Barclays and the Libor: Anatomy of a Scandal SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Barclays and the Libor: Anatomy of a Scandal
On June 27, 2012, the storied British bank Barclays admitted that it repeatedly attempted to rig the London Interbank Offered Rate (LIBOR) over a four-year period from 2005-2009. In its settlement, Barclays agreed to pay $453 million in fines and penalties to bank regulators in the U.K. and U.S. The media decried Barclays' rate-rigging efforts as "the scandal of all scandals" and bemoaned the spread of "Wall Street sleaze." By late 2012, dozens of other banks did indeed face LIBOR-rigging inquiries by regulators in various countries. This case delves into the scandal, exploring how the rate-rigging worked, who knew what when, and how the blame was laid, allowing students to explore the social and situational pressures involved in the rigging of the LIBOR.
Swot Analysis of "Barclays and the Libor: Anatomy of a Scandal" written by Ken Shotts, Sheila Melvin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Libor Rigging facing as an external strategic factors. Some of the topics covered in Barclays and the Libor: Anatomy of a Scandal case study are - Strategic Management Strategies, Crisis communication, Currency, Ethics, Financial management, Financial markets, International business, Motivating people and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Barclays and the Libor: Anatomy of a Scandal casestudy better are - – increasing energy prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, etc
Introduction to SWOT Analysis of Barclays and the Libor: Anatomy of a Scandal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barclays and the Libor: Anatomy of a Scandal case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Libor Rigging, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Libor Rigging 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 Barclays and the Libor: Anatomy of a Scandal can be done for the following purposes –
1. Strategic planning using facts provided in Barclays and the Libor: Anatomy of a Scandal case study
2. Improving business portfolio management of Libor Rigging
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 Libor Rigging
Strengths Barclays and the Libor: Anatomy of a Scandal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Libor Rigging in Barclays and the Libor: Anatomy of a Scandal Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Libor Rigging in the sector have low bargaining power. Barclays and the Libor: Anatomy of a Scandal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Libor Rigging to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Libor Rigging is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Libor Rigging digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Libor Rigging 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.
Ability to recruit top talent
– Libor Rigging is one of the leading recruiters in the industry. Managers in the Barclays and the Libor: Anatomy of a Scandal 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
– Libor Rigging has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Barclays and the Libor: Anatomy of a Scandal 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.
Superior customer experience
– The customer experience strategy of Libor Rigging in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Barclays and the Libor: Anatomy of a Scandal 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.
Highly skilled collaborators
– Libor Rigging 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 Barclays and the Libor: Anatomy of a Scandal HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Libor Rigging 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 Ken Shotts, Sheila Melvin 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Barclays and the Libor: Anatomy of a Scandal firm has clearly differentiated products in the market place. This has enabled Libor Rigging to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Libor Rigging to invest into research and development (R&D) and innovation.
Organizational Resilience of Libor Rigging
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Libor Rigging does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Libor Rigging 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 Barclays and the Libor: Anatomy of a Scandal - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Barclays and the Libor: Anatomy of a Scandal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barclays and the Libor: Anatomy of a Scandal are -
Lack of clear differentiation of Libor Rigging products
– To increase the profitability and margins on the products, Libor Rigging needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Ken Shotts, Sheila Melvin suggests that, Libor Rigging 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Libor Rigging is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Barclays and the Libor: Anatomy of a Scandal 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 Barclays and the Libor: Anatomy of a Scandal, is just above the industry average. Libor Rigging 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Barclays and the Libor: Anatomy of a Scandal 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 Libor Rigging 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 Barclays and the Libor: Anatomy of a Scandal, in the dynamic environment Libor Rigging has struggled to respond to the nimble upstart competition. Libor Rigging has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Barclays and the Libor: Anatomy of a Scandal HBR case study mentions - Libor Rigging 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.
Products dominated business model
– Even though Libor Rigging 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 - Barclays and the Libor: Anatomy of a Scandal should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Libor Rigging 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.
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 Libor Rigging supply chain. Even after few cautionary changes mentioned in the HBR case study - Barclays and the Libor: Anatomy of a Scandal, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Libor Rigging vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Libor Rigging 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.
Opportunities Barclays and the Libor: Anatomy of a Scandal | 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 Barclays and the Libor: Anatomy of a Scandal 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 Libor Rigging in the consumer business. Now Libor Rigging can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Libor Rigging 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 Libor Rigging to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Libor Rigging to increase its market reach. Libor Rigging 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.
Building a culture of innovation
– managers at Libor Rigging 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Libor Rigging 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.
Buying journey improvements
– Libor Rigging can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barclays and the Libor: Anatomy of a Scandal 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.
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. Libor Rigging 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. Libor Rigging 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 Libor Rigging has opened avenues for new revenue streams for the organization in the industry. This can help Libor Rigging to build a more holistic ecosystem as suggested in the Barclays and the Libor: Anatomy of a Scandal case study. Libor Rigging can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Libor Rigging 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.
Manufacturing automation
– Libor Rigging 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Libor Rigging is facing challenges because of the dominance of functional experts in the organization. Barclays and the Libor: Anatomy of a Scandal case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Libor Rigging 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.
Leveraging digital technologies
– Libor Rigging 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.
Threats Barclays and the Libor: Anatomy of a Scandal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barclays and the Libor: Anatomy of a Scandal are -
Environmental challenges
– Libor Rigging 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. Libor Rigging can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Libor Rigging 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.
Increasing wage structure of Libor Rigging
– 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 Libor Rigging.
High dependence on third party suppliers
– Libor Rigging 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.
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. Libor Rigging needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Libor Rigging 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Libor Rigging 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 Barclays and the Libor: Anatomy of a Scandal .
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 Libor Rigging in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Libor Rigging 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Barclays and the Libor: Anatomy of a Scandal, Libor Rigging 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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Libor Rigging with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Barclays and the Libor: Anatomy of a Scandal 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 Barclays and the Libor: Anatomy of a Scandal 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 Barclays and the Libor: Anatomy of a Scandal 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 Barclays and the Libor: Anatomy of a Scandal 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 Barclays and the Libor: Anatomy of a Scandal 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 Libor Rigging needs to make to build a sustainable competitive advantage.
