U.S. Banking Panic of 1933 and Federal Deposit Insurance SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of U.S. Banking Panic of 1933 and Federal Deposit Insurance
After highlighting some key developments in the banking history of the United States, the case illustrates the Banking Panic of 1933 and the way in which Franklin D. Roosevelt dealt with it at the beginning of his presidency. Describes the main components of banking reform bills that members of Congress proposed in April 1933. Deposit insurance figured prominently in these bills, and the case summarizes the contemporary debate surrounding this proposed insurance.
Swot Analysis of "U.S. Banking Panic of 1933 and Federal Deposit Insurance" written by Julio J. Rotemberg, Sabina Ciminero includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that 1933 Banking facing as an external strategic factors. Some of the topics covered in U.S. Banking Panic of 1933 and Federal Deposit Insurance case study are - Strategic Management Strategies, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the U.S. Banking Panic of 1933 and Federal Deposit Insurance casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of U.S. Banking Panic of 1933 and Federal Deposit Insurance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in U.S. Banking Panic of 1933 and Federal Deposit Insurance case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 1933 Banking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 1933 Banking 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance can be done for the following purposes –
1. Strategic planning using facts provided in U.S. Banking Panic of 1933 and Federal Deposit Insurance case study
2. Improving business portfolio management of 1933 Banking
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 1933 Banking
Strengths U.S. Banking Panic of 1933 and Federal Deposit Insurance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 1933 Banking in U.S. Banking Panic of 1933 and Federal Deposit Insurance Harvard Business Review case study are -
Strong track record of project management
– 1933 Banking is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– U.S. Banking Panic of 1933 and Federal Deposit Insurance firm has clearly differentiated products in the market place. This has enabled 1933 Banking to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped 1933 Banking to invest into research and development (R&D) and innovation.
Ability to lead change in Global Business field
– 1933 Banking 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 1933 Banking in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– 1933 Banking has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. 1933 Banking 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.
Organizational Resilience of 1933 Banking
– The covid-19 pandemic has put organizational resilience at the centre of everthing that 1933 Banking 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 1933 Banking 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.
Low bargaining power of suppliers
– Suppliers of 1933 Banking in the sector have low bargaining power. U.S. Banking Panic of 1933 and Federal Deposit Insurance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 1933 Banking to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of 1933 Banking in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- 1933 Banking 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 1933 Banking is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in U.S. Banking Panic of 1933 and Federal Deposit Insurance Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– 1933 Banking 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– 1933 Banking has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 1933 Banking to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– 1933 Banking is one of the most innovative firm in sector. Manager in U.S. Banking Panic of 1933 and Federal Deposit Insurance Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses U.S. Banking Panic of 1933 and Federal Deposit Insurance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of U.S. Banking Panic of 1933 and Federal Deposit Insurance are -
Slow to strategic competitive environment developments
– As U.S. Banking Panic of 1933 and Federal Deposit Insurance HBR case study mentions - 1933 Banking 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.
High cash cycle compare to competitors
1933 Banking 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.
Skills based hiring
– The stress on hiring functional specialists at 1933 Banking 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.
Increasing silos among functional specialists
– The organizational structure of 1933 Banking is dominated by functional specialists. It is not different from other players in the Global Business segment. 1933 Banking needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 1933 Banking to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though 1933 Banking 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 - U.S. Banking Panic of 1933 and Federal Deposit Insurance should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Julio J. Rotemberg, Sabina Ciminero suggests that, 1933 Banking 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study U.S. Banking Panic of 1933 and Federal Deposit Insurance, is just above the industry average. 1933 Banking needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, 1933 Banking 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. 1933 Banking 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.
Lack of clear differentiation of 1933 Banking products
– To increase the profitability and margins on the products, 1933 Banking needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 1933 Banking has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance can leverage the sales team experience to cultivate customer relationships as 1933 Banking is planning to shift buying processes online.
Opportunities U.S. Banking Panic of 1933 and Federal Deposit Insurance | 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance are -
Creating value in data economy
– The success of analytics program of 1933 Banking has opened avenues for new revenue streams for the organization in the industry. This can help 1933 Banking to build a more holistic ecosystem as suggested in the U.S. Banking Panic of 1933 and Federal Deposit Insurance case study. 1933 Banking can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– 1933 Banking 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance - to build a competitive advantage using analytics. The analytics driven competitive advantage can help 1933 Banking to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 1933 Banking 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, U.S. Banking Panic of 1933 and Federal Deposit Insurance, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 1933 Banking 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.
Developing new processes and practices
– 1933 Banking 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.
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. 1933 Banking 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. 1933 Banking 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.
Learning at scale
– Online learning technologies has now opened space for 1933 Banking 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.
Buying journey improvements
– 1933 Banking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. U.S. Banking Panic of 1933 and Federal Deposit Insurance 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.
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 1933 Banking in the consumer business. Now 1933 Banking can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 1933 Banking can use these opportunities to build new business models that can help the communities that 1933 Banking operates in. Secondly it can use opportunities from government spending in Global Business sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 1933 Banking 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 1933 Banking to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– 1933 Banking 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 1933 Banking 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.
Threats U.S. Banking Panic of 1933 and Federal Deposit Insurance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study U.S. Banking Panic of 1933 and Federal Deposit Insurance are -
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 1933 Banking.
Stagnating economy with rate increase
– 1933 Banking 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study U.S. Banking Panic of 1933 and Federal Deposit Insurance, 1933 Banking 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 1933 Banking 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.
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. 1933 Banking 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 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. 1933 Banking needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 1933 Banking business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– 1933 Banking has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, 1933 Banking 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.
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
– 1933 Banking 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.
Increasing wage structure of 1933 Banking
– 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 1933 Banking.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 1933 Banking in the Global Business industry. The Global Business 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 1933 Banking can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study U.S. Banking Panic of 1933 and Federal Deposit Insurance .
Weighted SWOT Analysis of U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 U.S. Banking Panic of 1933 and Federal Deposit Insurance 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 1933 Banking needs to make to build a sustainable competitive advantage.