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 - – geopolitical disruptions, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, increasing energy prices,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Ability to recruit top talent
– Fintech Opener is one of the leading recruiters in the industry. Managers in the Cutting through the Fog: Finding a Future with Fintech are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Finance & Accounting field
– Fintech Opener 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 Fintech Opener in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Fintech Opener in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Sustainable margins compare to other players in Finance & Accounting industry
– Cutting through the Fog: Finding a Future with Fintech firm has clearly differentiated products in the market place. This has enabled Fintech Opener to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Fintech Opener to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Fintech Opener has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Fintech Opener 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.
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.
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.
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.
Lack of clear differentiation of Fintech Opener products
– To increase the profitability and margins on the products, Fintech Opener 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, 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.
Aligning sales with marketing
– It come across in the case study Cutting through the Fog: Finding a Future with Fintech that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cutting through the Fog: Finding a Future with Fintech can leverage the sales team experience to cultivate customer relationships as Fintech Opener is planning to shift buying processes online.
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 bargaining power of channel partners
– Because of the regulatory requirements, Yiorgos Allayannis, Kayla Cartwright suggests that, Fintech Opener 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.
No frontier risks strategy
– After analyzing the HBR case study Cutting through the Fog: Finding a Future with Fintech, 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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fintech Opener 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, Cutting through the Fog: Finding a Future with Fintech, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fintech Opener can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 Fintech Opener in the consumer business. Now Fintech Opener can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Fintech Opener 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 Cutting through the Fog: Finding a Future with Fintech - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fintech Opener to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Fintech Opener can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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 -
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.
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.
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.
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 Fintech Opener business can come under increasing regulations regarding data privacy, data security, etc.
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 .
Regulatory challenges
– Fintech Opener 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.
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.
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 wage structure of Fintech Opener
– 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 Fintech Opener.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cutting through the Fog: Finding a Future with Fintech, Fintech Opener 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 .
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.
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.
