Thin Political Markets: The Soft Underbelly of Capitalism SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Thin Political Markets: The Soft Underbelly of Capitalism
"Thin political markets" are the processes through which some of the most complex and critical institutions of our capitalist system are determined-e.g., our accounting-standards infrastructure. In thin political markets, corporate managers are largely unopposed-because of their own expertise and the general public's low awareness of the issues. This enables managers to structure the "rules of the game" in self-serving ways. The result is a structural flaw in the determination of critical institutions of our capitalist system, which, if ignored, can undermine the legitimacy of the system. This article provides some ideas on how to fix the problem.
Swot Analysis of "Thin Political Markets: The Soft Underbelly of Capitalism" written by Karthik Ramanna includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thin Capitalist facing as an external strategic factors. Some of the topics covered in Thin Political Markets: The Soft Underbelly of Capitalism case study are - Strategic Management Strategies, Leadership, Sustainability and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Thin Political Markets: The Soft Underbelly of Capitalism casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is backlash against globalization, increasing transportation and logistics costs, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
technology disruption, wage bills are increasing, etc
Introduction to SWOT Analysis of Thin Political Markets: The Soft Underbelly of Capitalism
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Thin Political Markets: The Soft Underbelly of Capitalism case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thin Capitalist, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism can be done for the following purposes –
1. Strategic planning using facts provided in Thin Political Markets: The Soft Underbelly of Capitalism case study
2. Improving business portfolio management of Thin Capitalist
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 Thin Capitalist
Strengths Thin Political Markets: The Soft Underbelly of Capitalism | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thin Capitalist in Thin Political Markets: The Soft Underbelly of Capitalism Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Thin Political Markets: The Soft Underbelly of Capitalism firm has clearly differentiated products in the market place. This has enabled Thin Capitalist to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Thin Capitalist to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Thin Capitalist 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.
Learning organization
- Thin Capitalist 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 Thin Capitalist is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Thin Political Markets: The Soft Underbelly of Capitalism Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Thin Political Markets: The Soft Underbelly of Capitalism 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.
Organizational Resilience of Thin Capitalist
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Thin Capitalist does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Thin Capitalist digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Thin Capitalist 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.
Effective Research and Development (R&D)
– Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Thin Capitalist has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Thin Capitalist to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Thin Capitalist in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Thin Capitalist has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Thin Capitalist 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.
Training and development
– Thin Capitalist has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Thin Political Markets: The Soft Underbelly of Capitalism 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.
Weaknesses Thin Political Markets: The Soft Underbelly of Capitalism | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Thin Political Markets: The Soft Underbelly of Capitalism are -
Skills based hiring
– The stress on hiring functional specialists at Thin Capitalist 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Capitalist 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Political Markets: The Soft Underbelly of Capitalism can leverage the sales team experience to cultivate customer relationships as Thin Capitalist is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Thin Capitalist 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. Thin Capitalist 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Thin Political Markets: The Soft Underbelly of Capitalism, is just above the industry average. Thin Capitalist 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.
Low market penetration in new markets
– Outside its home market of Thin Capitalist, firm in the HBR case study Thin Political Markets: The Soft Underbelly of Capitalism needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Thin Capitalist is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Thin Political Markets: The Soft Underbelly of Capitalism can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Capitalist has relatively successful track record of launching new products.
Lack of clear differentiation of Thin Capitalist products
– To increase the profitability and margins on the products, Thin Capitalist needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Thin Capitalist 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 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 Thin Capitalist supply chain. Even after few cautionary changes mentioned in the HBR case study - Thin Political Markets: The Soft Underbelly of Capitalism, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thin Capitalist vulnerable to further global disruptions in South East Asia.
Opportunities Thin Political Markets: The Soft Underbelly of Capitalism | 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 Thin Political Markets: The Soft Underbelly of Capitalism are -
Using analytics as competitive advantage
– Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Thin Capitalist to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thin Capitalist is facing challenges because of the dominance of functional experts in the organization. Thin Political Markets: The Soft Underbelly of Capitalism 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, Thin Capitalist can use these opportunities to build new business models that can help the communities that Thin Capitalist operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Thin Capitalist 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thin Capitalist can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Thin Capitalist 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. Thin Capitalist 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.
Creating value in data economy
– The success of analytics program of Thin Capitalist has opened avenues for new revenue streams for the organization in the industry. This can help Thin Capitalist to build a more holistic ecosystem as suggested in the Thin Political Markets: The Soft Underbelly of Capitalism case study. Thin Capitalist 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 Thin Capitalist 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Thin Capitalist 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.
Better consumer reach
– The expansion of the 5G network will help Thin Capitalist to increase its market reach. Thin Capitalist 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.
Developing new processes and practices
– Thin Capitalist 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.
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. Thin Capitalist can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Thin Capitalist 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.
Threats Thin Political Markets: The Soft Underbelly of Capitalism External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Thin Political Markets: The Soft Underbelly of Capitalism are -
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.
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.
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 Thin Capitalist in the Finance & Accounting sector and impact the bottomline of the organization.
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 Thin Capitalist.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thin Capitalist 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism .
Increasing wage structure of Thin Capitalist
– 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 Thin Capitalist.
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. Thin Capitalist 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.
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. Thin Capitalist needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Thin Capitalist 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 Thin Political Markets: The Soft Underbelly of Capitalism, Thin Capitalist may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Thin Capitalist business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Thin Capitalist 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.
Weighted SWOT Analysis of Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Political Markets: The Soft Underbelly of Capitalism 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 Thin Capitalist needs to make to build a sustainable competitive advantage.
