United States Financial Crisis of 1931 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
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 transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
there is backlash against globalization, central banks are concerned over increasing inflation, 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 -
Learning organization
- Fed's Behavior 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 Fed's Behavior is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in United States Financial Crisis of 1931 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Cross disciplinary teams
– Horizontal connected teams at the Fed's Behavior 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
– 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.
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.
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.
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.
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.
Highly skilled collaborators
– Fed's Behavior 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 United States Financial Crisis of 1931 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Global Business industry
– United States Financial Crisis of 1931 firm has clearly differentiated products in the market place. This has enabled Fed's Behavior to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Fed's Behavior to invest into research and development (R&D) and innovation.
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.
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.
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 -
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 Fed's Behavior supply chain. Even after few cautionary changes mentioned in the HBR case study - United States Financial Crisis of 1931, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fed's Behavior vulnerable to further global disruptions in South East Asia.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Fed's Behavior 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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Fed's Behavior 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. Fed's Behavior 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.
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.
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.
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.
Manufacturing automation
– Fed's Behavior 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fed's Behavior 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.
Buying journey improvements
– Fed's Behavior can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. United States Financial Crisis of 1931 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.
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.
Building a culture of innovation
– managers at Fed's Behavior 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 Global Business segment.
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fed's Behavior 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. Fed's Behavior 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.
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 -
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. Fed's Behavior 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.
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.
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.
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 Fed's Behavior business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.
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 .
Increasing wage structure of Fed's Behavior
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Fed's Behavior.
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.