Innovation at the Treasury: Treasury Inflation-Protection Securities (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Innovation at the Treasury: Treasury Inflation-Protection Securities (B)
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.In 1997, the U.S. Treasury was deciding whether to proceed with a proposal to issue inflation-indexed bonds. This case explores the challenges facing innovation in the financial markets as the Treasury tries to determine whether to introduce Treasury Inflation-Protection Securities.
Authors :: Kenneth A. Froot, Peter Hecht, Christopher E.J. Payton
Swot Analysis of "Innovation at the Treasury: Treasury Inflation-Protection Securities (B)" written by Kenneth A. Froot, Peter Hecht, Christopher E.J. Payton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Treasury Inflation facing as an external strategic factors. Some of the topics covered in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) case study are - Strategic Management Strategies, Financial management, Financial markets, Government, Intellectual property, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Innovation at the Treasury: Treasury Inflation-Protection Securities (B) casestudy better are - – increasing transportation and logistics costs, increasing commodity prices, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Innovation at the Treasury: Treasury Inflation-Protection Securities (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Treasury Inflation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) can be done for the following purposes –
1. Strategic planning using facts provided in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) case study
2. Improving business portfolio management of Treasury Inflation
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 Treasury Inflation
Strengths Innovation at the Treasury: Treasury Inflation-Protection Securities (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Treasury Inflation in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) Harvard Business Review case study are -
Highly skilled collaborators
– Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– Treasury Inflation 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 Treasury Inflation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Innovation at the Treasury: Treasury Inflation-Protection Securities (B) firm has clearly differentiated products in the market place. This has enabled Treasury Inflation to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Treasury Inflation to invest into research and development (R&D) and innovation.
Learning organization
- Treasury Inflation 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 Treasury Inflation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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.
Diverse revenue streams
– Treasury Inflation is present in almost all the verticals within the industry. This has provided firm in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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.
Training and development
– Treasury Inflation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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.
Cross disciplinary teams
– Horizontal connected teams at the Treasury Inflation 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.
Low bargaining power of suppliers
– Suppliers of Treasury Inflation in the sector have low bargaining power. Innovation at the Treasury: Treasury Inflation-Protection Securities (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Treasury Inflation to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Treasury Inflation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Treasury Inflation 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.
Strong track record of project management
– Treasury Inflation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) - 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation at the Treasury: Treasury Inflation-Protection Securities (B) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth A. Froot, Peter Hecht, Christopher E.J. Payton suggests that, Treasury Inflation 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.
Slow to strategic competitive environment developments
– As Innovation at the Treasury: Treasury Inflation-Protection Securities (B) HBR case study mentions - Treasury Inflation 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.
Interest costs
– Compare to the competition, Treasury Inflation 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.
Low market penetration in new markets
– Outside its home market of Treasury Inflation, firm in the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Treasury Inflation needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B), 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (B), it seems that the employees of Treasury Inflation 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.
Increasing silos among functional specialists
– The organizational structure of Treasury Inflation is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Treasury Inflation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Treasury Inflation to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Treasury Inflation 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 - Innovation at the Treasury: Treasury Inflation-Protection Securities (B) should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Treasury Inflation 's lucrative customers.
Opportunities Innovation at the Treasury: Treasury Inflation-Protection Securities (B) | 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) are -
Building a culture of innovation
– managers at Treasury Inflation 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.
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 Treasury Inflation 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.
Manufacturing automation
– Treasury Inflation 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.
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. Treasury Inflation 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. Treasury Inflation 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, Treasury Inflation can use these opportunities to build new business models that can help the communities that Treasury Inflation operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Leveraging digital technologies
– Treasury Inflation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Treasury Inflation 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 Treasury Inflation to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Treasury Inflation has opened avenues for new revenue streams for the organization in the industry. This can help Treasury Inflation to build a more holistic ecosystem as suggested in the Innovation at the Treasury: Treasury Inflation-Protection Securities (B) case study. Treasury Inflation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Treasury Inflation 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.
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 Treasury Inflation in the consumer business. Now Treasury Inflation can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Treasury Inflation 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.
Developing new processes and practices
– Treasury Inflation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Treasury Inflation 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.
Threats Innovation at the Treasury: Treasury Inflation-Protection Securities (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (B) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Treasury Inflation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Treasury Inflation is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Treasury Inflation 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.
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.
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 Treasury Inflation.
Technology acceleration in Forth Industrial Revolution
– Treasury Inflation has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Treasury Inflation 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Treasury Inflation 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. Treasury Inflation 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.
Regulatory challenges
– Treasury Inflation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Innovation at the Treasury: Treasury Inflation-Protection Securities (B), Treasury Inflation 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 .
Consumer confidence and its impact on Treasury Inflation 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) .
Weighted SWOT Analysis of Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (B) 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 Treasury Inflation needs to make to build a sustainable competitive advantage.