The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation
In response to the potential collapse of large financial institutions in 2007, the U.S. government committed trillions of dollars to loans, asset purchases, guarantees, direct spending to provide fiscal stimulus, expansionary monetary policy, and bailouts of various private financial institutions. The bailouts were especially controversial because public money was used to protect private financial institutions and their wealthy executives while ordinary citizens received no such protection. One outcome of the government's response was the proposal to enact into law the Volcker rule, which prohibited banks from engaging in proprietary trading, or trading for their own-not their clients'-benefit. Proprietary trading was believed to generate up to 10 percent of total trading revenues, which would have exceeded $5.9 billion in 2010 for the six largest American banks alone. If the Volcker rule were to become law, government agencies, including the Federal Reserve, the Securities and Exchange Commission, the FDIC, and the Office of the Comptroller of the Currency, would write the detailed regulations that would implement the law. These agencies employed civil servants but were run by political appointees with technical backgrounds. After issuing a notice of proposed rulemaking the agencies would solicit comments from the public, which would help shape the regulations. Executives of large banks needed to decide how to respond to this potential change in their business environment.
Swot Analysis of "The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation" written by Dylan Minor, Nicola Persico includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bailouts Volcker facing as an external strategic factors. Some of the topics covered in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation case study are - Strategic Management Strategies, Policy, Recession and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation casestudy better are - – there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing commodity prices,
wage bills are increasing, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bailouts Volcker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bailouts Volcker 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation can be done for the following purposes –
1. Strategic planning using facts provided in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation case study
2. Improving business portfolio management of Bailouts Volcker
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bailouts Volcker
Strengths The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bailouts Volcker in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Bailouts Volcker in the sector have low bargaining power. The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bailouts Volcker to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Bailouts Volcker is one of the leading recruiters in the industry. Managers in the The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Bailouts Volcker digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bailouts Volcker 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.
Innovation driven organization
– Bailouts Volcker is one of the most innovative firm in sector. Manager in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Bailouts Volcker 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Bailouts Volcker has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bailouts Volcker 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
– Bailouts Volcker has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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.
Ability to lead change in Innovation & Entrepreneurship field
– Bailouts Volcker 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 Bailouts Volcker in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation firm has clearly differentiated products in the market place. This has enabled Bailouts Volcker to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Bailouts Volcker to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Bailouts Volcker 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation - 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
– Bailouts Volcker has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bailouts Volcker to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Bailouts Volcker is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation are -
Slow to strategic competitive environment developments
– As The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation HBR case study mentions - Bailouts Volcker 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.
Lack of clear differentiation of Bailouts Volcker products
– To increase the profitability and margins on the products, Bailouts Volcker needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation, is just above the industry average. Bailouts Volcker 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation, it seems that the employees of Bailouts Volcker 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, Bailouts Volcker is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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 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 Bailouts Volcker supply chain. Even after few cautionary changes mentioned in the HBR case study - The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bailouts Volcker vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Bailouts Volcker 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.
Interest costs
– Compare to the competition, Bailouts Volcker has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Bailouts Volcker 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bailouts Volcker 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.
Opportunities The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation | 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bailouts Volcker 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, The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Bailouts Volcker can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bailouts Volcker 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. Bailouts Volcker 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.
Building a culture of innovation
– managers at Bailouts Volcker can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Leveraging digital technologies
– Bailouts Volcker 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 Bailouts Volcker in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Buying journey improvements
– Bailouts Volcker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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.
Developing new processes and practices
– Bailouts Volcker can develop new processes and procedures in Innovation & Entrepreneurship 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.
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 Bailouts Volcker 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.
Creating value in data economy
– The success of analytics program of Bailouts Volcker has opened avenues for new revenue streams for the organization in the industry. This can help Bailouts Volcker to build a more holistic ecosystem as suggested in the The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation case study. Bailouts Volcker can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bailouts Volcker 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bailouts Volcker can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Bailouts Volcker to increase its market reach. Bailouts Volcker 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.
Threats The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation are -
Regulatory challenges
– Bailouts Volcker 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 Innovation & Entrepreneurship industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bailouts Volcker in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Technology acceleration in Forth Industrial Revolution
– Bailouts Volcker has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Bailouts Volcker needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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. Bailouts Volcker needs to understand the core reasons impacting the Innovation & Entrepreneurship 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 Bailouts Volcker with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Bailouts Volcker 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.
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. Bailouts Volcker 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
– Bailouts Volcker 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.
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 Bailouts Volcker business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Bailouts Volcker is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Bailouts Volcker in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Bailouts Volcker 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.
Weighted SWOT Analysis of The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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 The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation 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 Bailouts Volcker needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of The Volcker Rule: Financial Crisis, Bailouts, and the Need for Financial Regulation
