Valuing Currency Management: TOM vs. U.S. Commerce Bank SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Valuing Currency Management: TOM vs. U.S. Commerce Bank
In 2009, Geert Rijkaard, the founder of a Dutch currency management firm whose investment models had made him one of the richest men in the world, sued a large U.S. bank for more than $300 million for breaking a joint-venture agreement. The judgment would depend largely on the answer to a single question: Was Rijkaard's firm truly capable of delivering the returns it had promised? Both sides offer detailed financial analyses supported by their own research. This case places students in the role of the court tribunal, and asks them to interpret the evidence and determine the appropriate ruling.
Swot Analysis of "Valuing Currency Management: TOM vs. U.S. Commerce Bank" written by Geert Bekaert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Currency Rijkaard facing as an external strategic factors. Some of the topics covered in Valuing Currency Management: TOM vs. U.S. Commerce Bank case study are - Strategic Management Strategies, Currency, Financial management, International business, Joint ventures and Global Business.
Some of the macro environment factors that can be used to understand the Valuing Currency Management: TOM vs. U.S. Commerce Bank casestudy better are - – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
wage bills are increasing, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Valuing Currency Management: TOM vs. U.S. Commerce Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Valuing Currency Management: TOM vs. U.S. Commerce Bank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Currency Rijkaard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Currency Rijkaard 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank can be done for the following purposes –
1. Strategic planning using facts provided in Valuing Currency Management: TOM vs. U.S. Commerce Bank case study
2. Improving business portfolio management of Currency Rijkaard
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 Currency Rijkaard
Strengths Valuing Currency Management: TOM vs. U.S. Commerce Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Currency Rijkaard in Valuing Currency Management: TOM vs. U.S. Commerce Bank Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Valuing Currency Management: TOM vs. U.S. Commerce Bank firm has clearly differentiated products in the market place. This has enabled Currency Rijkaard to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Currency Rijkaard to invest into research and development (R&D) and innovation.
Organizational Resilience of Currency Rijkaard
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Currency Rijkaard does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Currency Rijkaard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Currency Rijkaard 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Currency Rijkaard digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Currency Rijkaard 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank 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.
Low bargaining power of suppliers
– Suppliers of Currency Rijkaard in the sector have low bargaining power. Valuing Currency Management: TOM vs. U.S. Commerce Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Currency Rijkaard to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Currency Rijkaard is one of the leading recruiters in the industry. Managers in the Valuing Currency Management: TOM vs. U.S. Commerce Bank 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
– Currency Rijkaard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Currency Rijkaard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Currency Rijkaard 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 Currency Rijkaard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Valuing Currency Management: TOM vs. U.S. Commerce Bank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Currency Rijkaard in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Currency Rijkaard is present in almost all the verticals within the industry. This has provided firm in Valuing Currency Management: TOM vs. U.S. Commerce Bank 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.
Weaknesses Valuing Currency Management: TOM vs. U.S. Commerce Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Valuing Currency Management: TOM vs. U.S. Commerce Bank are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Valuing Currency Management: TOM vs. U.S. Commerce Bank, it seems that the employees of Currency Rijkaard 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.
High cash cycle compare to competitors
Currency Rijkaard 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 Currency Rijkaard has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Valuing Currency Management: TOM vs. U.S. Commerce Bank, in the dynamic environment Currency Rijkaard has struggled to respond to the nimble upstart competition. Currency Rijkaard has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Currency Rijkaard is dominated by functional specialists. It is not different from other players in the Global Business segment. Currency Rijkaard needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Currency Rijkaard to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Currency Rijkaard 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. Currency Rijkaard 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank, 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.
Low market penetration in new markets
– Outside its home market of Currency Rijkaard, firm in the HBR case study Valuing Currency Management: TOM vs. U.S. Commerce Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Currency Rijkaard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Valuing Currency Management: TOM vs. U.S. Commerce Bank can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Valuing Currency Management: TOM vs. U.S. Commerce Bank, is just above the industry average. Currency Rijkaard 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 to strategic competitive environment developments
– As Valuing Currency Management: TOM vs. U.S. Commerce Bank HBR case study mentions - Currency Rijkaard 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.
Opportunities Valuing Currency Management: TOM vs. U.S. Commerce Bank | 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Currency Rijkaard can use these opportunities to build new business models that can help the communities that Currency Rijkaard operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Currency Rijkaard 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 Currency Rijkaard 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 Currency Rijkaard to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Currency Rijkaard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Currency Rijkaard in the consumer business. Now Currency Rijkaard 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. Currency Rijkaard 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. Currency Rijkaard 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.
Better consumer reach
– The expansion of the 5G network will help Currency Rijkaard to increase its market reach. Currency Rijkaard 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Currency Rijkaard 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, Valuing Currency Management: TOM vs. U.S. Commerce Bank, 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
– Currency Rijkaard 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
– Currency Rijkaard 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.
Using analytics as competitive advantage
– Currency Rijkaard 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Currency Rijkaard to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Currency Rijkaard is facing challenges because of the dominance of functional experts in the organization. Valuing Currency Management: TOM vs. U.S. Commerce Bank 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.
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. Currency Rijkaard can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Valuing Currency Management: TOM vs. U.S. Commerce Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Valuing Currency Management: TOM vs. U.S. Commerce Bank are -
Environmental challenges
– Currency Rijkaard 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. Currency Rijkaard can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Currency Rijkaard 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.
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 Currency Rijkaard business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Currency Rijkaard high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Currency Rijkaard 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. Currency Rijkaard 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.
Shortening product life cycle
– it is one of the major threat that Currency Rijkaard is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Currency Rijkaard 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 acceleration in Forth Industrial Revolution
– Currency Rijkaard has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Currency Rijkaard 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.
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. Currency Rijkaard 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.
Increasing wage structure of Currency Rijkaard
– 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 Currency Rijkaard.
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 Currency Rijkaard in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Valuing Currency Management: TOM vs. U.S. Commerce Bank 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank 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 Valuing Currency Management: TOM vs. U.S. Commerce Bank 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 Currency Rijkaard needs to make to build a sustainable competitive advantage.
