Goldman Sachs (A): Determining the Potential of Social Impact Bonds SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Goldman Sachs (A): Determining the Potential of Social Impact Bonds

Head of Goldman Sachs' Urban Investment Group Alicia Glen will be making the case for creating a social impact bond (SIB) tomorrow. Proposed by New York Mayor Michael Bloomberg as an investment that will decrease adolescent incarceration rates, the SIB would be the first of its kind in the U.S. Goldman would have a first-mover advantage if it chooses to take part in the project, but it carries significant risk - the bank would be operating in an environment that is traditionally government and non-profit territory. Glen wondered if Goldman should invest only if a philanthropy, such as Bloomberg Philanthropies, would secure a portion of the loan. She also wondered if the transaction costs would be too high or if there were any legal or political hurdles on the horizon to stall implementation. Students are asked to gain an understanding of social investments and construct a 2X2 matrix to assess expectations for returns on social and financial impact.

Authors :: Andrew Hoffman

Topics :: Finance & Accounting

Tags :: Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Goldman Sachs (A): Determining the Potential of Social Impact Bonds" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Goldman Glen facing as an external strategic factors. Some of the topics covered in Goldman Sachs (A): Determining the Potential of Social Impact Bonds case study are - Strategic Management Strategies, Social enterprise, Social responsibility and Finance & Accounting.

Some of the macro environment factors that can be used to understand the Goldman Sachs (A): Determining the Potential of Social Impact Bonds casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing energy prices, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc

---

---

---

---

Introduction to SWOT Analysis of Goldman Sachs (A): Determining the Potential of Social Impact Bonds

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Goldman Sachs (A): Determining the Potential of Social Impact Bonds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goldman Glen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goldman Glen 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds can be done for the following purposes –
1. Strategic planning using facts provided in Goldman Sachs (A): Determining the Potential of Social Impact Bonds case study
2. Improving business portfolio management of Goldman Glen
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 Goldman Glen

---

Strengths Goldman Sachs (A): Determining the Potential of Social Impact Bonds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Goldman Glen in Goldman Sachs (A): Determining the Potential of Social Impact Bonds Harvard Business Review case study are -

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Goldman Glen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Goldman Glen 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.

Analytics focus

– Goldman Glen 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 Andrew Hoffman 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.

Superior customer experience

– The customer experience strategy of Goldman Glen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Organizational Resilience of Goldman Glen

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Goldman Glen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Training and development

– Goldman Glen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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.

Innovation driven organization

– Goldman Glen is one of the most innovative firm in sector. Manager in Goldman Sachs (A): Determining the Potential of Social Impact Bonds Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Cross disciplinary teams

– Horizontal connected teams at the Goldman Glen 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.

Operational resilience

– The operational resilience strategy in the Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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.

Ability to lead change in Finance & Accounting field

– Goldman Glen 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 Goldman Glen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Low bargaining power of suppliers

– Suppliers of Goldman Glen in the sector have low bargaining power. Goldman Sachs (A): Determining the Potential of Social Impact Bonds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goldman Glen to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Goldman Glen is one of the leading recruiters in the industry. Managers in the Goldman Sachs (A): Determining the Potential of Social Impact Bonds are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Learning organization

- Goldman Glen 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 Goldman Glen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Goldman Sachs (A): Determining the Potential of Social Impact Bonds Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

---

---

Weaknesses Goldman Sachs (A): Determining the Potential of Social Impact Bonds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Goldman Sachs (A): Determining the Potential of Social Impact Bonds are -

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds, is just above the industry average. Goldman Glen 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, Andrew Hoffman suggests that, Goldman Glen 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 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 Goldman Glen supply chain. Even after few cautionary changes mentioned in the HBR case study - Goldman Sachs (A): Determining the Potential of Social Impact Bonds, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Goldman Glen vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, firm in the HBR case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Glen 's lucrative customers.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds, it seems that the employees of Goldman Glen 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.

Need for greater diversity

– Goldman Glen 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.

Lack of clear differentiation of Goldman Glen products

– To increase the profitability and margins on the products, Goldman Glen needs to provide more differentiated products than what it is currently offering in the marketplace.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds, in the dynamic environment Goldman Glen has struggled to respond to the nimble upstart competition. Goldman Glen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow decision making process

– As mentioned earlier in the report, Goldman Glen 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. Goldman Glen 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Goldman Glen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Low market penetration in new markets

– Outside its home market of Goldman Glen, firm in the HBR case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

---

Opportunities Goldman Sachs (A): Determining the Potential of Social Impact Bonds | 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds are -

Leveraging digital technologies

– Goldman Glen 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.

Using analytics as competitive advantage

– Goldman Glen 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goldman Glen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Goldman Glen in the consumer business. Now Goldman Glen can target international markets with far fewer capital restrictions requirements than the existing system.

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. Goldman Glen can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Goldman Glen 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.

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. Goldman Glen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Goldman Glen 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 Goldman Glen to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Goldman Glen 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Goldman Glen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Goldman Glen is facing challenges because of the dominance of functional experts in the organization. Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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.

Creating value in data economy

– The success of analytics program of Goldman Glen has opened avenues for new revenue streams for the organization in the industry. This can help Goldman Glen to build a more holistic ecosystem as suggested in the Goldman Sachs (A): Determining the Potential of Social Impact Bonds case study. Goldman Glen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Goldman Glen 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.

Developing new processes and practices

– Goldman Glen 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Glen.

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.

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 Goldman Glen business can come under increasing regulations regarding data privacy, data security, 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. Goldman Glen needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Goldman Glen 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 wage structure of Goldman Glen

– 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 Goldman Glen.

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 Goldman Glen in the Finance & Accounting sector and impact the bottomline of the organization.

Regulatory challenges

– Goldman Glen 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Goldman Glen 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.

Shortening product life cycle

– it is one of the major threat that Goldman Glen is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Goldman Glen 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.

High dependence on third party suppliers

– Goldman Glen 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.

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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Sachs (A): Determining the Potential of Social Impact Bonds 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 Goldman Glen needs to make to build a sustainable competitive advantage.

--- ---