Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 (A) and (B) (Abridged)
"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 (A) and (B) (Abridged)" 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 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) casestudy better are - – increasing transportation and logistics costs, wage bills are increasing, technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing household debt because of falling income levels,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged)
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 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) | 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 (A) and (B) (Abridged) Harvard Business Review case study are -
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.
Training and development
– Bretton Woods has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
Low bargaining power of suppliers
– Suppliers of Bretton Woods in the sector have low bargaining power. Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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.
Successful track record of launching new products
– Bretton Woods has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bretton Woods 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.
Innovation driven organization
– Bretton Woods is one of the most innovative firm in sector. Manager in Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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
– Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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.
Diverse revenue streams
– Bretton Woods is present in almost all the verticals within the industry. This has provided firm in Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 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.
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 (A) and (B) (Abridged) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Bretton Woods 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 Bretton Woods is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 (A) and (B) (Abridged) | 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 (A) and (B) (Abridged) are -
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.
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 (A) and (B) (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Bretton Woods 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.
Need for greater diversity
– Bretton Woods 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged), it seems that the employees of Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 Bretton Woods 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bretton Woods is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged), 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.
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.
Slow to strategic competitive environment developments
– As Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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.
Aligning sales with marketing
– It come across in the case study Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) can leverage the sales team experience to cultivate customer relationships as Bretton Woods is planning to shift buying processes online.
Opportunities Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) | 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 (A) and (B) (Abridged) 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bretton Woods in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 (A) and (B) (Abridged) 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 Bretton Woods 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.
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 (A) and (B) (Abridged) - 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.
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.
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 (A) and (B) (Abridged) case study. Bretton Woods can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bretton Woods can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bretton Woods 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, Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Bretton Woods to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 (A) and (B) (Abridged) 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.
Threats Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) are -
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 Bretton Woods.
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.
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.
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.
Environmental challenges
– Bretton Woods 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. Bretton Woods can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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.
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.
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. Bretton Woods 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.
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.
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 (A) and (B) (Abridged), 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 .
High dependence on third party suppliers
– Bretton Woods 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.
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.
Weighted SWOT Analysis of Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) 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 (A) and (B) (Abridged) 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.
