The Congressional Oversight Panel's Valuation of the TARP Warrants (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of The Congressional Oversight Panel's Valuation of the TARP Warrants (A)
The Congressional Oversight Panel wants to value the warrants issued to the government in connection with the TARP investments of 2008, in order to increase the transparency of options repurchases. The case describes the methodology used to value the warrants. Students have the opportunity to value warrants issued by 10 of the largest banks and to evaluate whether the Black-Scholes model can be used to value these very long-lived 10 options. Can be used to teach basic option valuation using Black-Scholes, but also raise dynamic hedging issues of interest to advanced students.
Swot Analysis of "The Congressional Oversight Panel's Valuation of the TARP Warrants (A)" written by Carliss Y. Baldwin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Warrants Tarp facing as an external strategic factors. Some of the topics covered in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) case study are - Strategic Management Strategies, Financial analysis, Financial management, Financial markets, Government, Recession and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Congressional Oversight Panel's Valuation of the TARP Warrants (A) casestudy better are - – technology disruption, cloud computing is disrupting traditional business models, increasing energy prices, increasing household debt because of falling income levels, wage bills are increasing, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of The Congressional Oversight Panel's Valuation of the TARP Warrants (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Warrants Tarp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Warrants Tarp 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 Congressional Oversight Panel's Valuation of the TARP Warrants (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) case study
2. Improving business portfolio management of Warrants Tarp
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 Warrants Tarp
Strengths The Congressional Oversight Panel's Valuation of the TARP Warrants (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Warrants Tarp in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) Harvard Business Review case study are -
High switching costs
– The high switching costs that Warrants Tarp 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Congressional Oversight Panel's Valuation of the TARP Warrants (A) firm has clearly differentiated products in the market place. This has enabled Warrants Tarp to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Warrants Tarp to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Warrants Tarp is one of the leading recruiters in the industry. Managers in the The Congressional Oversight Panel's Valuation of the TARP Warrants (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.
Superior customer experience
– The customer experience strategy of Warrants Tarp in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Warrants Tarp 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 Warrants Tarp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Warrants Tarp 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.
Ability to lead change in Finance & Accounting field
– Warrants Tarp 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 Warrants Tarp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Warrants Tarp is present in almost all the verticals within the industry. This has provided firm in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) 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.
Organizational Resilience of Warrants Tarp
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Warrants Tarp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Warrants Tarp is one of the most innovative firm in sector. Manager in The Congressional Oversight Panel's Valuation of the TARP Warrants (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the The Congressional Oversight Panel's Valuation of the TARP Warrants (A) 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.
Effective Research and Development (R&D)
– Warrants Tarp 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 The Congressional Oversight Panel's Valuation of the TARP Warrants (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.
Weaknesses The Congressional Oversight Panel's Valuation of the TARP Warrants (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Congressional Oversight Panel's Valuation of the TARP Warrants (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Congressional Oversight Panel's Valuation of the TARP Warrants (A), it seems that the employees of Warrants Tarp 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.
Slow to strategic competitive environment developments
– As The Congressional Oversight Panel's Valuation of the TARP Warrants (A) HBR case study mentions - Warrants Tarp 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.
Increasing silos among functional specialists
– The organizational structure of Warrants Tarp is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Warrants Tarp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Warrants Tarp to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Warrants Tarp products
– To increase the profitability and margins on the products, Warrants Tarp needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Warrants Tarp is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Congressional Oversight Panel's Valuation of the TARP Warrants (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Warrants Tarp 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.
High cash cycle compare to competitors
Warrants Tarp has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Warrants Tarp 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 The Congressional Oversight Panel's Valuation of the TARP Warrants (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study The Congressional Oversight Panel's Valuation of the TARP Warrants (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 Warrants Tarp 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Warrants Tarp 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.
Opportunities The Congressional Oversight Panel's Valuation of the TARP Warrants (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 The Congressional Oversight Panel's Valuation of the TARP Warrants (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Warrants Tarp 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. Warrants Tarp 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. Warrants Tarp 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Warrants Tarp can use these opportunities to build new business models that can help the communities that Warrants Tarp operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Warrants Tarp 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Warrants Tarp 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 Warrants Tarp to hire the very best people irrespective of their geographical location.
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. Warrants Tarp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Warrants Tarp 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 Congressional Oversight Panel's Valuation of the TARP Warrants (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Warrants Tarp to increase its market reach. Warrants Tarp 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.
Using analytics as competitive advantage
– Warrants Tarp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study The Congressional Oversight Panel's Valuation of the TARP Warrants (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Warrants Tarp 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 Warrants Tarp has opened avenues for new revenue streams for the organization in the industry. This can help Warrants Tarp to build a more holistic ecosystem as suggested in the The Congressional Oversight Panel's Valuation of the TARP Warrants (A) case study. Warrants Tarp can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Warrants Tarp can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Warrants Tarp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Warrants Tarp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats The Congressional Oversight Panel's Valuation of the TARP Warrants (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Congressional Oversight Panel's Valuation of the TARP Warrants (A) are -
Regulatory challenges
– Warrants Tarp needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
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.
Environmental challenges
– Warrants Tarp 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. Warrants Tarp can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Warrants Tarp
– 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 Warrants Tarp.
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 Warrants Tarp.
Consumer confidence and its impact on Warrants Tarp 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.
High dependence on third party suppliers
– Warrants Tarp 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.
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 Warrants Tarp in the Finance & Accounting sector and impact the bottomline of the organization.
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. Warrants Tarp needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Warrants Tarp 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 Congressional Oversight Panel's Valuation of the TARP Warrants (A) .
Technology acceleration in Forth Industrial Revolution
– Warrants Tarp has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Warrants Tarp needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Warrants Tarp 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.
Weighted SWOT Analysis of The Congressional Oversight Panel's Valuation of the TARP Warrants (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 The Congressional Oversight Panel's Valuation of the TARP Warrants (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 The Congressional Oversight Panel's Valuation of the TARP Warrants (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 The Congressional Oversight Panel's Valuation of the TARP Warrants (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 The Congressional Oversight Panel's Valuation of the TARP Warrants (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 Warrants Tarp needs to make to build a sustainable competitive advantage.