Swot Analysis of "Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B)" written by Benjamin C. Esty, Aldo Sesia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basel Default facing as an external strategic factors. Some of the topics covered in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) case study are - Strategic Management Strategies, Negotiations, Project management, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is increasing trade war between United States & China, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basel Default, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basel Default 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) can be done for the following purposes –
1. Strategic planning using facts provided in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) case study
2. Improving business portfolio management of Basel Default
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 Basel Default
Strengths Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basel Default in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Basel Default 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)
– Basel Default 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Basel Default 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 Basel Default in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Basel Default 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Basel Default 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
- Basel Default 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 Basel Default is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Basel Default has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Basel Default to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Basel Default is present in almost all the verticals within the industry. This has provided firm in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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.
Low bargaining power of suppliers
– Suppliers of Basel Default in the sector have low bargaining power. Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basel Default to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Basel Default digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Basel Default 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.
Innovation driven organization
– Basel Default is one of the most innovative firm in sector. Manager in Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) firm has clearly differentiated products in the market place. This has enabled Basel Default to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Basel Default to invest into research and development (R&D) and innovation.
Weaknesses Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) are -
Low market penetration in new markets
– Outside its home market of Basel Default, firm in the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) can leverage the sales team experience to cultivate customer relationships as Basel Default is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), 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.
Skills based hiring
– The stress on hiring functional specialists at Basel Default 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.
Need for greater diversity
– Basel Default 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Benjamin C. Esty, Aldo Sesia suggests that, Basel Default 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), in the dynamic environment Basel Default has struggled to respond to the nimble upstart competition. Basel Default has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), is just above the industry average. Basel Default 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.
Capital Spending Reduction
– Even during the low interest decade, Basel Default 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), it seems that the employees of Basel Default 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 operating costs
– Compare to the competitors, firm in the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel Default 's lucrative customers.
Opportunities Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) | 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Basel Default 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.
Building a culture of innovation
– managers at Basel Default 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.
Creating value in data economy
– The success of analytics program of Basel Default has opened avenues for new revenue streams for the organization in the industry. This can help Basel Default to build a more holistic ecosystem as suggested in the Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) case study. Basel Default can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Basel Default to increase its market reach. Basel Default 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Basel Default is facing challenges because of the dominance of functional experts in the organization. Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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.
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. Basel Default can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Basel Default can use these opportunities to build new business models that can help the communities that Basel Default operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Basel Default 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 Basel Default to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Basel Default 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Basel Default to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Basel Default 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, Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Basel Default in the consumer business. Now Basel Default can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Basel Default can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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.
Loyalty marketing
– Basel Default 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) are -
Consumer confidence and its impact on Basel Default 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.
Technology acceleration in Forth Industrial Revolution
– Basel Default has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Basel Default 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.
Regulatory challenges
– Basel Default 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B), Basel Default 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 .
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 Basel Default 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 Basel Default.
High dependence on third party suppliers
– Basel Default high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Basel Default 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Basel Default 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 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. Basel Default needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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. Basel Default can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Basel Default with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B) 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 Basel Default needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B)
