Scandal at Societe Generale: Rogue Trader or Willing Accomplice? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Scandal at Societe Generale: Rogue Trader or Willing Accomplice?
This case covers the scandal that occurred in 2008 at SociA?tA? GA?nA?rale when one trader, JA?rA?me Kerviel, lost the prominent French bank nearly a??5 billion through his unauthorized trading. The case describes Kerviel's schemes as well as SocGen's internal monitoring and reporting processes, organizational structures, and culture so that students reading the case can identify and discuss the shortcomings of the firm's risk management practices. The case and epilogue also describe the French government's and Finance Minister Christine Lagarde's reactions to the scandal (e.g., imposition of a a??4 million fine and increased regulations), prompting students to consider the role of government in overseeing that healthy risk management practices are followed in key industries (such as banking) that are highly entwined with entire economies. Finally, the case encourages students-during class discussion-to critically consider whether it is truly possible for one rogue trader to act alone, which elements in a work environment enable or even encourage risky behavior, and who should be held accountable when such scandals occur. Interestingly, this case highlights a story that is not unique. Prior to Kerviel's transgressions were the similar scandals of Nick Leeson at Barings Bank and Toshihide Iguchi at Daiwa Bank, yet history has repeated itself. This case gives students a vivid example of the dangers of internal, self-inflicted risk on organizations, and it opens a discussion on how to avoid it.
Swot Analysis of "Scandal at Societe Generale: Rogue Trader or Willing Accomplice?" written by Russell Walker includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Trader Kerviel's facing as an external strategic factors. Some of the topics covered in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? case study are - Strategic Management Strategies, Decision making, Public relations, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Scandal at Societe Generale: Rogue Trader or Willing Accomplice? casestudy better are - – increasing energy prices, there is increasing trade war between United States & China, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Scandal at Societe Generale: Rogue Trader or Willing Accomplice?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Trader Kerviel's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Trader Kerviel's 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? can be done for the following purposes –
1. Strategic planning using facts provided in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? case study
2. Improving business portfolio management of Trader Kerviel's
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 Trader Kerviel's
Strengths Scandal at Societe Generale: Rogue Trader or Willing Accomplice? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Trader Kerviel's in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? Harvard Business Review case study are -
Analytics focus
– Trader Kerviel's 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 Russell Walker 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 switching costs
– The high switching costs that Trader Kerviel's 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.
Operational resilience
– The operational resilience strategy in the Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Trader Kerviel's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Trader Kerviel's 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.
Organizational Resilience of Trader Kerviel's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Trader Kerviel's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Trader Kerviel's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Trader Kerviel's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Trader Kerviel's 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.
Ability to recruit top talent
– Trader Kerviel's is one of the leading recruiters in the industry. Managers in the Scandal at Societe Generale: Rogue Trader or Willing Accomplice? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Trader Kerviel's 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.
Innovation driven organization
– Trader Kerviel's is one of the most innovative firm in sector. Manager in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Trader Kerviel's is present in almost all the verticals within the industry. This has provided firm in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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.
Learning organization
- Trader Kerviel's 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 Trader Kerviel's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Scandal at Societe Generale: Rogue Trader or Willing Accomplice? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Scandal at Societe Generale: Rogue Trader or Willing Accomplice? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Scandal at Societe Generale: Rogue Trader or Willing Accomplice? are -
Low market penetration in new markets
– Outside its home market of Trader Kerviel's, firm in the HBR case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Trader Kerviel's 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.
Slow decision making process
– As mentioned earlier in the report, Trader Kerviel's 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. Trader Kerviel's 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.
Products dominated business model
– Even though Trader Kerviel's 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 - Scandal at Societe Generale: Rogue Trader or Willing Accomplice? should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? can leverage the sales team experience to cultivate customer relationships as Trader Kerviel's 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice?, in the dynamic environment Trader Kerviel's has struggled to respond to the nimble upstart competition. Trader Kerviel's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice?, it seems that the employees of Trader Kerviel's 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.
Skills based hiring
– The stress on hiring functional specialists at Trader Kerviel's 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.
No frontier risks strategy
– After analyzing the HBR case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice?, 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.
Lack of clear differentiation of Trader Kerviel's products
– To increase the profitability and margins on the products, Trader Kerviel's needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Trader Kerviel's has relatively successful track record of launching new products.
Opportunities Scandal at Societe Generale: Rogue Trader or Willing Accomplice? | 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Trader Kerviel's is facing challenges because of the dominance of functional experts in the organization. Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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.
Developing new processes and practices
– Trader Kerviel's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Trader Kerviel's 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, Scandal at Societe Generale: Rogue Trader or Willing Accomplice?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Trader Kerviel's 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.
Leveraging digital technologies
– Trader Kerviel's 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.
Better consumer reach
– The expansion of the 5G network will help Trader Kerviel's to increase its market reach. Trader Kerviel's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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. Trader Kerviel's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Trader Kerviel's 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.
Creating value in data economy
– The success of analytics program of Trader Kerviel's has opened avenues for new revenue streams for the organization in the industry. This can help Trader Kerviel's to build a more holistic ecosystem as suggested in the Scandal at Societe Generale: Rogue Trader or Willing Accomplice? case study. Trader Kerviel's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Trader Kerviel's 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Trader Kerviel's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Trader Kerviel's 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.
Building a culture of innovation
– managers at Trader Kerviel's 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.
Buying journey improvements
– Trader Kerviel's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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.
Threats Scandal at Societe Generale: Rogue Trader or Willing Accomplice? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Trader Kerviel's 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? .
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 Trader Kerviel's.
High dependence on third party suppliers
– Trader Kerviel's 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.
Increasing wage structure of Trader Kerviel's
– 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 Trader Kerviel's.
Regulatory challenges
– Trader Kerviel's 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.
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. Trader Kerviel's needs to understand the core reasons impacting the Leadership & Managing People 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 Trader Kerviel's in the Leadership & Managing People industry. The Leadership & Managing People 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.
Shortening product life cycle
– it is one of the major threat that Trader Kerviel's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Trader Kerviel's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Trader Kerviel's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Scandal at Societe Generale: Rogue Trader or Willing Accomplice?, Trader Kerviel's 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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Trader Kerviel's 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Scandal at Societe Generale: Rogue Trader or Willing Accomplice? 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 Trader Kerviel's needs to make to build a sustainable competitive advantage.
