The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A)
The panic of 1857 stands out in financial history for its severity, for the coordination of banks through the New York Clearing House (NYCH), for the establishment of a legal doctrine about illiquidity during a panic, and for its aggravation of regional tensions. Profiled in this case are the events of the panic, the range of potential causes, and the civic reaction.
Swot Analysis of "The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A)" written by Robert F. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Panic 1857 facing as an external strategic factors. Some of the topics covered in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) case study are - Strategic Management Strategies, Recession and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Panic 1857, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Panic 1857 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) case study
2. Improving business portfolio management of Panic 1857
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 Panic 1857
Strengths The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Panic 1857 in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Panic 1857 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Panic 1857 is one of the most innovative firm in sector. Manager in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Panic 1857 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Panic 1857 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Panic 1857 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Panic 1857 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.
Cross disciplinary teams
– Horizontal connected teams at the Panic 1857 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.
Effective Research and Development (R&D)
– Panic 1857 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Panic 1857 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Panic 1857 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.
Strong track record of project management
– Panic 1857 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Panic 1857 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.
Learning organization
- Panic 1857 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 Panic 1857 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Panic 1857 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 Robert F. Bruner 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) firm has clearly differentiated products in the market place. This has enabled Panic 1857 to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Panic 1857 to invest into research and development (R&D) and innovation.
Weaknesses The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) are -
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 Panic 1857 supply chain. Even after few cautionary changes mentioned in the HBR case study - The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Panic 1857 vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Panic 1857 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.
Increasing silos among functional specialists
– The organizational structure of Panic 1857 is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Panic 1857 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Panic 1857 to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Panic 1857 products
– To increase the profitability and margins on the products, Panic 1857 needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 Panic 1857 has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 Panic 1857 's lucrative customers.
High cash cycle compare to competitors
Panic 1857 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.
Low market penetration in new markets
– Outside its home market of Panic 1857, firm in the HBR case study The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A), in the dynamic environment Panic 1857 has struggled to respond to the nimble upstart competition. Panic 1857 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert F. Bruner suggests that, Panic 1857 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Panic 1857 needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) | 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) are -
Buying journey improvements
– Panic 1857 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Panic 1857 is facing challenges because of the dominance of functional experts in the organization. The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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.
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. Panic 1857 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. Panic 1857 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Panic 1857 to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Panic 1857 to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Panic 1857 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Panic 1857 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Panic 1857 in the consumer business. Now Panic 1857 can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Panic 1857 can use these opportunities to build new business models that can help the communities that Panic 1857 operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Panic 1857 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.
Manufacturing automation
– Panic 1857 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. Panic 1857 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Panic 1857 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
– Panic 1857 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.
Threats The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) are -
Shortening product life cycle
– it is one of the major threat that Panic 1857 is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Panic 1857 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.
High dependence on third party suppliers
– Panic 1857 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.
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. Panic 1857 needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Panic 1857 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Panic 1857 business can come under increasing regulations regarding data privacy, data security, 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 Panic 1857.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Panic 1857 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Panic 1857 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Panic 1857 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) .
Technology acceleration in Forth Industrial Revolution
– Panic 1857 has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Panic 1857 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.
Weighted SWOT Analysis of The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 The Panic of 1857, the New York Clearing House, and the Concept of Insolvency (A) 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 Panic 1857 needs to make to build a sustainable competitive advantage.