Bretton Woods and the Financial Crisis of 1971 (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bretton Woods and the Financial Crisis of 1971 (B)
In August 1971, President Richard Nixon had to decide how to respond to a growing "run" on the US dollar. Declining confidence in the dollar had led some national trading partners to redeem dollars for gold at the US Treasury's gold window. In the Bretton Woods system, the US dollar was the world's reserve currency. To supply sufficient money to accommodate growth in the global economy, the United States would inevitably run deficits in its balance of payments-which would ultimately force it to devalue its currency. The Bretton Woods system seemed engineered to fail. Nixon's two dominant policy alternatives were (a) do nothing; and (b) devalue the dollar by abandoning the commitment under the Bretton Woods Agreement to convert dollars into gold at $35/ounce. Students must assess the situation and recommend a course of action. The A case describes the Bretton Woods system, the run on the dollar, and Nixon's policy dilemma. The B case gives the text of Nixon's 1971 address outlining his New Economic Policy. The A and B abridged case shortens the total presentation by eliminating some of the quoted material; the student task in this case is to analyze Nixon's decision and decide on next steps. The C case presents a brief epilogue.
Swot Analysis of "Bretton Woods and the Financial Crisis of 1971 (B)" written by Robert F. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bretton Woods facing as an external strategic factors. Some of the topics covered in Bretton Woods and the Financial Crisis of 1971 (B) case study are - Strategic Management Strategies, Financial management, Financial markets, International business, Policy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Bretton Woods and the Financial Crisis of 1971 (B) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing energy prices, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Bretton Woods and the Financial Crisis of 1971 (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bretton Woods and the Financial Crisis of 1971 (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bretton Woods, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B) can be done for the following purposes –
1. Strategic planning using facts provided in Bretton Woods and the Financial Crisis of 1971 (B) case study
2. Improving business portfolio management of Bretton Woods
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 Bretton Woods
Strengths Bretton Woods and the Financial Crisis of 1971 (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bretton Woods in Bretton Woods and the Financial Crisis of 1971 (B) Harvard Business Review case study are -
Highly skilled collaborators
– Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Bretton Woods has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bretton Woods to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Bretton Woods digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bretton Woods 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Bretton Woods and the Financial Crisis of 1971 (B) firm has clearly differentiated products in the market place. This has enabled Bretton Woods to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Bretton Woods to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Bretton Woods 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.
Strong track record of project management
– Bretton Woods is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Bretton Woods is one of the most innovative firm in sector. Manager in Bretton Woods and the Financial Crisis of 1971 (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Finance & Accounting field
– Bretton Woods 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 Bretton Woods in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Bretton Woods is one of the leading recruiters in the industry. Managers in the Bretton Woods and the Financial Crisis of 1971 (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Bretton Woods in the sector have low bargaining power. Bretton Woods and the Financial Crisis of 1971 (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bretton Woods to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Bretton Woods
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bretton Woods does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Bretton Woods and the Financial Crisis of 1971 (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bretton Woods and the Financial Crisis of 1971 (B) are -
Skills based hiring
– The stress on hiring functional specialists at Bretton Woods 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.
Slow to strategic competitive environment developments
– As Bretton Woods and the Financial Crisis of 1971 (B) HBR case study mentions - Bretton Woods 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.
Slow decision making process
– As mentioned earlier in the report, Bretton Woods 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. Bretton Woods 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.
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 Bretton Woods supply chain. Even after few cautionary changes mentioned in the HBR case study - Bretton Woods and the Financial Crisis of 1971 (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bretton Woods vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Bretton Woods 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.
Low market penetration in new markets
– Outside its home market of Bretton Woods, firm in the HBR case study Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (B) can leverage the sales team experience to cultivate customer relationships as Bretton Woods is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert F. Bruner suggests that, Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B), in the dynamic environment Bretton Woods has struggled to respond to the nimble upstart competition. Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B), is just above the industry average. Bretton Woods 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.
Increasing silos among functional specialists
– The organizational structure of Bretton Woods is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Bretton Woods needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bretton Woods to focus more on services rather than just following the product oriented approach.
Opportunities Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (B) are -
Developing new processes and practices
– Bretton Woods can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Creating value in data economy
– The success of analytics program of Bretton Woods has opened avenues for new revenue streams for the organization in the industry. This can help Bretton Woods to build a more holistic ecosystem as suggested in the Bretton Woods and the Financial Crisis of 1971 (B) case study. Bretton Woods can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Bretton Woods can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Bretton Woods can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bretton Woods to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Bretton Woods to increase its market reach. Bretton Woods 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, Bretton Woods is facing challenges because of the dominance of functional experts in the organization. Bretton Woods and the Financial Crisis of 1971 (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.
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 Bretton Woods 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.
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 Bretton Woods in the consumer business. Now Bretton Woods can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Bretton Woods can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bretton Woods and the Financial Crisis of 1971 (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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bretton Woods can use these opportunities to build new business models that can help the communities that Bretton Woods operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Bretton Woods 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.
Loyalty marketing
– Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bretton Woods and the Financial Crisis of 1971 (B) are -
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. Bretton Woods can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Bretton Woods needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bretton Woods 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.
Stagnating economy with rate increase
– Bretton Woods can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
Shortening product life cycle
– it is one of the major threat that Bretton Woods is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bretton Woods with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bretton Woods and the Financial Crisis of 1971 (B), Bretton Woods 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 .
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 Bretton Woods in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Bretton Woods 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 wage structure of Bretton Woods
– 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 Bretton Woods.
Technology acceleration in Forth Industrial Revolution
– Bretton Woods has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bretton Woods 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.
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 Bretton Woods business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods and the Financial Crisis of 1971 (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 Bretton Woods needs to make to build a sustainable competitive advantage.
