Risk Management at Wellfleet Bank: All That Glitters Is Not Gold SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Risk Management at Wellfleet Bank: All That Glitters Is Not Gold
This case motivates a debate on the role of staff functions, such as risk management: what does it mean for them to be independent, and at the same time, to partner the business lines? The case describes the risk assessment process in the corporate banking arm of Wellfleet Bank (cca. 2006-2009) around an illustrative business proposal in the corporate lending business, and illustrates the decision challenges faced by the case protagonists (two senior risk officers of the Group Credit Committee)-who grapple with the tensions common between the sales organization and the risk control function in large financial institutions. The discussion of the proposal particularly evokes the cultural tension between the risk function and the business line: should the risk function play the role of policeman or business partner?
Swot Analysis of "Risk Management at Wellfleet Bank: All That Glitters Is Not Gold" written by Anette Mikes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Risk Wellfleet facing as an external strategic factors. Some of the topics covered in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold case study are - Strategic Management Strategies, Emerging markets, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Risk Management at Wellfleet Bank: All That Glitters Is Not Gold casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Risk Management at Wellfleet Bank: All That Glitters Is Not Gold
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Risk Wellfleet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Risk Wellfleet 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold can be done for the following purposes –
1. Strategic planning using facts provided in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold case study
2. Improving business portfolio management of Risk Wellfleet
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 Wellfleet
Strengths Risk Management at Wellfleet Bank: All That Glitters Is Not Gold | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Risk Wellfleet in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold Harvard Business Review case study are -
Learning organization
- Risk Wellfleet 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 Wellfleet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Risk Wellfleet is one of the leading recruiters in the industry. Managers in the Risk Management at Wellfleet Bank: All That Glitters Is Not Gold are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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.
High switching costs
– The high switching costs that Risk Wellfleet 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.
Training and development
– Risk Wellfleet has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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.
Highly skilled collaborators
– Risk Wellfleet 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Risk Wellfleet 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 Anette Mikes 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.
Cross disciplinary teams
– Horizontal connected teams at the Risk Wellfleet 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Risk Wellfleet digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Risk Wellfleet 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.
Superior customer experience
– The customer experience strategy of Risk Wellfleet in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Risk Wellfleet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Risk Wellfleet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Risk Management at Wellfleet Bank: All That Glitters Is Not Gold firm has clearly differentiated products in the market place. This has enabled Risk Wellfleet to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Risk Wellfleet to invest into research and development (R&D) and innovation.
Weaknesses Risk Management at Wellfleet Bank: All That Glitters Is Not Gold | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Risk Management at Wellfleet Bank: All That Glitters Is Not Gold are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Wellfleet has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Risk Management at Wellfleet Bank: All That Glitters Is Not Gold, in the dynamic environment Risk Wellfleet has struggled to respond to the nimble upstart competition. Risk Wellfleet 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold, is just above the industry average. Risk Wellfleet 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Risk Management at Wellfleet Bank: All That Glitters Is Not Gold, it seems that the employees of Risk Wellfleet 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.
Lack of clear differentiation of Risk Wellfleet products
– To increase the profitability and margins on the products, Risk Wellfleet needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Risk Wellfleet is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Risk Wellfleet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Risk Wellfleet to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Risk Wellfleet 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.
Capital Spending Reduction
– Even during the low interest decade, Risk Wellfleet 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.
Products dominated business model
– Even though Risk Wellfleet 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 - Risk Management at Wellfleet Bank: All That Glitters Is Not Gold should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Risk Wellfleet 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. Risk Wellfleet 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.
Aligning sales with marketing
– It come across in the case study Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold can leverage the sales team experience to cultivate customer relationships as Risk Wellfleet is planning to shift buying processes online.
Opportunities Risk Management at Wellfleet Bank: All That Glitters Is Not Gold | 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Risk Wellfleet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Risk Wellfleet 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Risk Wellfleet 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, Risk Management at Wellfleet Bank: All That Glitters Is Not Gold, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Risk Wellfleet 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.
Learning at scale
– Online learning technologies has now opened space for Risk Wellfleet 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Risk Wellfleet 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 Risk Wellfleet to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Risk Wellfleet 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Risk Wellfleet to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Risk Wellfleet 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.
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. Risk Wellfleet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Risk Wellfleet 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.
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 Risk Wellfleet in the consumer business. Now Risk Wellfleet 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 Risk Wellfleet to increase its market reach. Risk Wellfleet 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.
Developing new processes and practices
– Risk Wellfleet 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.
Threats Risk Management at Wellfleet Bank: All That Glitters Is Not Gold External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Risk Management at Wellfleet Bank: All That Glitters Is Not Gold are -
Stagnating economy with rate increase
– Risk Wellfleet 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.
Regulatory challenges
– Risk Wellfleet 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.
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 Wellfleet.
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 Wellfleet business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Risk Wellfleet 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 Wellfleet 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Risk Wellfleet 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.
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. Risk Wellfleet can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Risk Wellfleet
– 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 Wellfleet.
Shortening product life cycle
– it is one of the major threat that Risk Wellfleet is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Wellfleet needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Risk Wellfleet 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.
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. Risk Wellfleet 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.
Weighted SWOT Analysis of Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Risk Management at Wellfleet Bank: All That Glitters Is Not Gold 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 Wellfleet needs to make to build a sustainable competitive advantage.
