High Wire Act: Credit Suisse and Contingent Capital (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of High Wire Act: Credit Suisse and Contingent Capital (A)
Late in 2010, Credit Suisse CEO Brady Dougan and his team closed in on the decision of whether or not to issue contingent capital, which Swiss regulators would require by 2019. There were a number of substantial issues facing Dougan and his team, including whether contingent capital would provide sufficient loss absorption when called upon, would there be sufficient demand for this new instrument, would it be cost effective capital, and what were the risks to Credit Suisse' reputation with clients and regulators if an issue did not go well? In addition, The Basel Committee, the body that recommended global bank capital standards, had decided that much of the existing bank "hybrid debt" would no longer count as capital for regulatory purposes, meaning banks would need to replace this portion of their equity accounts with some other form of capital. However, Basel had yet to decide whether contingent capital would be allowable in the new "Basel III" regulatory regime.
Swot Analysis of "High Wire Act: Credit Suisse and Contingent Capital (A)" written by Clayton Rose, Aldo Sesia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Contingent Suisse facing as an external strategic factors. Some of the topics covered in High Wire Act: Credit Suisse and Contingent Capital (A) case study are - Strategic Management Strategies, Competitive strategy, Decision making, Financial markets, Leadership, Recession, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the High Wire Act: Credit Suisse and Contingent Capital (A) casestudy better are - – increasing energy prices, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, technology disruption,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of High Wire Act: Credit Suisse and Contingent Capital (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in High Wire Act: Credit Suisse and Contingent Capital (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Contingent Suisse, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Contingent Suisse 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 High Wire Act: Credit Suisse and Contingent Capital (A) can be done for the following purposes –
1. Strategic planning using facts provided in High Wire Act: Credit Suisse and Contingent Capital (A) case study
2. Improving business portfolio management of Contingent Suisse
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Contingent Suisse
Strengths High Wire Act: Credit Suisse and Contingent Capital (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Contingent Suisse in High Wire Act: Credit Suisse and Contingent Capital (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Contingent Suisse 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 High Wire Act: Credit Suisse and Contingent Capital (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Contingent Suisse in the sector have low bargaining power. High Wire Act: Credit Suisse and Contingent Capital (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Contingent Suisse to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– High Wire Act: Credit Suisse and Contingent Capital (A) firm has clearly differentiated products in the market place. This has enabled Contingent Suisse to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Contingent Suisse to invest into research and development (R&D) and innovation.
Ability to lead change in Leadership & Managing People field
– Contingent Suisse 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 Contingent Suisse in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Contingent Suisse 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 Leadership & Managing People segment
- digital transformation varies from industry to industry. For Contingent Suisse digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Contingent Suisse 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 recruit top talent
– Contingent Suisse is one of the leading recruiters in the industry. Managers in the High Wire Act: Credit Suisse and Contingent Capital (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Contingent Suisse 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 Clayton Rose, Aldo Sesia 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.
Training and development
– Contingent Suisse has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in High Wire Act: Credit Suisse and Contingent Capital (A) 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.
High switching costs
– The high switching costs that Contingent Suisse 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.
Successful track record of launching new products
– Contingent Suisse has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Contingent Suisse 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.
Highly skilled collaborators
– Contingent Suisse 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 High Wire Act: Credit Suisse and Contingent Capital (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses High Wire Act: Credit Suisse and Contingent Capital (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of High Wire Act: Credit Suisse and Contingent Capital (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Clayton Rose, Aldo Sesia suggests that, Contingent Suisse 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.
Lack of clear differentiation of Contingent Suisse products
– To increase the profitability and margins on the products, Contingent Suisse needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Contingent Suisse 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. Contingent Suisse 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.
Low market penetration in new markets
– Outside its home market of Contingent Suisse, firm in the HBR case study High Wire Act: Credit Suisse and Contingent Capital (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Contingent Suisse supply chain. Even after few cautionary changes mentioned in the HBR case study - High Wire Act: Credit Suisse and Contingent Capital (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Contingent Suisse vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Contingent Suisse 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study High Wire Act: Credit Suisse and Contingent Capital (A), is just above the industry average. Contingent Suisse 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.
No frontier risks strategy
– After analyzing the HBR case study High Wire Act: Credit Suisse and Contingent Capital (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Increasing silos among functional specialists
– The organizational structure of Contingent Suisse is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Contingent Suisse needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Contingent Suisse to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study High Wire Act: Credit Suisse and Contingent Capital (A) 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 Contingent Suisse 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study High Wire Act: Credit Suisse and Contingent Capital (A), in the dynamic environment Contingent Suisse has struggled to respond to the nimble upstart competition. Contingent Suisse has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities High Wire Act: Credit Suisse and Contingent Capital (A) | 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 High Wire Act: Credit Suisse and Contingent Capital (A) are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Contingent Suisse 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. Contingent Suisse 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Contingent Suisse in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Loyalty marketing
– Contingent Suisse 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Contingent Suisse 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 Contingent Suisse to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Contingent Suisse 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.
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 Contingent Suisse in the consumer business. Now Contingent Suisse can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Contingent Suisse can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Contingent Suisse 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 Leadership & Managing People segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Contingent Suisse can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Contingent Suisse is facing challenges because of the dominance of functional experts in the organization. High Wire Act: Credit Suisse and Contingent Capital (A) 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.
Creating value in data economy
– The success of analytics program of Contingent Suisse has opened avenues for new revenue streams for the organization in the industry. This can help Contingent Suisse to build a more holistic ecosystem as suggested in the High Wire Act: Credit Suisse and Contingent Capital (A) case study. Contingent Suisse can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Contingent Suisse 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.
Developing new processes and practices
– Contingent Suisse can develop new processes and procedures in Leadership & Managing People 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.
Threats High Wire Act: Credit Suisse and Contingent Capital (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study High Wire Act: Credit Suisse and Contingent Capital (A) are -
Consumer confidence and its impact on Contingent Suisse 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.
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. Contingent Suisse 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study High Wire Act: Credit Suisse and Contingent Capital (A), Contingent Suisse may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Contingent Suisse 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 High Wire Act: Credit Suisse and Contingent Capital (A) .
Stagnating economy with rate increase
– Contingent Suisse 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
– Contingent Suisse 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 Leadership & Managing People industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Contingent Suisse business can come under increasing regulations regarding data privacy, data security, etc.
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 Contingent Suisse.
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.
Shortening product life cycle
– it is one of the major threat that Contingent Suisse is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Contingent Suisse needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Contingent Suisse 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. Contingent Suisse can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Weighted SWOT Analysis of High Wire Act: Credit Suisse and Contingent Capital (A) 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 High Wire Act: Credit Suisse and Contingent Capital (A) 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 High Wire Act: Credit Suisse and Contingent Capital (A) 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 High Wire Act: Credit Suisse and Contingent Capital (A) 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 High Wire Act: Credit Suisse and Contingent Capital (A) 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 Contingent Suisse needs to make to build a sustainable competitive advantage.