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 - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) 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.
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.
Superior customer experience
– The customer experience strategy of Bretton Woods in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Bretton Woods is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert F. Bruner can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Bretton Woods is one of the leading recruiters in the industry. Managers in the Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 -
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.
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.
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.
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 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 (A) and (B) (Abridged), 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged), 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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bretton Woods has relatively successful track record of launching new products.
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 -
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bretton Woods can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bretton Woods can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bretton Woods 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bretton Woods 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 Bretton Woods to hire the very best people irrespective of their geographical location.
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.
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 -
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.
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 .
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bretton Woods 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 Bretton Woods and the Financial Crisis of 1971 (A) and (B) (Abridged) .
Regulatory challenges
– Bretton Woods 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.
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.
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.
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.
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.
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.
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.
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.
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.