Cashing Out: The Future of Cash in Israel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cashing Out: The Future of Cash in Israel
It is impossible to predict the future, but this is a task policymakers are effectively expected to do when deciding how to deploy scarce resources to the benefit of future constituents. This case therefore looks at one tool in particular-scenario planning-that actors in both the public and private sector employ to, while not predicting the future, prepare for it as much as possible. The case uses Ilan Steiner, head of the Currency Department at the Israeli central bank as the protagonist; one of the biggest questions he has had to address in the last few years has been what the future of cash will look like. Some people argue that the proliferation of new technologies-such as Venmo-will make paper currency obsolete. Others point out that paper currency demand is actually increasing in many countries, despite the availability of digital payment systems. The case is divided into three sections. The first introduces Ilan Steiner and provides some background on currency use around the world. The second section introduces scenario planning and then discusses how railway executives employed scenario planning to investigate possible futures for coal demand and their impact on the railway industry. The last section is a memo 'from' Ilan that requests students to prepare their own scenario plan for the future of cash in Israel. Case number 2100.0
Swot Analysis of "Cashing Out: The Future of Cash in Israel" written by Mark Fagan, Benjamin Gilles includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ilan Scenario facing as an external strategic factors. Some of the topics covered in Cashing Out: The Future of Cash in Israel case study are - Strategic Management Strategies, Currency, Managing uncertainty, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Cashing Out: The Future of Cash in Israel casestudy better are - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Cashing Out: The Future of Cash in Israel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cashing Out: The Future of Cash in Israel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ilan Scenario, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ilan Scenario 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 Cashing Out: The Future of Cash in Israel can be done for the following purposes –
1. Strategic planning using facts provided in Cashing Out: The Future of Cash in Israel case study
2. Improving business portfolio management of Ilan Scenario
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ilan Scenario
Strengths Cashing Out: The Future of Cash in Israel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ilan Scenario in Cashing Out: The Future of Cash in Israel Harvard Business Review case study are -
Successful track record of launching new products
– Ilan Scenario has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ilan Scenario 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.
High brand equity
– Ilan Scenario has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ilan Scenario to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ilan Scenario 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 Cashing Out: The Future of Cash in Israel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ilan Scenario in the sector have low bargaining power. Cashing Out: The Future of Cash in Israel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ilan Scenario to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ilan Scenario 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 Cashing Out: The Future of Cash in Israel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Ilan Scenario in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Ilan Scenario 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 Ilan Scenario is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cashing Out: The Future of Cash in Israel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Cashing Out: The Future of Cash in Israel 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 Ilan Scenario 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.
Ability to recruit top talent
– Ilan Scenario is one of the leading recruiters in the industry. Managers in the Cashing Out: The Future of Cash in Israel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Ilan Scenario
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ilan Scenario does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Ilan Scenario 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 Mark Fagan, Benjamin Gilles 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.
Weaknesses Cashing Out: The Future of Cash in Israel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cashing Out: The Future of Cash in Israel are -
Slow to strategic competitive environment developments
– As Cashing Out: The Future of Cash in Israel HBR case study mentions - Ilan Scenario takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Ilan Scenario products
– To increase the profitability and margins on the products, Ilan Scenario needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Ilan Scenario 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cashing Out: The Future of Cash in Israel, is just above the industry average. Ilan Scenario 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Fagan, Benjamin Gilles suggests that, Ilan Scenario 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.
Capital Spending Reduction
– Even during the low interest decade, Ilan Scenario 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.
Slow decision making process
– As mentioned earlier in the report, Ilan Scenario has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ilan Scenario even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Ilan Scenario, firm in the HBR case study Cashing Out: The Future of Cash in Israel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Ilan Scenario is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ilan Scenario needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ilan Scenario to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Ilan Scenario 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.
Skills based hiring
– The stress on hiring functional specialists at Ilan Scenario 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.
Opportunities Cashing Out: The Future of Cash in Israel | 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 Cashing Out: The Future of Cash in Israel are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Ilan Scenario 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.
Creating value in data economy
– The success of analytics program of Ilan Scenario has opened avenues for new revenue streams for the organization in the industry. This can help Ilan Scenario to build a more holistic ecosystem as suggested in the Cashing Out: The Future of Cash in Israel case study. Ilan Scenario can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Ilan Scenario in the consumer business. Now Ilan Scenario can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Ilan Scenario can develop new processes and procedures in Strategy & Execution 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ilan Scenario 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 Ilan Scenario to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Ilan Scenario 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 Strategy & Execution segment.
Leveraging digital technologies
– Ilan Scenario 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 Ilan Scenario can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Ilan Scenario 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.
Manufacturing automation
– Ilan Scenario can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Ilan Scenario can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ilan Scenario is facing challenges because of the dominance of functional experts in the organization. Cashing Out: The Future of Cash in Israel 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.
Loyalty marketing
– Ilan Scenario 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 Cashing Out: The Future of Cash in Israel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cashing Out: The Future of Cash in Israel are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ilan Scenario can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ilan Scenario 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 Strategy & Execution industry regulations.
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 Ilan Scenario.
Shortening product life cycle
– it is one of the major threat that Ilan Scenario is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ilan Scenario 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 Cashing Out: The Future of Cash in Israel .
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 Ilan Scenario in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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 Ilan Scenario business can come under increasing regulations regarding data privacy, data security, etc.
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. Ilan Scenario 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.
Environmental challenges
– Ilan Scenario needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ilan Scenario can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cashing Out: The Future of Cash in Israel, Ilan Scenario may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
High dependence on third party suppliers
– Ilan Scenario 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.
Weighted SWOT Analysis of Cashing Out: The Future of Cash in Israel 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 Cashing Out: The Future of Cash in Israel 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 Cashing Out: The Future of Cash in Israel 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 Cashing Out: The Future of Cash in Israel 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 Cashing Out: The Future of Cash in Israel 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 Ilan Scenario needs to make to build a sustainable competitive advantage.
