The Great Recession, 2007-2010: Causes and Consequences SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Great Recession, 2007-2010: Causes and Consequences

"A recession in the U.S. economy began at the end of 2007. Concerns deepened as an epic financial crisis shattered business and consumer confidence. By the fall of 2008, the United States was in the midst of the worst recession since the 1930s, and major financial institutions were on the verge of bankruptcy. The financial crisis and recession spread around the world. Many saw a risk that the global financial system might collapse, perhaps precipitating a repetition of the lengthy economic devastation of the 1930s depression. Governments reacted by creating huge stimulus packages that greatly increased national deficits and debts, and by loosening monetary policies with interest rates close to zero and huge expansions of the money supply. In their efforts to save the financial system, governments also offered bail-out packages to banks, including loans, guarantees and equity. By the fall of 2009, the crisis had stabilized, and the appearance of ""green shoots"" gave promise of recovery. By 2010, it was possible to put the financial crisis in perspective, and to raise questions about the causes and consequences. Of particular concern was whether new regulations might be needed to prevent a recurrence, and whether some of the tighter regulations should be international in scope. A related concern was whether such regulations should be applied to non-bank financial institutions as well as banks. Governments were also trying to determine how to exit the unique fiscal and monetary positions that now seemed to put their economies at risk of ongoing deficits and future inflation."

Authors :: Danielle Cadieux, David W. Conklin

Topics :: Finance & Accounting

Tags :: International business, Regulation, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Great Recession, 2007-2010: Causes and Consequences" written by Danielle Cadieux, David W. Conklin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Recession 1930s facing as an external strategic factors. Some of the topics covered in The Great Recession, 2007-2010: Causes and Consequences case study are - Strategic Management Strategies, International business, Regulation, Social responsibility and Finance & Accounting.

Some of the macro environment factors that can be used to understand the The Great Recession, 2007-2010: Causes and Consequences casestudy better are - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is backlash against globalization, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of The Great Recession, 2007-2010: Causes and Consequences

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Great Recession, 2007-2010: Causes and Consequences case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Recession 1930s, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Recession 1930s 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of The Great Recession, 2007-2010: Causes and Consequences can be done for the following purposes –
1. Strategic planning using facts provided in The Great Recession, 2007-2010: Causes and Consequences case study
2. Improving business portfolio management of Recession 1930s
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Recession 1930s

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Strengths The Great Recession, 2007-2010: Causes and Consequences | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Recession 1930s in The Great Recession, 2007-2010: Causes and Consequences Harvard Business Review case study are -

Organizational Resilience of Recession 1930s

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Recession 1930s does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Cross disciplinary teams

– Horizontal connected teams at the Recession 1930s are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Low bargaining power of suppliers

– Suppliers of Recession 1930s in the sector have low bargaining power. The Great Recession, 2007-2010: Causes and Consequences has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Recession 1930s to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Recession 1930s is one of the leading recruiters in the industry. Managers in the The Great Recession, 2007-2010: Causes and Consequences are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Superior customer experience

– The customer experience strategy of Recession 1930s in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Recession 1930s is one of the most innovative firm in sector. Manager in The Great Recession, 2007-2010: Causes and Consequences Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Analytics focus

– Recession 1930s 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 Danielle Cadieux, David W. Conklin 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.

Diverse revenue streams

– Recession 1930s is present in almost all the verticals within the industry. This has provided firm in The Great Recession, 2007-2010: Causes and Consequences 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.

Operational resilience

– The operational resilience strategy in the The Great Recession, 2007-2010: Causes and Consequences 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.

Sustainable margins compare to other players in Finance & Accounting industry

– The Great Recession, 2007-2010: Causes and Consequences firm has clearly differentiated products in the market place. This has enabled Recession 1930s to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Recession 1930s to invest into research and development (R&D) and innovation.

Strong track record of project management

– Recession 1930s is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Ability to lead change in Finance & Accounting field

– Recession 1930s 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 Recession 1930s in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses The Great Recession, 2007-2010: Causes and Consequences | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Great Recession, 2007-2010: Causes and Consequences are -

Slow decision making process

– As mentioned earlier in the report, Recession 1930s 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. Recession 1930s 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.

High operating costs

– Compare to the competitors, firm in the HBR case study The Great Recession, 2007-2010: Causes and Consequences has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Recession 1930s 's lucrative customers.

Lack of clear differentiation of Recession 1930s products

– To increase the profitability and margins on the products, Recession 1930s needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As The Great Recession, 2007-2010: Causes and Consequences HBR case study mentions - Recession 1930s 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study The Great Recession, 2007-2010: Causes and Consequences, in the dynamic environment Recession 1930s has struggled to respond to the nimble upstart competition. Recession 1930s 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 Recession 1930s is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Recession 1930s needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Recession 1930s to focus more on services rather than just following the product oriented approach.

No frontier risks strategy

– After analyzing the HBR case study The Great Recession, 2007-2010: Causes and Consequences, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.

Skills based hiring

– The stress on hiring functional specialists at Recession 1930s 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 The Great Recession, 2007-2010: Causes and Consequences, it seems that the employees of Recession 1930s 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 bargaining power of channel partners

– Because of the regulatory requirements, Danielle Cadieux, David W. Conklin suggests that, Recession 1930s 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.

Interest costs

– Compare to the competition, Recession 1930s 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.

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Opportunities The Great Recession, 2007-2010: Causes and Consequences | 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 Great Recession, 2007-2010: Causes and Consequences are -

Using analytics as competitive advantage

– Recession 1930s 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 The Great Recession, 2007-2010: Causes and Consequences - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Recession 1930s to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Recession 1930s 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 Finance & Accounting segment.

Manufacturing automation

– Recession 1930s can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Recession 1930s can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Recession 1930s 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Recession 1930s 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Recession 1930s 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 Recession 1930s to hire the very best people irrespective of their geographical location.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Recession 1930s can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Recession 1930s can use these opportunities to build new business models that can help the communities that Recession 1930s operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.

Loyalty marketing

– Recession 1930s 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Recession 1930s is facing challenges because of the dominance of functional experts in the organization. The Great Recession, 2007-2010: Causes and Consequences 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.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Recession 1930s 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. Recession 1930s 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.

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 Recession 1930s 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.

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Threats The Great Recession, 2007-2010: Causes and Consequences External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Great Recession, 2007-2010: Causes and Consequences are -

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 Recession 1930s in the Finance & Accounting sector and impact the bottomline of the organization.

Regulatory challenges

– Recession 1930s 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 Finance & Accounting industry regulations.

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. Recession 1930s 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Recession 1930s with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Great Recession, 2007-2010: Causes and Consequences, Recession 1930s may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .

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 Recession 1930s.

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.

Increasing wage structure of Recession 1930s

– 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 Recession 1930s.

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. Recession 1930s needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Recession 1930s has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Recession 1930s needs to keep up with the evolution of technology in the Finance & Accounting 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Recession 1930s in the Finance & Accounting industry. The Finance & Accounting 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.

Easy access to finance

– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Recession 1930s can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

High dependence on third party suppliers

– Recession 1930s 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.

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Weighted SWOT Analysis of The Great Recession, 2007-2010: Causes and Consequences 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 Great Recession, 2007-2010: Causes and Consequences 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 Great Recession, 2007-2010: Causes and Consequences 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 Great Recession, 2007-2010: Causes and Consequences 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 Great Recession, 2007-2010: Causes and Consequences 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 Recession 1930s needs to make to build a sustainable competitive advantage.

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