The Market for Gold: SPDR Gold Shares and Beyond SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Market for Gold: SPDR Gold Shares and Beyond
This case is used in Darden's second-year elective, Financial Institutions and Capital Markets, and would work well in courses covering exchange-traded commodities funds. A teaching note for this case is pending publication. At the end of May 2012, Aram Shishmanian, CEO of the World Gold Council (WGC) was considering alternatives to promote gold as an investment asset. The WGC was the sponsor for SPDR Gold Shares, which was launched in 2004 and had become the most successful commodity-based exchange-traded fund, reaching a market value of around $64 billion. This had exceeded expectations, but allocations to gold remained small among U.S. long-term institutional investors. There would also an expected shift of wealth to countries such as China and India in the coming decade. Shishmanian was considering which gold investment vehicles would be best for the WGC to promote in the United States and other markets going forward.
Swot Analysis of "The Market for Gold: SPDR Gold Shares and Beyond" written by Yiorgos Allayannis, Pedro Matos includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gold Wgc facing as an external strategic factors. Some of the topics covered in The Market for Gold: SPDR Gold Shares and Beyond case study are - Strategic Management Strategies, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Market for Gold: SPDR Gold Shares and Beyond casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, technology disruption, cloud computing is disrupting traditional business models,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of The Market for Gold: SPDR Gold Shares and Beyond
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Market for Gold: SPDR Gold Shares and Beyond case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gold Wgc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gold Wgc 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 Market for Gold: SPDR Gold Shares and Beyond can be done for the following purposes –
1. Strategic planning using facts provided in The Market for Gold: SPDR Gold Shares and Beyond case study
2. Improving business portfolio management of Gold Wgc
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 Gold Wgc
Strengths The Market for Gold: SPDR Gold Shares and Beyond | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gold Wgc in The Market for Gold: SPDR Gold Shares and Beyond Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Gold Wgc 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Gold Wgc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gold Wgc 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.
Ability to lead change in Finance & Accounting field
– Gold Wgc 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 Gold Wgc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Gold Wgc is present in almost all the verticals within the industry. This has provided firm in The Market for Gold: SPDR Gold Shares and Beyond 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.
High switching costs
– The high switching costs that Gold Wgc 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.
Analytics focus
– Gold Wgc 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 Yiorgos Allayannis, Pedro Matos 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.
High brand equity
– Gold Wgc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gold Wgc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– The Market for Gold: SPDR Gold Shares and Beyond firm has clearly differentiated products in the market place. This has enabled Gold Wgc to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Gold Wgc to invest into research and development (R&D) and innovation.
Strong track record of project management
– Gold Wgc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Gold Wgc in the sector have low bargaining power. The Market for Gold: SPDR Gold Shares and Beyond has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gold Wgc to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Gold Wgc is one of the leading recruiters in the industry. Managers in the The Market for Gold: SPDR Gold Shares and Beyond are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Gold Wgc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gold Wgc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses The Market for Gold: SPDR Gold Shares and Beyond | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Market for Gold: SPDR Gold Shares and Beyond are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Market for Gold: SPDR Gold Shares and Beyond 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 Gold Wgc has relatively successful track record of launching new products.
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 Gold Wgc supply chain. Even after few cautionary changes mentioned in the HBR case study - The Market for Gold: SPDR Gold Shares and Beyond, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gold Wgc vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As The Market for Gold: SPDR Gold Shares and Beyond HBR case study mentions - Gold Wgc 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Market for Gold: SPDR Gold Shares and Beyond 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 Gold Wgc 's lucrative customers.
Products dominated business model
– Even though Gold Wgc 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 - The Market for Gold: SPDR Gold Shares and Beyond should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Gold Wgc 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.
Skills based hiring
– The stress on hiring functional specialists at Gold Wgc 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.
Lack of clear differentiation of Gold Wgc products
– To increase the profitability and margins on the products, Gold Wgc needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Gold Wgc 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Market for Gold: SPDR Gold Shares and Beyond, is just above the industry average. Gold Wgc 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.
Capital Spending Reduction
– Even during the low interest decade, Gold Wgc has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities The Market for Gold: SPDR Gold Shares and Beyond | 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 Market for Gold: SPDR Gold Shares and Beyond are -
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. Gold Wgc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Gold Wgc 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gold Wgc is facing challenges because of the dominance of functional experts in the organization. The Market for Gold: SPDR Gold Shares and Beyond 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.
Loyalty marketing
– Gold Wgc 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.
Leveraging digital technologies
– Gold Wgc 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gold Wgc can use these opportunities to build new business models that can help the communities that Gold Wgc operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Gold Wgc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gold Wgc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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. Gold Wgc 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. Gold Wgc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gold Wgc 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, Gold Wgc 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 Market for Gold: SPDR Gold Shares and Beyond, 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 Gold Wgc 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gold Wgc 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 Gold Wgc to hire the very best people irrespective of their geographical location.
Threats The Market for Gold: SPDR Gold Shares and Beyond External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Market for Gold: SPDR Gold Shares and Beyond 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 Gold Wgc in the Finance & Accounting sector and impact the bottomline of the organization.
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 Gold Wgc business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Gold Wgc 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. Gold Wgc can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Gold Wgc
– 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 Gold Wgc.
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.
Stagnating economy with rate increase
– Gold Wgc 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.
Consumer confidence and its impact on Gold Wgc 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.
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 Gold Wgc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gold Wgc 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 The Market for Gold: SPDR Gold Shares and Beyond .
High dependence on third party suppliers
– Gold Wgc 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.
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. Gold Wgc needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gold Wgc 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. Gold Wgc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of The Market for Gold: SPDR Gold Shares and Beyond 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 Market for Gold: SPDR Gold Shares and Beyond 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 Market for Gold: SPDR Gold Shares and Beyond 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 Market for Gold: SPDR Gold Shares and Beyond 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 Market for Gold: SPDR Gold Shares and Beyond 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 Gold Wgc needs to make to build a sustainable competitive advantage.
