fullerton can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Risk Fullerton 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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Risk Fullerton 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. Risk Fullerton 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.
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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Risk Fullerton can use these opportunities to build new business models that can help the communities that Risk Fullerton operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 -
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.
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.
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.
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.
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 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.
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. Risk Fullerton 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.
Regulatory challenges
– Risk Fullerton needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
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.
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 .
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.
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.
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.
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.