Nephila Builds a Portfolio of Weather Risk Transfer Contracts SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Nephila Builds a Portfolio of Weather Risk Transfer Contracts
The weather team at Nephila Capital Ltd. (Nephila) was in the midst of the weather market's busy winter renewal period. The list of weather risk transfer contracts that needed to be analyzed and priced seemed to be growing by the minute, and one team member is devising a plan to price each deal on its own merits of risk/reward. The counterparty's bid would reflect the willingness of the contracting party to pay for a weather hedge, and none would pay more than the bid amount. Nephila wanted to meet the needs of each counterparty, but only if Nephila earned a requisite return on capital. If the bid amount were not high enough to be attractive to Nephila, the team would need to convey that news to the counterparties. Did these new deal opportunities offer something more to Nephila beyond their individual numbers?
Swot Analysis of "Nephila Builds a Portfolio of Weather Risk Transfer Contracts" written by Samuel E Bodily, D. Matthew Coleman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nephila Weather facing as an external strategic factors. Some of the topics covered in Nephila Builds a Portfolio of Weather Risk Transfer Contracts case study are - Strategic Management Strategies, Financial management, Financial markets, Negotiations, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Nephila Builds a Portfolio of Weather Risk Transfer Contracts casestudy better are - – increasing energy prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Nephila Builds a Portfolio of Weather Risk Transfer Contracts
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nephila Builds a Portfolio of Weather Risk Transfer Contracts case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nephila Weather, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nephila Weather 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts can be done for the following purposes –
1. Strategic planning using facts provided in Nephila Builds a Portfolio of Weather Risk Transfer Contracts case study
2. Improving business portfolio management of Nephila Weather
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 Nephila Weather
Strengths Nephila Builds a Portfolio of Weather Risk Transfer Contracts | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nephila Weather in Nephila Builds a Portfolio of Weather Risk Transfer Contracts Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Nephila Weather in the sector have low bargaining power. Nephila Builds a Portfolio of Weather Risk Transfer Contracts has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nephila Weather to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Nephila Weather is present in almost all the verticals within the industry. This has provided firm in Nephila Builds a Portfolio of Weather Risk Transfer Contracts case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Nephila Weather 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Nephila Weather is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Nephila Weather in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Nephila Weather is one of the leading recruiters in the industry. Managers in the Nephila Builds a Portfolio of Weather Risk Transfer Contracts are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Nephila Weather has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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.
Innovation driven organization
– Nephila Weather is one of the most innovative firm in sector. Manager in Nephila Builds a Portfolio of Weather Risk Transfer Contracts Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Nephila Weather digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nephila Weather 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.
Learning organization
- Nephila Weather 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 Nephila Weather is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nephila Builds a Portfolio of Weather Risk Transfer Contracts Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Nephila Weather 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts - 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
– Nephila Weather has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nephila Weather to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Nephila Builds a Portfolio of Weather Risk Transfer Contracts | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nephila Builds a Portfolio of Weather Risk Transfer Contracts are -
Need for greater diversity
– Nephila Weather has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Nephila Weather 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts, in the dynamic environment Nephila Weather has struggled to respond to the nimble upstart competition. Nephila Weather has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Nephila Weather 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 star products
– The top 2 products and services of the firm as mentioned in the Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Weather has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nephila Weather is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts, is just above the industry average. Nephila Weather 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.
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 Nephila Weather supply chain. Even after few cautionary changes mentioned in the HBR case study - Nephila Builds a Portfolio of Weather Risk Transfer Contracts, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nephila Weather vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts can leverage the sales team experience to cultivate customer relationships as Nephila Weather is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts, it seems that the employees of Nephila Weather 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.
Increasing silos among functional specialists
– The organizational structure of Nephila Weather is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Nephila Weather needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nephila Weather to focus more on services rather than just following the product oriented approach.
Opportunities Nephila Builds a Portfolio of Weather Risk Transfer Contracts | 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nephila Weather 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.
Loyalty marketing
– Nephila Weather 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.
Using analytics as competitive advantage
– Nephila Weather 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nephila Weather to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Nephila Weather 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.
Leveraging digital technologies
– Nephila Weather 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.
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 Nephila Weather in the consumer business. Now Nephila Weather can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Nephila Weather 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.
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 Nephila Weather 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.
Buying journey improvements
– Nephila Weather can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nephila Weather can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nephila Weather is facing challenges because of the dominance of functional experts in the organization. Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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.
Better consumer reach
– The expansion of the 5G network will help Nephila Weather to increase its market reach. Nephila Weather 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nephila Weather can use these opportunities to build new business models that can help the communities that Nephila Weather operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats Nephila Builds a Portfolio of Weather Risk Transfer Contracts External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts are -
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 Nephila Weather business can come under increasing regulations regarding data privacy, data security, etc.
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. Nephila Weather can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nephila Weather with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Stagnating economy with rate increase
– Nephila Weather 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nephila Builds a Portfolio of Weather Risk Transfer Contracts, Nephila Weather 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 Nephila Weather in the Finance & Accounting sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Nephila Weather is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Nephila Weather 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nephila Weather 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts .
Technology acceleration in Forth Industrial Revolution
– Nephila Weather has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Nephila Weather 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.
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. Nephila Weather 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.
Weighted SWOT Analysis of Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Builds a Portfolio of Weather Risk Transfer Contracts 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 Nephila Weather needs to make to build a sustainable competitive advantage.