Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings
Describes Standard & Poor's sovereign credit ratings business. Provides background on the history of credit ratings agencies, the meaning of credit ratings, the expansion of the sovereign ratings business over recent decades, and the market for credit ratings. Also, discusses current debates in the United States and elsewhere relating to the use of credit ratings in financial and prudential regulation.
Swot Analysis of "Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings" written by Rawi Abdelal, Christopher M. Bruner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ratings Credit facing as an external strategic factors. Some of the topics covered in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings case study are - Strategic Management Strategies, Financial markets, Global strategy, Policy, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings casestudy better are - – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices,
geopolitical disruptions, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ratings Credit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ratings Credit 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings can be done for the following purposes –
1. Strategic planning using facts provided in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings case study
2. Improving business portfolio management of Ratings Credit
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ratings Credit
Strengths Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ratings Credit in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings Harvard Business Review case study are -
Diverse revenue streams
– Ratings Credit is present in almost all the verticals within the industry. This has provided firm in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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.
Operational resilience
– The operational resilience strategy in the Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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.
Learning organization
- Ratings Credit 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 Ratings Credit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Ratings Credit in the sector have low bargaining power. Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ratings Credit to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Global Business industry
– Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings firm has clearly differentiated products in the market place. This has enabled Ratings Credit to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ratings Credit to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Ratings Credit 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Ratings Credit 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 Rawi Abdelal, Christopher M. Bruner 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.
Effective Research and Development (R&D)
– Ratings Credit 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Ratings Credit is one of the most innovative firm in sector. Manager in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Ratings Credit
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ratings Credit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ratings Credit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ratings Credit 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.
Training and development
– Ratings Credit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings are -
Low market penetration in new markets
– Outside its home market of Ratings Credit, firm in the HBR case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Ratings Credit 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.
Capital Spending Reduction
– Even during the low interest decade, Ratings Credit 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rawi Abdelal, Christopher M. Bruner suggests that, Ratings Credit 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.
No frontier risks strategy
– After analyzing the HBR case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings can leverage the sales team experience to cultivate customer relationships as Ratings Credit 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, Ratings Credit is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Ratings Credit has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Ratings Credit 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings, in the dynamic environment Ratings Credit has struggled to respond to the nimble upstart competition. Ratings Credit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Ratings Credit supply chain. Even after few cautionary changes mentioned in the HBR case study - Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ratings Credit vulnerable to further global disruptions in South East Asia.
Opportunities Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings | 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings are -
Creating value in data economy
– The success of analytics program of Ratings Credit has opened avenues for new revenue streams for the organization in the industry. This can help Ratings Credit to build a more holistic ecosystem as suggested in the Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings case study. Ratings Credit can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Ratings Credit can use these opportunities to build new business models that can help the communities that Ratings Credit operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Ratings Credit 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ratings Credit 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
– Ratings Credit can develop new processes and procedures in Global Business 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 Ratings Credit in the consumer business. Now Ratings Credit can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Ratings Credit 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.
Loyalty marketing
– Ratings Credit 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.
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. Ratings Credit can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Ratings Credit can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ratings Credit in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ratings Credit 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.
Buying journey improvements
– Ratings Credit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ratings Credit 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, Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings are -
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. Ratings Credit needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ratings Credit.
Shortening product life cycle
– it is one of the major threat that Ratings Credit is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ratings Credit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings, Ratings Credit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Ratings Credit 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 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.
High dependence on third party suppliers
– Ratings Credit 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.
Stagnating economy with rate increase
– Ratings Credit 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.
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 Ratings Credit in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Ratings Credit has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ratings Credit needs to keep up with the evolution of technology in the Global Business 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.
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 Ratings Credit business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Private Capital and Public Policy: Standard & Poor's Sovereign Credit Ratings 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 Ratings Credit needs to make to build a sustainable competitive advantage.
