The Financial Crisis of 2007-2009: The Road to Systemic Risk SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Financial Crisis of 2007-2009: The Road to Systemic Risk
This case invites students to evaluate, based on given materials, the causes, consequences, and potential resolutions of the financial crisis of 2007-2009. The premise of a business professor preparing a slide presentation dramatizes an analysis of the financial crisis. Reviewing his data, much of it in graph form, the professor ponders the central role of banks and the impact of risk management, leverage, and incentives. His main thesis is that the fundamental issue surrounding this crisis was the misjudgment of the risks taken, with the result that risk management failed to do its job of curtailing and managing risk as expected.
Swot Analysis of "The Financial Crisis of 2007-2009: The Road to Systemic Risk" written by Yiorgos Allayannis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Risk Crisis facing as an external strategic factors. Some of the topics covered in The Financial Crisis of 2007-2009: The Road to Systemic Risk case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Financial Crisis of 2007-2009: The Road to Systemic Risk casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, wage bills are increasing, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is backlash against globalization, technology disruption,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The Financial Crisis of 2007-2009: The Road to Systemic Risk
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Financial Crisis of 2007-2009: The Road to Systemic Risk case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Risk Crisis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Risk Crisis 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk can be done for the following purposes –
1. Strategic planning using facts provided in The Financial Crisis of 2007-2009: The Road to Systemic Risk case study
2. Improving business portfolio management of Risk Crisis
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Risk Crisis
Strengths The Financial Crisis of 2007-2009: The Road to Systemic Risk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Risk Crisis in The Financial Crisis of 2007-2009: The Road to Systemic Risk Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Risk Crisis in the sector have low bargaining power. The Financial Crisis of 2007-2009: The Road to Systemic Risk has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Risk Crisis to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Risk Crisis 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Risk Crisis 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 Yiorgos Allayannis 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.
Highly skilled collaborators
– Risk Crisis 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Risk Crisis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 lead change in Finance & Accounting field
– Risk Crisis 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 Risk Crisis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Risk Crisis is one of the leading recruiters in the industry. Managers in the The Financial Crisis of 2007-2009: The Road to Systemic Risk are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Risk Crisis is one of the most innovative firm in sector. Manager in The Financial Crisis of 2007-2009: The Road to Systemic Risk Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– The Financial Crisis of 2007-2009: The Road to Systemic Risk firm has clearly differentiated products in the market place. This has enabled Risk Crisis to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Risk Crisis to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The Financial Crisis of 2007-2009: The Road to Systemic Risk 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.
Strong track record of project management
– Risk Crisis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Risk Crisis 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.
Weaknesses The Financial Crisis of 2007-2009: The Road to Systemic Risk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Financial Crisis of 2007-2009: The Road to Systemic Risk are -
Low market penetration in new markets
– Outside its home market of Risk Crisis, firm in the HBR case study The Financial Crisis of 2007-2009: The Road to Systemic Risk needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As The Financial Crisis of 2007-2009: The Road to Systemic Risk HBR case study mentions - Risk Crisis 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Yiorgos Allayannis suggests that, Risk Crisis 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.
Need for greater diversity
– Risk Crisis 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Financial Crisis of 2007-2009: The Road to Systemic Risk, in the dynamic environment Risk Crisis has struggled to respond to the nimble upstart competition. Risk Crisis has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study The Financial Crisis of 2007-2009: The Road to Systemic Risk, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Risk Crisis products
– To increase the profitability and margins on the products, Risk Crisis needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Financial Crisis of 2007-2009: The Road to Systemic Risk HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Risk Crisis has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Risk Crisis 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Risk Crisis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 Risk Crisis 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 - The Financial Crisis of 2007-2009: The Road to Systemic Risk should strive to include more intangible value offerings along with its core products and services.
Opportunities The Financial Crisis of 2007-2009: The Road to Systemic Risk | 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk are -
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. Risk Crisis 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 Risk Crisis to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Risk Crisis to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Risk Crisis 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Risk Crisis to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Risk Crisis has opened avenues for new revenue streams for the organization in the industry. This can help Risk Crisis to build a more holistic ecosystem as suggested in the The Financial Crisis of 2007-2009: The Road to Systemic Risk case study. Risk Crisis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Risk Crisis 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Risk Crisis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Risk Crisis in the consumer business. Now Risk Crisis can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Risk Crisis 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, The Financial Crisis of 2007-2009: The Road to Systemic Risk, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Risk Crisis is facing challenges because of the dominance of functional experts in the organization. The Financial Crisis of 2007-2009: The Road to Systemic Risk 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.
Buying journey improvements
– Risk Crisis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Financial Crisis of 2007-2009: The Road to Systemic Risk 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.
Developing new processes and practices
– Risk Crisis 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Risk Crisis can use these opportunities to build new business models that can help the communities that Risk Crisis operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Risk Crisis 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. Risk Crisis 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.
Threats The Financial Crisis of 2007-2009: The Road to Systemic Risk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Financial Crisis of 2007-2009: The Road to Systemic Risk are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Risk Crisis 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Financial Crisis of 2007-2009: The Road to Systemic Risk, Risk Crisis 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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Risk Crisis business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Risk Crisis 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Risk Crisis 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.
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 Risk Crisis in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Risk Crisis 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Risk Crisis needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Risk Crisis has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Risk Crisis 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Risk Crisis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Risk Crisis
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Risk Crisis.
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.
Weighted SWOT Analysis of The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk 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 The Financial Crisis of 2007-2009: The Road to Systemic Risk is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Risk Crisis needs to make to build a sustainable competitive advantage.
