Goldman Sachs (B): 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 (B): Determining the Potential of Social Impact Bonds

Partnering with Bloomberg Philanthropies, MDRC, the Vera Institute of Justice, and the New York State Department of Corrections, Goldman decided to go ahead with the social impact bond (SIB) project to reduce youth recidivism. If there were lower rates of recidivism under the program, the city would not have to repay Goldman's loans; Goldman would accept the risk. The city would in turn save money, allowing it to repay the bond. Before the bank knew whether the initiative would be successful, it was already moving on to new social investments. The firm was looking into an SIB to fund an expansion for a high-quality early childhood preschool program in the Granite School District of Central Salt Lake, Utah. The expansion would empower more children with early preparation, decreasing the need for special education and remedial services and saving the district money. Students are tasked with evaluating new social investment instruments, ways to mitigate risk, and the role of banks in social 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 (B): 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 Recidivism facing as an external strategic factors. Some of the topics covered in Goldman Sachs (B): 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 (B): Determining the Potential of Social Impact Bonds casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, wage bills are increasing, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, etc

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Introduction to SWOT Analysis of Goldman Sachs (B): 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 (B): 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 Recidivism, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goldman Recidivism 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Goldman Sachs (B): Determining the Potential of Social Impact Bonds can be done for the following purposes –
1. Strategic planning using facts provided in Goldman Sachs (B): Determining the Potential of Social Impact Bonds case study
2. Improving business portfolio management of Goldman Recidivism
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 Recidivism

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Strengths Goldman Sachs (B): 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 Recidivism in Goldman Sachs (B): Determining the Potential of Social Impact Bonds Harvard Business Review case study are -

High switching costs

– The high switching costs that Goldman Recidivism 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

– Goldman Recidivism has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Goldman Sachs (B): 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.

Organizational Resilience of Goldman Recidivism

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

Strong track record of project management

– Goldman Recidivism is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Successful track record of launching new products

– Goldman Recidivism has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goldman Recidivism 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.

Sustainable margins compare to other players in Finance & Accounting industry

– Goldman Sachs (B): Determining the Potential of Social Impact Bonds firm has clearly differentiated products in the market place. This has enabled Goldman Recidivism to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Goldman Recidivism to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– Goldman Recidivism 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 Goldman Sachs (B): Determining the Potential of Social Impact Bonds - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Cross disciplinary teams

– Horizontal connected teams at the Goldman Recidivism 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

– Goldman Recidivism 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.

Learning organization

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

Highly skilled collaborators

– Goldman Recidivism 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 Goldman Sachs (B): Determining the Potential of Social Impact Bonds HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– Goldman Recidivism is one of the most innovative firm in sector. Manager in Goldman Sachs (B): 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.

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Weaknesses Goldman Sachs (B): 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 (B): Determining the Potential of Social Impact Bonds are -

Interest costs

– Compare to the competition, Goldman Recidivism 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Goldman Recidivism is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Goldman Sachs (B): 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.

Products dominated business model

– Even though Goldman Recidivism 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 - Goldman Sachs (B): Determining the Potential of Social Impact Bonds should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, firm in the HBR case study Goldman Sachs (B): 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 Recidivism 's lucrative customers.

Capital Spending Reduction

– Even during the low interest decade, Goldman Recidivism 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.

Employees’ incomplete understanding of strategy

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

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Goldman Sachs (B): Determining the Potential of Social Impact Bonds, is just above the industry average. Goldman Recidivism 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.

Ability to respond to the competition

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

High cash cycle compare to competitors

Goldman Recidivism has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Need for greater diversity

– Goldman Recidivism 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 bargaining power of channel partners

– Because of the regulatory requirements, Andrew Hoffman suggests that, Goldman Recidivism 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.

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

Creating value in data economy

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

Manufacturing automation

– Goldman Recidivism 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, Goldman Recidivism is facing challenges because of the dominance of functional experts in the organization. Goldman Sachs (B): 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.

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. Goldman Recidivism 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. Goldman Recidivism 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.

Using analytics as competitive advantage

– Goldman Recidivism 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 (B): Determining the Potential of Social Impact Bonds - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goldman Recidivism 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 Goldman Recidivism 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. Goldman Recidivism can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Goldman Recidivism can use these opportunities to build new business models that can help the communities that Goldman Recidivism operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Goldman Recidivism 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, Goldman Sachs (B): Determining the Potential of Social Impact Bonds, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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

Building a culture of innovation

– managers at Goldman Recidivism 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.

Reforming the budgeting process

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

Loyalty marketing

– Goldman Recidivism 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.

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Threats Goldman Sachs (B): 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 (B): Determining the Potential of Social Impact Bonds are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Goldman Recidivism with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Recidivism 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Goldman Recidivism in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

Technology acceleration in Forth Industrial Revolution

– Goldman Recidivism has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Goldman Recidivism 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.

Regulatory challenges

– Goldman Recidivism 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.

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 Recidivism needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

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

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 Recidivism business can come under increasing regulations regarding data privacy, data security, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Goldman Sachs (B): Determining the Potential of Social Impact Bonds, Goldman Recidivism 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 .

Increasing wage structure of Goldman Recidivism

– 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 Recidivism.

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. Goldman Recidivism can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Stagnating economy with rate increase

– Goldman Recidivism 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.

Consumer confidence and its impact on Goldman Recidivism 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.

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Weighted SWOT Analysis of Goldman Sachs (B): 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 (B): 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 (B): 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 (B): 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 (B): 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 Recidivism needs to make to build a sustainable competitive advantage.

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