Black-Scholes Option Pricing Program for the HP 12C Calculator SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Black-Scholes Option Pricing Program for the HP 12C Calculator
Contains a program that can be used on the HP12C pocket calculator to compute the Black-Scholes option price and the associated hedge ratio. The program must be given the following parameters: the exercise price, the risk-free rate, the time to expiration, and the price and volatility of the underlying stock.
Swot Analysis of "Black-Scholes Option Pricing Program for the HP 12C Calculator" written by Andre F. Perold includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Calculator Scholes facing as an external strategic factors. Some of the topics covered in Black-Scholes Option Pricing Program for the HP 12C Calculator case study are - Strategic Management Strategies, Compensation, Financial analysis, Financial management, Financial markets, Pricing, Technology and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Black-Scholes Option Pricing Program for the HP 12C Calculator casestudy better are - – increasing energy prices, wage bills are increasing, supply chains are disrupted by pandemic , there is backlash against globalization, increasing commodity prices, technology disruption, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Black-Scholes Option Pricing Program for the HP 12C Calculator
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Black-Scholes Option Pricing Program for the HP 12C Calculator case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Calculator Scholes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Calculator Scholes 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 Black-Scholes Option Pricing Program for the HP 12C Calculator can be done for the following purposes –
1. Strategic planning using facts provided in Black-Scholes Option Pricing Program for the HP 12C Calculator case study
2. Improving business portfolio management of Calculator Scholes
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 Calculator Scholes
Strengths Black-Scholes Option Pricing Program for the HP 12C Calculator | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Calculator Scholes in Black-Scholes Option Pricing Program for the HP 12C Calculator Harvard Business Review case study are -
High brand equity
– Calculator Scholes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Calculator Scholes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Calculator Scholes has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Calculator Scholes 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 Calculator Scholes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Black-Scholes Option Pricing Program for the HP 12C Calculator Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Finance & Accounting industry
– Black-Scholes Option Pricing Program for the HP 12C Calculator firm has clearly differentiated products in the market place. This has enabled Calculator Scholes to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Calculator Scholes to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Calculator Scholes is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Calculator Scholes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Calculator Scholes 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 Andre F. Perold 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.
Cross disciplinary teams
– Horizontal connected teams at the Calculator Scholes 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.
Ability to recruit top talent
– Calculator Scholes is one of the leading recruiters in the industry. Managers in the Black-Scholes Option Pricing Program for the HP 12C Calculator are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Calculator Scholes
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Calculator Scholes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Calculator Scholes in the sector have low bargaining power. Black-Scholes Option Pricing Program for the HP 12C Calculator has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Calculator Scholes to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Calculator Scholes 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 Black-Scholes Option Pricing Program for the HP 12C Calculator | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Black-Scholes Option Pricing Program for the HP 12C Calculator are -
High cash cycle compare to competitors
Calculator Scholes has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Black-Scholes Option Pricing Program for the HP 12C Calculator HBR case study mentions - Calculator Scholes 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.
Interest costs
– Compare to the competition, Calculator Scholes 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.
Slow decision making process
– As mentioned earlier in the report, Calculator Scholes 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. Calculator Scholes 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.
Need for greater diversity
– Calculator Scholes 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Black-Scholes Option Pricing Program for the HP 12C Calculator, in the dynamic environment Calculator Scholes has struggled to respond to the nimble upstart competition. Calculator Scholes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Calculator Scholes has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Andre F. Perold suggests that, Calculator Scholes 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.
Low market penetration in new markets
– Outside its home market of Calculator Scholes, firm in the HBR case study Black-Scholes Option Pricing Program for the HP 12C Calculator needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Calculator Scholes products
– To increase the profitability and margins on the products, Calculator Scholes 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 Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Calculator Scholes 's lucrative customers.
Opportunities Black-Scholes Option Pricing Program for the HP 12C Calculator | 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 Black-Scholes Option Pricing Program for the HP 12C Calculator are -
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. Calculator Scholes 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. Calculator Scholes 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Calculator Scholes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Calculator Scholes 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.
Creating value in data economy
– The success of analytics program of Calculator Scholes has opened avenues for new revenue streams for the organization in the industry. This can help Calculator Scholes to build a more holistic ecosystem as suggested in the Black-Scholes Option Pricing Program for the HP 12C Calculator case study. Calculator Scholes 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, Calculator Scholes 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, Black-Scholes Option Pricing Program for the HP 12C Calculator, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Calculator Scholes can use these opportunities to build new business models that can help the communities that Calculator Scholes operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Calculator Scholes 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Calculator Scholes 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Calculator Scholes 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 Calculator Scholes to hire the very best people irrespective of their geographical location.
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. Calculator Scholes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Calculator Scholes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Calculator Scholes 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.
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 Calculator Scholes in the consumer business. Now Calculator Scholes can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Black-Scholes Option Pricing Program for the HP 12C Calculator External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Black-Scholes Option Pricing Program for the HP 12C Calculator are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Calculator Scholes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Calculator Scholes needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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. Calculator Scholes 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 dependence on third party suppliers
– Calculator Scholes 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.
Regulatory challenges
– Calculator Scholes 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.
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 Calculator Scholes.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Calculator Scholes 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.
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 Calculator Scholes in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Calculator Scholes 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.
Technology acceleration in Forth Industrial Revolution
– Calculator Scholes has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Calculator Scholes 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.
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 Black-Scholes Option Pricing Program for the HP 12C Calculator, Calculator Scholes 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 .
Weighted SWOT Analysis of Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Black-Scholes Option Pricing Program for the HP 12C Calculator 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 Calculator Scholes needs to make to build a sustainable competitive advantage.
