Cutting through the Fog: Finding a Future with Fintech SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cutting through the Fog: Finding a Future with Fintech
The case examines the scope, history, and scale of the fintech industry, while also defining what fintech may be...and what it is not. The protagonist, management consultant Carolina Costa, is tasked to advise a client bank executive regarding alternative paths into fintech that he could choose. The material includes an overview of the fintech market, including analysis of entrants from start-up incubators, banks, and technology companies. The case figures and exhibits provide data to allow students to analyze the current market saturation and consumer needs in regard to fintech products. This case was designed for a second-year MBA elective course on financial institutions and markets but can also be taught in a first-year module on banking and financial institutions/financial landscape or as an opener to a core financial management course on strategic options, investment strategy, and value creation.
Swot Analysis of "Cutting through the Fog: Finding a Future with Fintech" written by Yiorgos Allayannis, Kayla Cartwright includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fintech Opener facing as an external strategic factors. Some of the topics covered in Cutting through the Fog: Finding a Future with Fintech case study are - Strategic Management Strategies, Growth strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Cutting through the Fog: Finding a Future with Fintech casestudy better are - – there is increasing trade war between United States & China, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing transportation and logistics costs, supply chains are disrupted by pandemic , technology disruption,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Cutting through the Fog: Finding a Future with Fintech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cutting through the Fog: Finding a Future with Fintech case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fintech Opener, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fintech Opener 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 Cutting through the Fog: Finding a Future with Fintech can be done for the following purposes –
1. Strategic planning using facts provided in Cutting through the Fog: Finding a Future with Fintech case study
2. Improving business portfolio management of Fintech Opener
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 Fintech Opener
Strengths Cutting through the Fog: Finding a Future with Fintech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fintech Opener in Cutting through the Fog: Finding a Future with Fintech Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Fintech Opener 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.
High brand equity
– Fintech Opener has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fintech Opener to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Fintech Opener in the sector have low bargaining power. Cutting through the Fog: Finding a Future with Fintech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fintech Opener to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Fintech Opener 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 Yiorgos Allayannis, Kayla Cartwright 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.
Effective Research and Development (R&D)
– Fintech Opener 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 Cutting through the Fog: Finding a Future with Fintech - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Fintech Opener
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fintech Opener does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Fintech Opener has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cutting through the Fog: Finding a Future with Fintech 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.
Innovation driven organization
– Fintech Opener is one of the most innovative firm in sector. Manager in Cutting through the Fog: Finding a Future with Fintech Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Fintech Opener 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 Cutting through the Fog: Finding a Future with Fintech HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Cutting through the Fog: Finding a Future with Fintech 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 Finance & Accounting segment
- digital transformation varies from industry to industry. For Fintech Opener digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fintech Opener 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.
Diverse revenue streams
– Fintech Opener is present in almost all the verticals within the industry. This has provided firm in Cutting through the Fog: Finding a Future with Fintech 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.
Weaknesses Cutting through the Fog: Finding a Future with Fintech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cutting through the Fog: Finding a Future with Fintech are -
Slow decision making process
– As mentioned earlier in the report, Fintech Opener 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. Fintech Opener 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cutting through the Fog: Finding a Future with Fintech 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 Fintech Opener has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Cutting through the Fog: Finding a Future with Fintech HBR case study mentions - Fintech Opener 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 Fintech Opener, firm in the HBR case study Cutting through the Fog: Finding a Future with Fintech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Fintech Opener 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Fintech Opener supply chain. Even after few cautionary changes mentioned in the HBR case study - Cutting through the Fog: Finding a Future with Fintech, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fintech Opener vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cutting through the Fog: Finding a Future with Fintech, it seems that the employees of Fintech Opener 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.
High cash cycle compare to competitors
Fintech Opener 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fintech Opener is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cutting through the Fog: Finding a Future with Fintech can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cutting through the Fog: Finding a Future with Fintech, is just above the industry average. Fintech Opener needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Products dominated business model
– Even though Fintech Opener 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 - Cutting through the Fog: Finding a Future with Fintech should strive to include more intangible value offerings along with its core products and services.
Opportunities Cutting through the Fog: Finding a Future with Fintech | 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 Cutting through the Fog: Finding a Future with Fintech are -
Creating value in data economy
– The success of analytics program of Fintech Opener has opened avenues for new revenue streams for the organization in the industry. This can help Fintech Opener to build a more holistic ecosystem as suggested in the Cutting through the Fog: Finding a Future with Fintech case study. Fintech Opener can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fintech Opener is facing challenges because of the dominance of functional experts in the organization. Cutting through the Fog: Finding a Future with Fintech 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fintech Opener can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Fintech Opener to increase its market reach. Fintech Opener 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fintech Opener 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fintech Opener can use these opportunities to build new business models that can help the communities that Fintech Opener operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Fintech Opener can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cutting through the Fog: Finding a Future with Fintech 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.
Developing new processes and practices
– Fintech Opener 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.
Building a culture of innovation
– managers at Fintech Opener 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
– Fintech Opener 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.
Loyalty marketing
– Fintech Opener 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. Fintech Opener 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. Fintech Opener 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.
Learning at scale
– Online learning technologies has now opened space for Fintech Opener 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.
Threats Cutting through the Fog: Finding a Future with Fintech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cutting through the Fog: Finding a Future with Fintech are -
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.
Environmental challenges
– Fintech Opener 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. Fintech Opener can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Fintech Opener needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Fintech Opener can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fintech Opener with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Fintech Opener 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fintech Opener in the Finance & Accounting industry. The Finance & Accounting 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fintech Opener 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 Cutting through the Fog: Finding a Future with Fintech .
High dependence on third party suppliers
– Fintech Opener high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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. Fintech Opener 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.
Technology acceleration in Forth Industrial Revolution
– Fintech Opener has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Fintech Opener 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.
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 Fintech Opener in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Cutting through the Fog: Finding a Future with Fintech 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 Cutting through the Fog: Finding a Future with Fintech 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 Cutting through the Fog: Finding a Future with Fintech 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 Cutting through the Fog: Finding a Future with Fintech 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 Cutting through the Fog: Finding a Future with Fintech 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 Fintech Opener needs to make to build a sustainable competitive advantage.