Fighting the Financial Crisis of 2008 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fighting the Financial Crisis of 2008
Set in January 2009, this case summarizes the events surrounding the financial crisis of 2008 as well as leading theories of its origin. Treasury Secretary Henry Paulson must brief the incoming Obama administration on what initiatives have been taken to fight the financial crisis and on what remains to be done. This is an exercise in self-evaluation: What should he say? The case highlights eight notable departures (or "pivots") in public policy.
Swot Analysis of "Fighting the Financial Crisis of 2008" written by Robert F. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crisis Paulson facing as an external strategic factors. Some of the topics covered in Fighting the Financial Crisis of 2008 case study are - Strategic Management Strategies, Recession and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Fighting the Financial Crisis of 2008 casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Fighting the Financial Crisis of 2008
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fighting the Financial Crisis of 2008 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crisis Paulson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crisis Paulson 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 Fighting the Financial Crisis of 2008 can be done for the following purposes –
1. Strategic planning using facts provided in Fighting the Financial Crisis of 2008 case study
2. Improving business portfolio management of Crisis Paulson
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 Crisis Paulson
Strengths Fighting the Financial Crisis of 2008 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crisis Paulson in Fighting the Financial Crisis of 2008 Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Fighting the Financial Crisis of 2008 firm has clearly differentiated products in the market place. This has enabled Crisis Paulson to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Crisis Paulson to invest into research and development (R&D) and innovation.
Organizational Resilience of Crisis Paulson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crisis Paulson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Crisis Paulson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Crisis Paulson 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.
Diverse revenue streams
– Crisis Paulson is present in almost all the verticals within the industry. This has provided firm in Fighting the Financial Crisis of 2008 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.
High switching costs
– The high switching costs that Crisis Paulson 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.
High brand equity
– Crisis Paulson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crisis Paulson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Crisis Paulson 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.
Ability to recruit top talent
– Crisis Paulson is one of the leading recruiters in the industry. Managers in the Fighting the Financial Crisis of 2008 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Fighting the Financial Crisis of 2008 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.
Low bargaining power of suppliers
– Suppliers of Crisis Paulson in the sector have low bargaining power. Fighting the Financial Crisis of 2008 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crisis Paulson to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Crisis Paulson 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 Fighting the Financial Crisis of 2008 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Fighting the Financial Crisis of 2008 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fighting the Financial Crisis of 2008 are -
High bargaining power of channel partners
– Because of the regulatory requirements, Robert F. Bruner suggests that, Crisis Paulson 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.
Interest costs
– Compare to the competition, Crisis Paulson 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.
Low market penetration in new markets
– Outside its home market of Crisis Paulson, firm in the HBR case study Fighting the Financial Crisis of 2008 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Fighting the Financial Crisis of 2008 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 Crisis Paulson 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Crisis Paulson 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fighting the Financial Crisis of 2008, in the dynamic environment Crisis Paulson has struggled to respond to the nimble upstart competition. Crisis Paulson has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Fighting the Financial Crisis of 2008, it seems that the employees of Crisis Paulson 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Fighting the Financial Crisis of 2008, is just above the industry average. Crisis Paulson 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.
Aligning sales with marketing
– It come across in the case study Fighting the Financial Crisis of 2008 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 Fighting the Financial Crisis of 2008 can leverage the sales team experience to cultivate customer relationships as Crisis Paulson is planning to shift buying processes online.
Need for greater diversity
– Crisis Paulson 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.
Products dominated business model
– Even though Crisis Paulson 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 - Fighting the Financial Crisis of 2008 should strive to include more intangible value offerings along with its core products and services.
Opportunities Fighting the Financial Crisis of 2008 | 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 Fighting the Financial Crisis of 2008 are -
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. Crisis Paulson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crisis Paulson is facing challenges because of the dominance of functional experts in the organization. Fighting the Financial Crisis of 2008 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 Crisis Paulson 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.
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. Crisis Paulson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Crisis Paulson 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crisis Paulson 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 Crisis Paulson to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Crisis Paulson has opened avenues for new revenue streams for the organization in the industry. This can help Crisis Paulson to build a more holistic ecosystem as suggested in the Fighting the Financial Crisis of 2008 case study. Crisis Paulson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crisis Paulson can use these opportunities to build new business models that can help the communities that Crisis Paulson operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Crisis Paulson 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. Crisis Paulson 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.
Loyalty marketing
– Crisis Paulson 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Crisis Paulson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Crisis Paulson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fighting the Financial Crisis of 2008 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.
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 Crisis Paulson in the consumer business. Now Crisis Paulson can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Fighting the Financial Crisis of 2008 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fighting the Financial Crisis of 2008 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.
High dependence on third party suppliers
– Crisis Paulson 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.
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 Crisis Paulson.
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. Crisis Paulson needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Crisis Paulson
– 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 Crisis Paulson.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fighting the Financial Crisis of 2008, Crisis Paulson 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 .
Technology acceleration in Forth Industrial Revolution
– Crisis Paulson has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Crisis Paulson 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.
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. Crisis Paulson 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Crisis Paulson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Crisis Paulson 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crisis Paulson 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 Fighting the Financial Crisis of 2008 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crisis Paulson 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.
Regulatory challenges
– Crisis Paulson 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.
Weighted SWOT Analysis of Fighting the Financial Crisis of 2008 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 Fighting the Financial Crisis of 2008 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 Fighting the Financial Crisis of 2008 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 Fighting the Financial Crisis of 2008 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 Fighting the Financial Crisis of 2008 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 Crisis Paulson needs to make to build a sustainable competitive advantage.