An Overview of Risk and Risk Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of An Overview of Risk and Risk Management
This note was developed to summarize how some managers and firms are approaching risk management, and to provide a risk assessment tool that can be used to complement current risk management frameworks. Leaders are compensated and operate in conditions of risk. The risk assessment tool is based on: identification, information, interests, incentives and infrastructure.The note was developed to provide participants with an integrated framework to identify and manage risk. It clearly shows that risk is endemic to business activities but needs to be managed in a strategic manner. It also points out that risk management has strategic, operational and tactical dimensions and is much broader than the volatility dimensions of risk stressed in financial management.
Swot Analysis of "An Overview of Risk and Risk Management" written by Murray J. Bryant, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Risk Dimensions facing as an external strategic factors. Some of the topics covered in An Overview of Risk and Risk Management case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the An Overview of Risk and Risk Management casestudy better are - – technology disruption, increasing commodity prices, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of An Overview of Risk and Risk Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in An Overview of Risk and Risk Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Risk Dimensions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Risk Dimensions 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 An Overview of Risk and Risk Management can be done for the following purposes –
1. Strategic planning using facts provided in An Overview of Risk and Risk Management case study
2. Improving business portfolio management of Risk Dimensions
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 Dimensions
Strengths An Overview of Risk and Risk Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Risk Dimensions in An Overview of Risk and Risk Management Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Risk Dimensions in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Risk Dimensions 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 An Overview of Risk and Risk Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– An Overview of Risk and Risk Management firm has clearly differentiated products in the market place. This has enabled Risk Dimensions to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Risk Dimensions to invest into research and development (R&D) and innovation.
Organizational Resilience of Risk Dimensions
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Risk Dimensions does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Risk Dimensions is one of the most innovative firm in sector. Manager in An Overview of Risk and Risk Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Risk Dimensions in the sector have low bargaining power. An Overview of Risk and Risk Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Risk Dimensions to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Risk Dimensions has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in An Overview of Risk and Risk Management 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.
Operational resilience
– The operational resilience strategy in the An Overview of Risk and Risk Management 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.
High brand equity
– Risk Dimensions has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Risk Dimensions to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Risk Dimensions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Risk Dimensions 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
– Risk Dimensions 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 An Overview of Risk and Risk Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Risk Dimensions is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses An Overview of Risk and Risk Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of An Overview of Risk and Risk Management are -
Capital Spending Reduction
– Even during the low interest decade, Risk Dimensions 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study An Overview of Risk and Risk Management, in the dynamic environment Risk Dimensions has struggled to respond to the nimble upstart competition. Risk Dimensions has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study An Overview of Risk and Risk Management 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 Risk Dimensions 's lucrative customers.
Lack of clear differentiation of Risk Dimensions products
– To increase the profitability and margins on the products, Risk Dimensions needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Risk Dimensions 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 - An Overview of Risk and Risk Management should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study An Overview of Risk and Risk Management 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 An Overview of Risk and Risk Management can leverage the sales team experience to cultivate customer relationships as Risk Dimensions 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, Risk Dimensions is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study An Overview of Risk and Risk Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study An Overview of Risk and Risk Management, is just above the industry average. Risk Dimensions 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.
Increasing silos among functional specialists
– The organizational structure of Risk Dimensions is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Risk Dimensions needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Risk Dimensions to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Risk Dimensions 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.
Slow to strategic competitive environment developments
– As An Overview of Risk and Risk Management HBR case study mentions - Risk Dimensions 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 An Overview of Risk and Risk Management | 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 An Overview of Risk and Risk Management are -
Creating value in data economy
– The success of analytics program of Risk Dimensions has opened avenues for new revenue streams for the organization in the industry. This can help Risk Dimensions to build a more holistic ecosystem as suggested in the An Overview of Risk and Risk Management case study. Risk Dimensions can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Risk Dimensions 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.
Building a culture of innovation
– managers at Risk Dimensions 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.
Developing new processes and practices
– Risk Dimensions 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.
Learning at scale
– Online learning technologies has now opened space for Risk Dimensions 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.
Better consumer reach
– The expansion of the 5G network will help Risk Dimensions to increase its market reach. Risk Dimensions 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Risk Dimensions can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Risk Dimensions 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.
Loyalty marketing
– Risk Dimensions 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Risk Dimensions is facing challenges because of the dominance of functional experts in the organization. An Overview of Risk and Risk Management 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.
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 Dimensions can use these opportunities to build new business models that can help the communities that Risk Dimensions operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Risk Dimensions 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.
Using analytics as competitive advantage
– Risk Dimensions 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 An Overview of Risk and Risk Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Risk Dimensions to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats An Overview of Risk and Risk Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study An Overview of Risk and Risk Management are -
Stagnating economy with rate increase
– Risk Dimensions 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.
Regulatory challenges
– Risk Dimensions 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Risk Dimensions 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 An Overview of Risk and Risk Management .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study An Overview of Risk and Risk Management, Risk Dimensions 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 .
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 Dimensions in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Risk Dimensions 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.
High dependence on third party suppliers
– Risk Dimensions 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Risk Dimensions 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. Risk Dimensions can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Risk Dimensions 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.
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 Dimensions business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Risk Dimensions with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Risk Dimensions has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Risk Dimensions 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.
Weighted SWOT Analysis of An Overview of Risk and Risk Management 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 An Overview of Risk and Risk Management 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 An Overview of Risk and Risk Management 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 An Overview of Risk and Risk Management 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 An Overview of Risk and Risk Management 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 Dimensions needs to make to build a sustainable competitive advantage.
