A recent MBA graduate is working as vice-president of equity sales for an investment bank in the Ukraine. The firm's managing director has requested a recommendation regarding whether they should start investing in Ukrainian equities on their own account or retain their practice of acting purely as an agent--buying and selling shares for clients without taking any ownership position.
Swot Analysis of "Gonchar Investment Bank" written by Paul W. Beamish, Jonathan Royce includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gonchar Ukrainian facing as an external strategic factors. Some of the topics covered in Gonchar Investment Bank case study are - Strategic Management Strategies, Emerging markets, Ethics, Financial analysis, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Gonchar Investment Bank casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Gonchar Investment Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gonchar Investment Bank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gonchar Ukrainian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gonchar Ukrainian 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 Gonchar Investment Bank can be done for the following purposes –
1. Strategic planning using facts provided in Gonchar Investment Bank case study
2. Improving business portfolio management of Gonchar Ukrainian
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 Gonchar Ukrainian
Strengths Gonchar Investment Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gonchar Ukrainian in Gonchar Investment Bank Harvard Business Review case study are -
Learning organization
- Gonchar Ukrainian is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Gonchar Ukrainian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gonchar Investment Bank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Gonchar Ukrainian is one of the leading recruiters in the industry. Managers in the Gonchar Investment Bank are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Gonchar Ukrainian in the sector have low bargaining power. Gonchar Investment Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gonchar Ukrainian to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Gonchar Ukrainian digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gonchar Ukrainian 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.
Operational resilience
– The operational resilience strategy in the Gonchar Investment Bank 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.
Organizational Resilience of Gonchar Ukrainian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gonchar Ukrainian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Gonchar Ukrainian is present in almost all the verticals within the industry. This has provided firm in Gonchar Investment Bank 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.
Analytics focus
– Gonchar Ukrainian 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 Paul W. Beamish, Jonathan Royce 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
– Gonchar Ukrainian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gonchar Investment Bank 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 brand equity
– Gonchar Ukrainian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gonchar Ukrainian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Gonchar Ukrainian 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 Gonchar Investment Bank 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
– Gonchar Ukrainian has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gonchar Ukrainian 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.
Weaknesses Gonchar Investment Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gonchar Investment Bank are -
Low market penetration in new markets
– Outside its home market of Gonchar Ukrainian, firm in the HBR case study Gonchar Investment Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Gonchar Ukrainian 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 - Gonchar Investment Bank should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Gonchar Ukrainian is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Gonchar Ukrainian needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gonchar Ukrainian to focus more on services rather than just following the product oriented approach.
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 Gonchar Ukrainian supply chain. Even after few cautionary changes mentioned in the HBR case study - Gonchar Investment Bank, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gonchar Ukrainian vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Gonchar Ukrainian 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Gonchar Investment Bank 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 Gonchar Ukrainian has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Gonchar Investment Bank that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Gonchar Investment Bank can leverage the sales team experience to cultivate customer relationships as Gonchar Ukrainian is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Gonchar Investment Bank, in the dynamic environment Gonchar Ukrainian has struggled to respond to the nimble upstart competition. Gonchar Ukrainian has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Gonchar Ukrainian 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.
Slow decision making process
– As mentioned earlier in the report, Gonchar Ukrainian 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. Gonchar Ukrainian 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.
Lack of clear differentiation of Gonchar Ukrainian products
– To increase the profitability and margins on the products, Gonchar Ukrainian needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Gonchar Investment Bank | 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 Gonchar Investment Bank are -
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. Gonchar Ukrainian 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. Gonchar Ukrainian 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.
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. Gonchar Ukrainian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gonchar Ukrainian 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gonchar Ukrainian can use these opportunities to build new business models that can help the communities that Gonchar Ukrainian operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Gonchar Ukrainian 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 Gonchar Ukrainian 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 Gonchar Ukrainian to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Gonchar Ukrainian 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gonchar Ukrainian 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, Gonchar Investment Bank, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Gonchar Ukrainian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gonchar Investment Bank 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.
Using analytics as competitive advantage
– Gonchar Ukrainian 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 Gonchar Investment Bank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gonchar Ukrainian to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Gonchar Ukrainian has opened avenues for new revenue streams for the organization in the industry. This can help Gonchar Ukrainian to build a more holistic ecosystem as suggested in the Gonchar Investment Bank case study. Gonchar Ukrainian can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Gonchar Ukrainian 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.
Developing new processes and practices
– Gonchar Ukrainian can develop new processes and procedures in Finance & Accounting 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 Gonchar Investment Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gonchar Investment Bank are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gonchar Investment Bank, Gonchar Ukrainian 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gonchar Ukrainian 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 Gonchar Investment Bank .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gonchar Ukrainian 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.
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. Gonchar Ukrainian 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.
High dependence on third party suppliers
– Gonchar Ukrainian 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.
Stagnating economy with rate increase
– Gonchar Ukrainian 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.
Shortening product life cycle
– it is one of the major threat that Gonchar Ukrainian is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Gonchar Ukrainian.
Increasing wage structure of Gonchar Ukrainian
– 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 Gonchar Ukrainian.
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 Gonchar Ukrainian business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Gonchar Ukrainian 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. Gonchar Ukrainian can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gonchar Ukrainian with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Gonchar Investment Bank 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 Gonchar Investment Bank 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 Gonchar Investment Bank 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 Gonchar Investment Bank 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 Gonchar Investment Bank 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 Gonchar Ukrainian needs to make to build a sustainable competitive advantage.