How to Disrupt Financial Services: An Interview with Peter Aceto SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of How to Disrupt Financial Services: An Interview with Peter Aceto
The CEO of Tangerine-formerly ING Direct Canada-describes his approach to leading and creating a disruptive business model in one of the most traditional industries: banking. In this wide-ranging interview, he explains how the culture he created embraces divergent views and encourages novel thinking. He also describes what happened when his firm was acquired by one of Canada's big banks (Scotiabank), and how the culture of disruptive innovation lives on at Tangerine.
Swot Analysis of "How to Disrupt Financial Services: An Interview with Peter Aceto" written by Francesco Bova, Peter Aceto includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tangerine Disruptive facing as an external strategic factors. Some of the topics covered in How to Disrupt Financial Services: An Interview with Peter Aceto case study are - Strategic Management Strategies, Leadership and Finance & Accounting.
Some of the macro environment factors that can be used to understand the How to Disrupt Financial Services: An Interview with Peter Aceto casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of How to Disrupt Financial Services: An Interview with Peter Aceto
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in How to Disrupt Financial Services: An Interview with Peter Aceto case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tangerine Disruptive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tangerine Disruptive 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 How to Disrupt Financial Services: An Interview with Peter Aceto can be done for the following purposes –
1. Strategic planning using facts provided in How to Disrupt Financial Services: An Interview with Peter Aceto case study
2. Improving business portfolio management of Tangerine Disruptive
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 Tangerine Disruptive
Strengths How to Disrupt Financial Services: An Interview with Peter Aceto | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tangerine Disruptive in How to Disrupt Financial Services: An Interview with Peter Aceto Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tangerine Disruptive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tangerine Disruptive 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.
High brand equity
– Tangerine Disruptive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tangerine Disruptive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– How to Disrupt Financial Services: An Interview with Peter Aceto firm has clearly differentiated products in the market place. This has enabled Tangerine Disruptive to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Tangerine Disruptive to invest into research and development (R&D) and innovation.
Learning organization
- Tangerine Disruptive 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 Tangerine Disruptive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in How to Disrupt Financial Services: An Interview with Peter Aceto Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Tangerine Disruptive 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 How to Disrupt Financial Services: An Interview with Peter Aceto - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the How to Disrupt Financial Services: An Interview with Peter Aceto 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.
Cross disciplinary teams
– Horizontal connected teams at the Tangerine Disruptive 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.
Innovation driven organization
– Tangerine Disruptive is one of the most innovative firm in sector. Manager in How to Disrupt Financial Services: An Interview with Peter Aceto 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
– Tangerine Disruptive 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 How to Disrupt Financial Services: An Interview with Peter Aceto HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Tangerine Disruptive is present in almost all the verticals within the industry. This has provided firm in How to Disrupt Financial Services: An Interview with Peter Aceto 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.
Ability to lead change in Finance & Accounting field
– Tangerine Disruptive 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 Tangerine Disruptive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Tangerine Disruptive is one of the leading recruiters in the industry. Managers in the How to Disrupt Financial Services: An Interview with Peter Aceto are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses How to Disrupt Financial Services: An Interview with Peter Aceto | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of How to Disrupt Financial Services: An Interview with Peter Aceto are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tangerine Disruptive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study How to Disrupt Financial Services: An Interview with Peter Aceto can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Tangerine Disruptive 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tangerine Disruptive 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.
Need for greater diversity
– Tangerine Disruptive 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.
Lack of clear differentiation of Tangerine Disruptive products
– To increase the profitability and margins on the products, Tangerine Disruptive needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study How to Disrupt Financial Services: An Interview with Peter Aceto, it seems that the employees of Tangerine Disruptive 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.
Increasing silos among functional specialists
– The organizational structure of Tangerine Disruptive is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Tangerine Disruptive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tangerine Disruptive to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Tangerine Disruptive 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Francesco Bova, Peter Aceto suggests that, Tangerine Disruptive 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 How to Disrupt Financial Services: An Interview with Peter Aceto, 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, Tangerine Disruptive 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.
Opportunities How to Disrupt Financial Services: An Interview with Peter Aceto | 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 How to Disrupt Financial Services: An Interview with Peter Aceto are -
Leveraging digital technologies
– Tangerine Disruptive 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tangerine Disruptive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Tangerine Disruptive 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tangerine Disruptive can use these opportunities to build new business models that can help the communities that Tangerine Disruptive operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Creating value in data economy
– The success of analytics program of Tangerine Disruptive has opened avenues for new revenue streams for the organization in the industry. This can help Tangerine Disruptive to build a more holistic ecosystem as suggested in the How to Disrupt Financial Services: An Interview with Peter Aceto case study. Tangerine Disruptive can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Tangerine Disruptive 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. Tangerine Disruptive 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tangerine Disruptive 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, How to Disrupt Financial Services: An Interview with Peter Aceto, 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 Tangerine Disruptive 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.
Building a culture of innovation
– managers at Tangerine Disruptive 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.
Developing new processes and practices
– Tangerine Disruptive 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tangerine Disruptive 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.
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 Tangerine Disruptive in the consumer business. Now Tangerine Disruptive can target international markets with far fewer capital restrictions requirements than the existing system.
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. Tangerine Disruptive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats How to Disrupt Financial Services: An Interview with Peter Aceto External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study How to Disrupt Financial Services: An Interview with Peter Aceto are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tangerine Disruptive 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 How to Disrupt Financial Services: An Interview with Peter Aceto .
Increasing wage structure of Tangerine Disruptive
– 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 Tangerine Disruptive.
High dependence on third party suppliers
– Tangerine Disruptive 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.
Technology acceleration in Forth Industrial Revolution
– Tangerine Disruptive has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Tangerine Disruptive 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.
Shortening product life cycle
– it is one of the major threat that Tangerine Disruptive is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Tangerine Disruptive.
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.
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. Tangerine Disruptive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Tangerine Disruptive in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Tangerine Disruptive 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tangerine Disruptive 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.
Stagnating economy with rate increase
– Tangerine Disruptive 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.
Weighted SWOT Analysis of How to Disrupt Financial Services: An Interview with Peter Aceto 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 How to Disrupt Financial Services: An Interview with Peter Aceto 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 How to Disrupt Financial Services: An Interview with Peter Aceto 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 How to Disrupt Financial Services: An Interview with Peter Aceto 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 How to Disrupt Financial Services: An Interview with Peter Aceto 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 Tangerine Disruptive needs to make to build a sustainable competitive advantage.