Swot Analysis of "The Portfolio Improvement Rule and the CAPM" written by Robin Greenwood, Mark Seasholes, David Biery includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Capm Rule facing as an external strategic factors. Some of the topics covered in The Portfolio Improvement Rule and the CAPM case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Portfolio Improvement Rule and the CAPM casestudy better are - – technology disruption, increasing energy prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of The Portfolio Improvement Rule and the CAPM
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Portfolio Improvement Rule and the CAPM case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Capm Rule, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Capm Rule 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 Portfolio Improvement Rule and the CAPM can be done for the following purposes –
1. Strategic planning using facts provided in The Portfolio Improvement Rule and the CAPM case study
2. Improving business portfolio management of Capm Rule
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 Capm Rule
Strengths The Portfolio Improvement Rule and the CAPM | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Capm Rule in The Portfolio Improvement Rule and the CAPM Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Capm Rule 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.
Training and development
– Capm Rule has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Portfolio Improvement Rule and the CAPM 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.
Learning organization
- Capm Rule 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 Capm Rule is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Portfolio Improvement Rule and the CAPM Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Capm Rule digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Capm Rule 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Portfolio Improvement Rule and the CAPM firm has clearly differentiated products in the market place. This has enabled Capm Rule to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Capm Rule to invest into research and development (R&D) and innovation.
Innovation driven organization
– Capm Rule is one of the most innovative firm in sector. Manager in The Portfolio Improvement Rule and the CAPM Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Capm Rule has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Capm Rule 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.
Highly skilled collaborators
– Capm Rule 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 Portfolio Improvement Rule and the CAPM HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Capm Rule 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 Robin Greenwood, Mark Seasholes, David Biery 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.
High brand equity
– Capm Rule has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Capm Rule to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Capm Rule
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Capm Rule does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Capm Rule in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses The Portfolio Improvement Rule and the CAPM | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Portfolio Improvement Rule and the CAPM are -
Aligning sales with marketing
– It come across in the case study The Portfolio Improvement Rule and the CAPM 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 The Portfolio Improvement Rule and the CAPM can leverage the sales team experience to cultivate customer relationships as Capm Rule is planning to shift buying processes online.
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 Capm Rule supply chain. Even after few cautionary changes mentioned in the HBR case study - The Portfolio Improvement Rule and the CAPM, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Capm Rule 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 The Portfolio Improvement Rule and the CAPM 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 Capm Rule has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Portfolio Improvement Rule and the CAPM, is just above the industry average. Capm Rule 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.
Products dominated business model
– Even though Capm Rule 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 Portfolio Improvement Rule and the CAPM should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study The Portfolio Improvement Rule and the CAPM, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Capm Rule 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.
Lack of clear differentiation of Capm Rule products
– To increase the profitability and margins on the products, Capm Rule needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study The Portfolio Improvement Rule and the CAPM 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 Capm Rule 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Robin Greenwood, Mark Seasholes, David Biery suggests that, Capm Rule 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.
Slow to strategic competitive environment developments
– As The Portfolio Improvement Rule and the CAPM HBR case study mentions - Capm Rule 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.
Opportunities The Portfolio Improvement Rule and the CAPM | 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 Portfolio Improvement Rule and the CAPM are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Capm Rule is facing challenges because of the dominance of functional experts in the organization. The Portfolio Improvement Rule and the CAPM 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Capm Rule can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Capm Rule 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 Capm Rule to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Capm Rule 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.
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. Capm Rule can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Capm Rule 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.
Buying journey improvements
– Capm Rule can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Portfolio Improvement Rule and the CAPM 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.
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 Capm Rule in the consumer business. Now Capm Rule can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Capm Rule to increase its market reach. Capm Rule will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Capm Rule can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Capm Rule 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.
Creating value in data economy
– The success of analytics program of Capm Rule has opened avenues for new revenue streams for the organization in the industry. This can help Capm Rule to build a more holistic ecosystem as suggested in the The Portfolio Improvement Rule and the CAPM case study. Capm Rule can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Capm Rule 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 Portfolio Improvement Rule and the CAPM, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats The Portfolio Improvement Rule and the CAPM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Portfolio Improvement Rule and the CAPM are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Capm Rule 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 Portfolio Improvement Rule and the CAPM .
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. Capm Rule 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.
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. Capm Rule can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Capm Rule 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.
Shortening product life cycle
– it is one of the major threat that Capm Rule is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Capm Rule
– 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 Capm Rule.
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 Capm Rule in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Capm Rule 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. Capm Rule can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Capm Rule needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Capm Rule.
Consumer confidence and its impact on Capm Rule 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.
Regulatory challenges
– Capm Rule 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.
Weighted SWOT Analysis of The Portfolio Improvement Rule and the CAPM 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 Portfolio Improvement Rule and the CAPM 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 Portfolio Improvement Rule and the CAPM 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 Portfolio Improvement Rule and the CAPM 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 Portfolio Improvement Rule and the CAPM 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 Capm Rule needs to make to build a sustainable competitive advantage.