Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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 (A)
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 (A)" 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 (A) case study are - Strategic Management Strategies, Financial analysis, Financial management, Financial markets, Government, Innovation, 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 (A) casestudy better are - – increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing energy prices, increasing commodity prices, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Innovation at the Treasury: Treasury Inflation-Protection Securities (A)
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 (A) 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 (A) can be done for the following purposes –
1. Strategic planning using facts provided in Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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 (A) | 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 (A) Harvard Business Review case study are -
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.
High switching costs
– The high switching costs that Treasury Inflation 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.
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 (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.
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 (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Treasury Inflation in the sector have low bargaining power. Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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.
Operational resilience
– The operational resilience strategy in the Innovation at the Treasury: Treasury Inflation-Protection Securities (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.
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 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Treasury Inflation is one of the leading recruiters in the industry. Managers in the Innovation at the Treasury: Treasury Inflation-Protection Securities (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.
High brand equity
– Treasury Inflation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Treasury Inflation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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.
Analytics focus
– Treasury Inflation 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 Kenneth A. Froot, Peter Hecht, Christopher E.J. Payton 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.
Innovation driven organization
– Treasury Inflation is one of the most innovative firm in sector. Manager in Innovation at the Treasury: Treasury Inflation-Protection Securities (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Innovation at the Treasury: Treasury Inflation-Protection Securities (A) | 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 (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Treasury Inflation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation at the Treasury: Treasury Inflation-Protection Securities (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.
Lack of clear differentiation of Treasury Inflation products
– To increase the profitability and margins on the products, Treasury Inflation needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Treasury Inflation 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.
No frontier risks strategy
– After analyzing the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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 Treasury Inflation has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (A) can leverage the sales team experience to cultivate customer relationships as Treasury Inflation is planning to shift buying processes online.
Need for greater diversity
– Treasury Inflation 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Innovation at the Treasury: Treasury Inflation-Protection Securities (A), is just above the industry average. Treasury Inflation needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Treasury Inflation 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. Treasury Inflation 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.
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.
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.
Opportunities Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Innovation at the Treasury: Treasury Inflation-Protection Securities (A) are -
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.
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.
Using analytics as competitive advantage
– Treasury Inflation 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 Innovation at the Treasury: Treasury Inflation-Protection Securities (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Treasury Inflation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Treasury Inflation to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Treasury Inflation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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 (A) case study. Treasury Inflation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Treasury Inflation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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.
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. Treasury Inflation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Better consumer reach
– The expansion of the 5G network will help Treasury Inflation to increase its market reach. Treasury Inflation 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.
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.
Threats Innovation at the Treasury: Treasury Inflation-Protection Securities (A) 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 (A) are -
High dependence on third party suppliers
– Treasury Inflation 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.
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.
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.
Environmental challenges
– Treasury Inflation 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. Treasury Inflation can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
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.
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.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Treasury Inflation is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Treasury Inflation needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Innovation at the Treasury: Treasury Inflation-Protection Securities (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 Treasury Inflation needs to make to build a sustainable competitive advantage.
