History of Credit Agencies in the United States SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of History of Credit Agencies in the United States
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Provides a brief background on the history of credit agencies in the United States. Focuses on the mature process of data collection on an American consumer and how credit agencies share the information to determine proper credit risk and worthiness of a consumer. The American system as defined in this note can be contrasted against the lack of developed systems in burgeoning economies and help to better understand the capital markets of society.
Swot Analysis of "History of Credit Agencies in the United States" written by F. Warren McFarlan, Tracy Yuen Manty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Credit Agencies facing as an external strategic factors. Some of the topics covered in History of Credit Agencies in the United States case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the History of Credit Agencies in the United States casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, technology disruption, increasing energy prices, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of History of Credit Agencies in the United States
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in History of Credit Agencies in the United States case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Credit Agencies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Credit Agencies 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 History of Credit Agencies in the United States can be done for the following purposes –
1. Strategic planning using facts provided in History of Credit Agencies in the United States case study
2. Improving business portfolio management of Credit Agencies
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 Credit Agencies
Strengths History of Credit Agencies in the United States | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Credit Agencies in History of Credit Agencies in the United States Harvard Business Review case study are -
Successful track record of launching new products
– Credit Agencies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Credit Agencies 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.
Training and development
– Credit Agencies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in History of Credit Agencies in the United States 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.
Analytics focus
– Credit Agencies 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 F. Warren McFarlan, Tracy Yuen Manty 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.
Learning organization
- Credit Agencies 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 Credit Agencies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in History of Credit Agencies in the United States Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Credit Agencies 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.
High brand equity
– Credit Agencies has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Credit Agencies to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Credit Agencies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Credit Agencies 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.
Operational resilience
– The operational resilience strategy in the History of Credit Agencies in the United States 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.
Diverse revenue streams
– Credit Agencies is present in almost all the verticals within the industry. This has provided firm in History of Credit Agencies in the United States 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.
Ability to recruit top talent
– Credit Agencies is one of the leading recruiters in the industry. Managers in the History of Credit Agencies in the United States are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Credit Agencies is one of the most innovative firm in sector. Manager in History of Credit Agencies in the United States Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Global Business field
– Credit Agencies 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 Credit Agencies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses History of Credit Agencies in the United States | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of History of Credit Agencies in the United States are -
Workers concerns about automation
– As automation is fast increasing in the segment, Credit Agencies 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.
Low market penetration in new markets
– Outside its home market of Credit Agencies, firm in the HBR case study History of Credit Agencies in the United States needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study History of Credit Agencies in the United States, in the dynamic environment Credit Agencies has struggled to respond to the nimble upstart competition. Credit Agencies 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 Credit Agencies supply chain. Even after few cautionary changes mentioned in the HBR case study - History of Credit Agencies in the United States, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Credit Agencies vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study History of Credit Agencies in the United States, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the History of Credit Agencies in the United States 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 Credit Agencies has relatively successful track record of launching new products.
High cash cycle compare to competitors
Credit Agencies 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.
Aligning sales with marketing
– It come across in the case study History of Credit Agencies in the United States 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 History of Credit Agencies in the United States can leverage the sales team experience to cultivate customer relationships as Credit Agencies is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study History of Credit Agencies in the United States, it seems that the employees of Credit Agencies don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study History of Credit Agencies in the United States, is just above the industry average. Credit Agencies 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.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Tracy Yuen Manty suggests that, Credit Agencies 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.
Opportunities History of Credit Agencies in the United States | 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 History of Credit Agencies in the United States are -
Creating value in data economy
– The success of analytics program of Credit Agencies has opened avenues for new revenue streams for the organization in the industry. This can help Credit Agencies to build a more holistic ecosystem as suggested in the History of Credit Agencies in the United States case study. Credit Agencies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Credit Agencies 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, History of Credit Agencies in the United States, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Credit Agencies 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Credit Agencies 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Credit Agencies 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 Credit Agencies to hire the very best people irrespective of their geographical location.
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 Credit Agencies in the consumer business. Now Credit Agencies can target international markets with far fewer capital restrictions requirements than the existing system.
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 Credit Agencies 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Credit Agencies 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Credit Agencies is facing challenges because of the dominance of functional experts in the organization. History of Credit Agencies in the United States case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Credit Agencies 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 History of Credit Agencies in the United States - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Credit Agencies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Credit Agencies 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.
Buying journey improvements
– Credit Agencies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. History of Credit Agencies in the United States 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.
Learning at scale
– Online learning technologies has now opened space for Credit Agencies 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.
Threats History of Credit Agencies in the United States External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study History of Credit Agencies in the United States are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Credit Agencies 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 History of Credit Agencies in the United States .
Increasing wage structure of Credit Agencies
– 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 Credit Agencies.
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 Credit Agencies business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Credit Agencies 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.
Technology acceleration in Forth Industrial Revolution
– Credit Agencies has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Credit Agencies 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.
Consumer confidence and its impact on Credit Agencies 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.
Shortening product life cycle
– it is one of the major threat that Credit Agencies is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Credit Agencies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Credit Agencies 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.
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 Credit Agencies in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Credit Agencies 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.
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 Credit Agencies.
Weighted SWOT Analysis of History of Credit Agencies in the United States 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 History of Credit Agencies in the United States 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 History of Credit Agencies in the United States 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 History of Credit Agencies in the United States 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 History of Credit Agencies in the United States 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 Credit Agencies needs to make to build a sustainable competitive advantage.