Swot Analysis of "Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry" written by Lauren H. Cohen, Tom Grant, Christopher Malloy, William Powley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Peer Disintermediating facing as an external strategic factors. Some of the topics covered in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry casestudy better are - – geopolitical disruptions, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Peer Disintermediating, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry can be done for the following purposes –
1. Strategic planning using facts provided in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry case study
2. Improving business portfolio management of Peer Disintermediating
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 Peer Disintermediating
Strengths Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Peer Disintermediating in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry firm has clearly differentiated products in the market place. This has enabled Peer Disintermediating to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Peer Disintermediating to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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.
Operational resilience
– The operational resilience strategy in the Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry 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.
Highly skilled collaborators
– Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Peer Disintermediating 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 Lauren H. Cohen, Tom Grant, Christopher Malloy, William Powley 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.
Innovation driven organization
– Peer Disintermediating is one of the most innovative firm in sector. Manager in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Peer Disintermediating 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 Peer Disintermediating is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Peer Disintermediating 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.
Low bargaining power of suppliers
– Suppliers of Peer Disintermediating in the sector have low bargaining power. Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Peer Disintermediating to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Peer Disintermediating has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry 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.
High brand equity
– Peer Disintermediating has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Peer Disintermediating to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Peer Disintermediating 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.
Weaknesses Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry are -
Slow decision making process
– As mentioned earlier in the report, Peer Disintermediating 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. Peer Disintermediating 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.
Capital Spending Reduction
– Even during the low interest decade, Peer Disintermediating 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.
Aligning sales with marketing
– It come across in the case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry can leverage the sales team experience to cultivate customer relationships as Peer Disintermediating is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Peer Disintermediating is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry 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 Peer Disintermediating 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 - Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry, it seems that the employees of Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry, is just above the industry average. Peer Disintermediating 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.
Slow to strategic competitive environment developments
– As Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry HBR case study mentions - Peer Disintermediating 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 operating costs
– Compare to the competitors, firm in the HBR case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry 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 Peer Disintermediating 's lucrative customers.
Interest costs
– Compare to the competition, Peer Disintermediating 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.
No frontier risks strategy
– After analyzing the HBR case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry, 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.
Opportunities Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry are -
Loyalty marketing
– Peer Disintermediating 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.
Developing new processes and practices
– Peer Disintermediating 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Peer Disintermediating 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 Peer Disintermediating to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Peer Disintermediating has opened avenues for new revenue streams for the organization in the industry. This can help Peer Disintermediating to build a more holistic ecosystem as suggested in the Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry case study. Peer Disintermediating 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
– Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Peer Disintermediating to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Peer Disintermediating can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Peer Disintermediating can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Peer Disintermediating 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, Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Peer Disintermediating 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.
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 Peer Disintermediating in the consumer business. Now Peer Disintermediating can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Peer Disintermediating 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. Peer Disintermediating 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. Peer Disintermediating 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Peer Disintermediating 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.
Threats Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry are -
Shortening product life cycle
– it is one of the major threat that Peer Disintermediating is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Peer Disintermediating can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Peer Disintermediating 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry .
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 Peer Disintermediating business can come under increasing regulations regarding data privacy, data security, 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.
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. Peer Disintermediating 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.
Regulatory challenges
– Peer Disintermediating 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.
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 Peer Disintermediating with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Peer Disintermediating 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. Peer Disintermediating can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Peer Disintermediating 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.
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. Peer Disintermediating can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Peer Disintermediating
– 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 Peer Disintermediating.
Weighted SWOT Analysis of Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending 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 Peer Disintermediating needs to make to build a sustainable competitive advantage.
