China Risk Finance: Riding the Wave of China's Financial Services Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China Risk Finance: Riding the Wave of China's Financial Services Industry
To maximize their effectiveness, color cases should be printed in color.With China shifting toward a consumer-led growth model, non-bank lending has a critical role to play, but how easy is it to do business in this sector? What are the promises and pitfalls of the industry, and how well is Zane Wang, the case protagonist, navigating them?
Authors :: Regina Abrami, Matthew Shaffer, Weiqi Zhang
Swot Analysis of "China Risk Finance: Riding the Wave of China's Financial Services Industry" written by Regina Abrami, Matthew Shaffer, Weiqi Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Color.with Zane facing as an external strategic factors. Some of the topics covered in China Risk Finance: Riding the Wave of China's Financial Services Industry case study are - Strategic Management Strategies, Entrepreneurial finance, Financial management, Government, Marketing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the China Risk Finance: Riding the Wave of China's Financial Services Industry casestudy better are - – increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of China Risk Finance: Riding the Wave of China's Financial Services Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Risk Finance: Riding the Wave of China's Financial Services Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Color.with Zane, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Color.with Zane 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 China Risk Finance: Riding the Wave of China's Financial Services Industry can be done for the following purposes –
1. Strategic planning using facts provided in China Risk Finance: Riding the Wave of China's Financial Services Industry case study
2. Improving business portfolio management of Color.with Zane
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 Color.with Zane
Strengths China Risk Finance: Riding the Wave of China's Financial Services Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Color.with Zane in China Risk Finance: Riding the Wave of China's Financial Services Industry Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Color.with Zane digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Color.with Zane 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.
Organizational Resilience of Color.with Zane
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Color.with Zane does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Color.with Zane in the sector have low bargaining power. China Risk Finance: Riding the Wave of China's Financial Services Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Color.with Zane to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Color.with Zane has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Color.with Zane 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.
Innovation driven organization
– Color.with Zane is one of the most innovative firm in sector. Manager in China Risk Finance: Riding the Wave of China's Financial Services Industry 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 Color.with Zane 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.
Highly skilled collaborators
– Color.with Zane 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 China Risk Finance: Riding the Wave of China's Financial Services Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Color.with Zane is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Finance & Accounting field
– Color.with Zane 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 Color.with Zane in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Color.with Zane 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.
Analytics focus
– Color.with Zane 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 Regina Abrami, Matthew Shaffer, Weiqi Zhang 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.
Effective Research and Development (R&D)
– Color.with Zane 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 China Risk Finance: Riding the Wave of China's Financial Services Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses China Risk Finance: Riding the Wave of China's Financial Services Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Risk Finance: Riding the Wave of China's Financial Services Industry are -
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 Color.with Zane supply chain. Even after few cautionary changes mentioned in the HBR case study - China Risk Finance: Riding the Wave of China's Financial Services Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Color.with Zane vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China Risk Finance: Riding the Wave of China's Financial Services Industry 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 Color.with Zane has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China Risk Finance: Riding the Wave of China's Financial Services Industry, in the dynamic environment Color.with Zane has struggled to respond to the nimble upstart competition. Color.with Zane has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Color.with Zane has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Regina Abrami, Matthew Shaffer, Weiqi Zhang suggests that, Color.with Zane 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.
Aligning sales with marketing
– It come across in the case study China Risk Finance: Riding the Wave of China's Financial Services Industry 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 China Risk Finance: Riding the Wave of China's Financial Services Industry can leverage the sales team experience to cultivate customer relationships as Color.with Zane is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Color.with Zane is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Color.with Zane needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Color.with Zane to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Color.with Zane 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.
Need for greater diversity
– Color.with Zane 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.
Products dominated business model
– Even though Color.with Zane 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 - China Risk Finance: Riding the Wave of China's Financial Services Industry should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Color.with Zane 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. Color.with Zane 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.
Opportunities China Risk Finance: Riding the Wave of China's Financial Services Industry | 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 China Risk Finance: Riding the Wave of China's Financial Services Industry are -
Buying journey improvements
– Color.with Zane can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Risk Finance: Riding the Wave of China's Financial Services Industry 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Color.with Zane 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 Color.with Zane to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Color.with Zane has opened avenues for new revenue streams for the organization in the industry. This can help Color.with Zane to build a more holistic ecosystem as suggested in the China Risk Finance: Riding the Wave of China's Financial Services Industry case study. Color.with Zane can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Color.with Zane can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Color.with Zane 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Color.with Zane 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 Color.with Zane can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Color.with Zane can use these opportunities to build new business models that can help the communities that Color.with Zane operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Manufacturing automation
– Color.with Zane 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.
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. Color.with Zane 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. Color.with Zane 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 Color.with Zane 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.
Learning at scale
– Online learning technologies has now opened space for Color.with Zane 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.
Using analytics as competitive advantage
– Color.with Zane 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 China Risk Finance: Riding the Wave of China's Financial Services Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Color.with Zane to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats China Risk Finance: Riding the Wave of China's Financial Services Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Risk Finance: Riding the Wave of China's Financial Services Industry are -
Shortening product life cycle
– it is one of the major threat that Color.with Zane is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 China Risk Finance: Riding the Wave of China's Financial Services Industry, Color.with Zane may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Technology acceleration in Forth Industrial Revolution
– Color.with Zane has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Color.with Zane 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.
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. Color.with Zane needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Color.with Zane 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 China Risk Finance: Riding the Wave of China's Financial Services Industry .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Color.with Zane 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.
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 Color.with Zane in the Finance & Accounting sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Color.with Zane 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 Color.with Zane
– 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 Color.with Zane.
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. Color.with Zane 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.
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 Color.with Zane.
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 China Risk Finance: Riding the Wave of China's Financial Services Industry 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 China Risk Finance: Riding the Wave of China's Financial Services Industry 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 China Risk Finance: Riding the Wave of China's Financial Services Industry 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 China Risk Finance: Riding the Wave of China's Financial Services Industry 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 China Risk Finance: Riding the Wave of China's Financial Services Industry 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 Color.with Zane needs to make to build a sustainable competitive advantage.
