FX Strategies in 2006: U.S. Dollar versus Yen SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of FX Strategies in 2006: U.S. Dollar versus Yen
This is a Darden case study.Riding the early morning Metro North train from Grand Central to Greenwich on April Fool's Day 2006, Luke Anthony briefly pondered the revitalization of some of the once grand Harlem neighborhoods. But then his thoughts turned back to the task at hand: to form a cohesive view of the likely path of the Japanese yen. Was the dollar on one of its patented upward swings that would bring it to 140 A¥/$ before long? Or is the past year's dollar appreciation just a brief pause in a longer-term downward march as the record current account deficit drags it to the depths?
Swot Analysis of "FX Strategies in 2006: U.S. Dollar versus Yen" written by Francis Warnock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dollar Yen facing as an external strategic factors. Some of the topics covered in FX Strategies in 2006: U.S. Dollar versus Yen case study are - Strategic Management Strategies, Financial management, Financial markets, International business and Global Business.
Some of the macro environment factors that can be used to understand the FX Strategies in 2006: U.S. Dollar versus Yen casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing energy prices, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of FX Strategies in 2006: U.S. Dollar versus Yen
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in FX Strategies in 2006: U.S. Dollar versus Yen case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dollar Yen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dollar Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen can be done for the following purposes –
1. Strategic planning using facts provided in FX Strategies in 2006: U.S. Dollar versus Yen case study
2. Improving business portfolio management of Dollar Yen
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 Dollar Yen
Strengths FX Strategies in 2006: U.S. Dollar versus Yen | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dollar Yen in FX Strategies in 2006: U.S. Dollar versus Yen Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Dollar Yen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Dollar Yen is one of the leading recruiters in the industry. Managers in the FX Strategies in 2006: U.S. Dollar versus Yen 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 switching costs
– The high switching costs that Dollar Yen 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.
Highly skilled collaborators
– Dollar Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Dollar Yen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Dollar Yen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dollar Yen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Dollar Yen is present in almost all the verticals within the industry. This has provided firm in FX Strategies in 2006: U.S. Dollar versus Yen 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.
Learning organization
- Dollar Yen 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 Dollar Yen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in FX Strategies in 2006: U.S. Dollar versus Yen Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Dollar Yen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in FX Strategies in 2006: U.S. Dollar versus Yen 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.
Operational resilience
– The operational resilience strategy in the FX Strategies in 2006: U.S. Dollar versus Yen 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 Dollar Yen in the sector have low bargaining power. FX Strategies in 2006: U.S. Dollar versus Yen has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dollar Yen to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Dollar Yen 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 Dollar Yen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses FX Strategies in 2006: U.S. Dollar versus Yen | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FX Strategies in 2006: U.S. Dollar versus Yen are -
Aligning sales with marketing
– It come across in the case study FX Strategies in 2006: U.S. Dollar versus Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen can leverage the sales team experience to cultivate customer relationships as Dollar Yen is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Dollar Yen 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study FX Strategies in 2006: U.S. Dollar versus Yen, it seems that the employees of Dollar Yen 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dollar Yen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study FX Strategies in 2006: U.S. Dollar versus Yen can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study FX Strategies in 2006: U.S. Dollar versus Yen, in the dynamic environment Dollar Yen has struggled to respond to the nimble upstart competition. Dollar Yen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the FX Strategies in 2006: U.S. Dollar versus Yen 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 Dollar Yen has relatively successful track record of launching new products.
Need for greater diversity
– Dollar Yen 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.
Low market penetration in new markets
– Outside its home market of Dollar Yen, firm in the HBR case study FX Strategies in 2006: U.S. Dollar versus Yen needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Dollar Yen 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.
Slow to strategic competitive environment developments
– As FX Strategies in 2006: U.S. Dollar versus Yen HBR case study mentions - Dollar Yen 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.
Products dominated business model
– Even though Dollar Yen 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 - FX Strategies in 2006: U.S. Dollar versus Yen should strive to include more intangible value offerings along with its core products and services.
Opportunities FX Strategies in 2006: U.S. Dollar versus Yen | 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 FX Strategies in 2006: U.S. Dollar versus Yen are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Dollar Yen 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.
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. Dollar Yen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Dollar Yen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dollar Yen 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 Dollar Yen to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Dollar Yen 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.
Manufacturing automation
– Dollar Yen 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.
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 Dollar Yen 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.
Better consumer reach
– The expansion of the 5G network will help Dollar Yen to increase its market reach. Dollar Yen 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.
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 Dollar Yen in the consumer business. Now Dollar Yen can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dollar Yen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dollar Yen 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, FX Strategies in 2006: U.S. Dollar versus Yen, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Dollar Yen 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.
Using analytics as competitive advantage
– Dollar Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dollar Yen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats FX Strategies in 2006: U.S. Dollar versus Yen External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study FX Strategies in 2006: U.S. Dollar versus Yen are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Dollar Yen 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.
Stagnating economy with rate increase
– Dollar Yen 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.
Regulatory challenges
– Dollar Yen 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.
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. Dollar Yen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dollar Yen 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.
High dependence on third party suppliers
– Dollar Yen 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.
Technology acceleration in Forth Industrial Revolution
– Dollar Yen has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Dollar Yen needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High 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. Dollar Yen needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dollar Yen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dollar Yen.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dollar Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen .
Shortening product life cycle
– it is one of the major threat that Dollar Yen is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Dollar Yen
– 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 Dollar Yen.
Weighted SWOT Analysis of FX Strategies in 2006: U.S. Dollar versus Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen 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 FX Strategies in 2006: U.S. Dollar versus Yen 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 Dollar Yen needs to make to build a sustainable competitive advantage.