Measuring and Managing Risk in Commodities: Corn and the Golden Kernel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Measuring and Managing Risk in Commodities: Corn and the Golden Kernel
Risk managers have more tools than ever to help protect their companies from risk. Complex financial instruments, intricate mathematical models, and access to massive amounts of data can help the risk manager structure a multifaceted strategy to decrease volatility and protect the company from a catastrophic event. However, these tools have their own risks that can complicate a risk manager's job. Analyzing corn price volatility helps students understand four best practices for risk managers, regardless of the specific risks they face or the strategies they employ: quantify the company's exposure; understand the nature of the risk; understand how the hedge works in practice; and separate hedging and speculation.
Swot Analysis of "Measuring and Managing Risk in Commodities: Corn and the Golden Kernel" written by Russell Walker includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Risk Corn facing as an external strategic factors. Some of the topics covered in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel case study are - Strategic Management Strategies, Financial analysis, Financial management, Financial markets, Risk management, Strategic planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Measuring and Managing Risk in Commodities: Corn and the Golden Kernel casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing household debt because of falling income levels, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Measuring and Managing Risk in Commodities: Corn and the Golden Kernel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Risk Corn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Risk Corn 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel can be done for the following purposes –
1. Strategic planning using facts provided in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel case study
2. Improving business portfolio management of Risk Corn
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 Risk Corn
Strengths Measuring and Managing Risk in Commodities: Corn and the Golden Kernel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Risk Corn in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel Harvard Business Review case study are -
Innovation driven organization
– Risk Corn is one of the most innovative firm in sector. Manager in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Risk Corn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Risk Corn 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.
Learning organization
- Risk Corn 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 Risk Corn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Risk Corn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Risk Corn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Risk Corn 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Risk Corn in the sector have low bargaining power. Measuring and Managing Risk in Commodities: Corn and the Golden Kernel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Risk Corn to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Risk Corn 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.
Analytics focus
– Risk Corn 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 Russell Walker 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.
Diverse revenue streams
– Risk Corn is present in almost all the verticals within the industry. This has provided firm in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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.
Ability to recruit top talent
– Risk Corn is one of the leading recruiters in the industry. Managers in the Measuring and Managing Risk in Commodities: Corn and the Golden Kernel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Risk Corn has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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.
High brand equity
– Risk Corn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Risk Corn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Measuring and Managing Risk in Commodities: Corn and the Golden Kernel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Measuring and Managing Risk in Commodities: Corn and the Golden Kernel are -
Low market penetration in new markets
– Outside its home market of Risk Corn, firm in the HBR case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Russell Walker suggests that, Risk Corn 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.
Need for greater diversity
– Risk Corn has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Risk Corn 's lucrative customers.
Interest costs
– Compare to the competition, Risk Corn has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Risk Corn has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Measuring and Managing Risk in Commodities: Corn and the Golden Kernel should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Risk Corn is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel, is just above the industry average. Risk Corn 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.
Skills based hiring
– The stress on hiring functional specialists at Risk Corn 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.
Lack of clear differentiation of Risk Corn products
– To increase the profitability and margins on the products, Risk Corn needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Risk Corn 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.
Opportunities Measuring and Managing Risk in Commodities: Corn and the Golden Kernel | 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel are -
Using analytics as competitive advantage
– Risk Corn 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Risk Corn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Risk Corn 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. Risk Corn 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.
Creating value in data economy
– The success of analytics program of Risk Corn has opened avenues for new revenue streams for the organization in the industry. This can help Risk Corn to build a more holistic ecosystem as suggested in the Measuring and Managing Risk in Commodities: Corn and the Golden Kernel case study. Risk Corn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Risk Corn 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Risk Corn 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Risk Corn is facing challenges because of the dominance of functional experts in the organization. Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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.
Buying journey improvements
– Risk Corn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Measuring and Managing Risk in Commodities: Corn and the Golden Kernel suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Risk Corn 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Risk Corn 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.
Developing new processes and practices
– Risk Corn 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.
Manufacturing automation
– Risk Corn can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Learning at scale
– Online learning technologies has now opened space for Risk Corn 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Risk Corn 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, Measuring and Managing Risk in Commodities: Corn and the Golden Kernel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Measuring and Managing Risk in Commodities: Corn and the Golden Kernel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Risk Corn.
Increasing wage structure of Risk Corn
– 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 Risk Corn.
High dependence on third party suppliers
– Risk Corn 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Risk Corn 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel .
Consumer confidence and its impact on Risk Corn 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.
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 Risk Corn in the Finance & Accounting sector and impact the bottomline of the organization.
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. Risk Corn needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Risk Corn business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Risk Corn has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Risk Corn 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Measuring and Managing Risk in Commodities: Corn and the Golden Kernel, Risk Corn 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 .
Environmental challenges
– Risk Corn 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. Risk Corn can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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.
Weighted SWOT Analysis of Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Measuring and Managing Risk in Commodities: Corn and the Golden Kernel 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 Risk Corn needs to make to build a sustainable competitive advantage.
