United States Financial Crisis of 1931 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of United States Financial Crisis of 1931
The behavior of the Federal Reserve System during the early years of the Great Depression has been a topic of considerable controversy. The Fed, it has been argued, pursued a contracting policy, thereby helping to turn what might have been only a brief recession into an economic catastrophe. This case explores the reasons behind the Fed's behavior, showing students how existing institutional values may be inappropriate to novel situations.
Swot Analysis of "United States Financial Crisis of 1931" written by Michael G. Rukstad, Daniel A. Pope includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fed's Behavior facing as an external strategic factors. Some of the topics covered in United States Financial Crisis of 1931 case study are - Strategic Management Strategies, Government, Recession and Global Business.
Some of the macro environment factors that can be used to understand the United States Financial Crisis of 1931 casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, wage bills are increasing, increasing transportation and logistics costs, there is increasing trade war between United States & China, technology disruption,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of United States Financial Crisis of 1931
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in United States Financial Crisis of 1931 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fed's Behavior, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fed's Behavior 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 United States Financial Crisis of 1931 can be done for the following purposes –
1. Strategic planning using facts provided in United States Financial Crisis of 1931 case study
2. Improving business portfolio management of Fed's Behavior
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 Fed's Behavior
Strengths United States Financial Crisis of 1931 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fed's Behavior in United States Financial Crisis of 1931 Harvard Business Review case study are -
High switching costs
– The high switching costs that Fed's Behavior 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.
Successful track record of launching new products
– Fed's Behavior has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fed's Behavior 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.
Diverse revenue streams
– Fed's Behavior is present in almost all the verticals within the industry. This has provided firm in United States Financial Crisis of 1931 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.
Analytics focus
– Fed's Behavior 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 Michael G. Rukstad, Daniel A. Pope 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.
Strong track record of project management
– Fed's Behavior is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Fed's Behavior
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fed's Behavior does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Fed's Behavior 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 United States Financial Crisis of 1931 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the United States Financial Crisis of 1931 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.
Superior customer experience
– The customer experience strategy of Fed's Behavior in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Fed's Behavior is one of the leading recruiters in the industry. Managers in the United States Financial Crisis of 1931 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Fed's Behavior has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fed's Behavior to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Fed's Behavior is one of the most innovative firm in sector. Manager in United States Financial Crisis of 1931 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses United States Financial Crisis of 1931 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of United States Financial Crisis of 1931 are -
Low market penetration in new markets
– Outside its home market of Fed's Behavior, firm in the HBR case study United States Financial Crisis of 1931 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Fed's Behavior is dominated by functional specialists. It is not different from other players in the Global Business segment. Fed's Behavior needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fed's Behavior to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael G. Rukstad, Daniel A. Pope suggests that, Fed's Behavior 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.
Products dominated business model
– Even though Fed's Behavior has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - United States Financial Crisis of 1931 should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study United States Financial Crisis of 1931, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study United States Financial Crisis of 1931, in the dynamic environment Fed's Behavior has struggled to respond to the nimble upstart competition. Fed's Behavior 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, Fed's Behavior 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 operating costs
– Compare to the competitors, firm in the HBR case study United States Financial Crisis of 1931 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 Fed's Behavior 's lucrative customers.
Need for greater diversity
– Fed's Behavior 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the United States Financial Crisis of 1931 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 Fed's Behavior has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Fed's Behavior 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.
Opportunities United States Financial Crisis of 1931 | 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 United States Financial Crisis of 1931 are -
Loyalty marketing
– Fed's Behavior 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fed's Behavior 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 Fed's Behavior to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fed's Behavior 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, United States Financial Crisis of 1931, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fed's Behavior can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Fed's Behavior can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Fed's Behavior 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.
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 Fed's Behavior 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.
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 Fed's Behavior in the consumer business. Now Fed's Behavior 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 Fed's Behavior 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fed's Behavior can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Fed's Behavior 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 United States Financial Crisis of 1931 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fed's Behavior to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Fed's Behavior has opened avenues for new revenue streams for the organization in the industry. This can help Fed's Behavior to build a more holistic ecosystem as suggested in the United States Financial Crisis of 1931 case study. Fed's Behavior can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Fed's Behavior to increase its market reach. Fed's Behavior 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.
Threats United States Financial Crisis of 1931 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study United States Financial Crisis of 1931 are -
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. Fed's Behavior 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.
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 Fed's Behavior.
Stagnating economy with rate increase
– Fed's Behavior 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.
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. Fed's Behavior needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Fed's Behavior 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.
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.
Regulatory challenges
– Fed's Behavior 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 Global Business industry regulations.
Environmental challenges
– Fed's Behavior needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fed's Behavior can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study United States Financial Crisis of 1931, Fed's Behavior 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 .
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 Fed's Behavior in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Fed's Behavior is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Fed's Behavior has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Fed's Behavior 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.
High dependence on third party suppliers
– Fed's Behavior 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.
Weighted SWOT Analysis of United States Financial Crisis of 1931 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 United States Financial Crisis of 1931 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 United States Financial Crisis of 1931 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 United States Financial Crisis of 1931 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 United States Financial Crisis of 1931 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 Fed's Behavior needs to make to build a sustainable competitive advantage.