Financial System Security: Harshad Mehta and the Billion-Dollar Scam SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Financial System Security: Harshad Mehta and the Billion-Dollar Scam
The case is about the banking system and the financial markets scam with Harshad Mehta as the chief architect. Mehta was able to successfully exploit the deficiencies in the microstructure of the Indian financial system to siphon money from the banking system to the financial markets. With this money he manipulated the Indian capital markets causing a phenomenal increase in stock prices. When the scam was exposed, the capital markets crashed and thousands of investors lost their life savings; it also impacted several domestic and foreign banks operating in India.
Swot Analysis of "Financial System Security: Harshad Mehta and the Billion-Dollar Scam" written by Preeti Goyal, Sanjay Dhamija includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Scam Mehta facing as an external strategic factors. Some of the topics covered in Financial System Security: Harshad Mehta and the Billion-Dollar Scam case study are - Strategic Management Strategies, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Financial System Security: Harshad Mehta and the Billion-Dollar Scam casestudy better are - – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, wage bills are increasing,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Financial System Security: Harshad Mehta and the Billion-Dollar Scam
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Financial System Security: Harshad Mehta and the Billion-Dollar Scam case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scam Mehta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam can be done for the following purposes –
1. Strategic planning using facts provided in Financial System Security: Harshad Mehta and the Billion-Dollar Scam case study
2. Improving business portfolio management of Scam Mehta
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 Scam Mehta
Strengths Financial System Security: Harshad Mehta and the Billion-Dollar Scam | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Scam Mehta in Financial System Security: Harshad Mehta and the Billion-Dollar Scam Harvard Business Review case study are -
Training and development
– Scam Mehta has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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.
Ability to recruit top talent
– Scam Mehta is one of the leading recruiters in the industry. Managers in the Financial System Security: Harshad Mehta and the Billion-Dollar Scam are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Scam Mehta in the sector have low bargaining power. Financial System Security: Harshad Mehta and the Billion-Dollar Scam has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Scam Mehta to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Scam Mehta 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 Scam Mehta is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Financial System Security: Harshad Mehta and the Billion-Dollar Scam Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Scam Mehta has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Scam Mehta to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Scam Mehta 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 Scam Mehta in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Scam Mehta has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Scam Mehta 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
– Financial System Security: Harshad Mehta and the Billion-Dollar Scam firm has clearly differentiated products in the market place. This has enabled Scam Mehta to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Scam Mehta to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Scam Mehta is present in almost all the verticals within the industry. This has provided firm in Financial System Security: Harshad Mehta and the Billion-Dollar Scam case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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.
Weaknesses Financial System Security: Harshad Mehta and the Billion-Dollar Scam | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Financial System Security: Harshad Mehta and the Billion-Dollar Scam are -
Lack of clear differentiation of Scam Mehta products
– To increase the profitability and margins on the products, Scam Mehta needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Scam Mehta 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.
Need for greater diversity
– Scam Mehta 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 cash cycle compare to competitors
Scam Mehta 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Financial System Security: Harshad Mehta and the Billion-Dollar Scam, in the dynamic environment Scam Mehta has struggled to respond to the nimble upstart competition. Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam, is just above the industry average. Scam Mehta 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.
Aligning sales with marketing
– It come across in the case study Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam can leverage the sales team experience to cultivate customer relationships as Scam Mehta is planning to shift buying processes online.
Products dominated business model
– Even though Scam Mehta 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 - Financial System Security: Harshad Mehta and the Billion-Dollar Scam should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Financial System Security: Harshad Mehta and the Billion-Dollar Scam HBR case study mentions - Scam Mehta 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Financial System Security: Harshad Mehta and the Billion-Dollar Scam, it seems that the employees of Scam Mehta 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.
Skills based hiring
– The stress on hiring functional specialists at Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam | 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam are -
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. Scam Mehta 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. Scam Mehta 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.
Building a culture of innovation
– managers at Scam Mehta 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Scam Mehta 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Scam Mehta 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 Scam Mehta to hire the very best people irrespective of their geographical location.
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. Scam Mehta can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Scam Mehta in the consumer business. Now Scam Mehta can target international markets with far fewer capital restrictions requirements than the existing system.
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 Scam Mehta 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Scam Mehta 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, Financial System Security: Harshad Mehta and the Billion-Dollar Scam, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Scam Mehta 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.
Creating value in data economy
– The success of analytics program of Scam Mehta has opened avenues for new revenue streams for the organization in the industry. This can help Scam Mehta to build a more holistic ecosystem as suggested in the Financial System Security: Harshad Mehta and the Billion-Dollar Scam case study. Scam Mehta can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scam Mehta to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Scam Mehta 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.
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. Scam Mehta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Financial System Security: Harshad Mehta and the Billion-Dollar Scam External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Financial System Security: Harshad Mehta and the Billion-Dollar Scam are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Financial System Security: Harshad Mehta and the Billion-Dollar Scam, Scam Mehta 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 .
Stagnating economy with rate increase
– Scam Mehta 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.
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 Scam Mehta.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Scam Mehta 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam .
Increasing wage structure of Scam Mehta
– 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 Scam Mehta.
Technology acceleration in Forth Industrial Revolution
– Scam Mehta has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Scam Mehta 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.
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. Scam Mehta 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.
Consumer confidence and its impact on Scam Mehta 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Scam Mehta with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Scam Mehta 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.
Shortening product life cycle
– it is one of the major threat that Scam Mehta is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Scam Mehta 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. Scam Mehta can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Financial System Security: Harshad Mehta and the Billion-Dollar Scam 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 Scam Mehta needs to make to build a sustainable competitive advantage.