Incentive Pay for Portfolio Managers at Harvard Management Co. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Incentive Pay for Portfolio Managers at Harvard Management Co.
This case describes the compensation system for portfolio managers at Harvard's portfolio management company, including its formulaic and bonus bank features. Harvard Management Co. President Jack Meyer explains the philosophy behind the incentive pay at his company.
Swot Analysis of "Incentive Pay for Portfolio Managers at Harvard Management Co." written by Brian J. Hall, Jonathan P. Lim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Portfolio Incentive facing as an external strategic factors. Some of the topics covered in Incentive Pay for Portfolio Managers at Harvard Management Co. case study are - Strategic Management Strategies, Financial management, Motivating people, Performance measurement and Organizational Development.
Some of the macro environment factors that can be used to understand the Incentive Pay for Portfolio Managers at Harvard Management Co. casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Incentive Pay for Portfolio Managers at Harvard Management Co.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Incentive Pay for Portfolio Managers at Harvard Management Co. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Portfolio Incentive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Portfolio Incentive 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 Incentive Pay for Portfolio Managers at Harvard Management Co. can be done for the following purposes –
1. Strategic planning using facts provided in Incentive Pay for Portfolio Managers at Harvard Management Co. case study
2. Improving business portfolio management of Portfolio Incentive
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Portfolio Incentive
Strengths Incentive Pay for Portfolio Managers at Harvard Management Co. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Portfolio Incentive in Incentive Pay for Portfolio Managers at Harvard Management Co. Harvard Business Review case study are -
Highly skilled collaborators
– Portfolio Incentive 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 Incentive Pay for Portfolio Managers at Harvard Management Co. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Portfolio Incentive
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Portfolio Incentive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Incentive Pay for Portfolio Managers at Harvard Management Co. 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.
Analytics focus
– Portfolio Incentive 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 Brian J. Hall, Jonathan P. Lim 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.
Ability to lead change in Organizational Development field
– Portfolio Incentive 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 Portfolio Incentive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Portfolio Incentive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Portfolio Incentive 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.
Effective Research and Development (R&D)
– Portfolio Incentive 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 Incentive Pay for Portfolio Managers at Harvard Management Co. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Portfolio Incentive has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Portfolio Incentive 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.
High brand equity
– Portfolio Incentive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Portfolio Incentive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Portfolio Incentive 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.
Learning organization
- Portfolio Incentive 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 Portfolio Incentive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Incentive Pay for Portfolio Managers at Harvard Management Co. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Portfolio Incentive in the sector have low bargaining power. Incentive Pay for Portfolio Managers at Harvard Management Co. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Portfolio Incentive to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Incentive Pay for Portfolio Managers at Harvard Management Co. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Incentive Pay for Portfolio Managers at Harvard Management Co. are -
Low market penetration in new markets
– Outside its home market of Portfolio Incentive, firm in the HBR case study Incentive Pay for Portfolio Managers at Harvard Management Co. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Incentive Pay for Portfolio Managers at Harvard Management Co., is just above the industry average. Portfolio Incentive 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Portfolio Incentive supply chain. Even after few cautionary changes mentioned in the HBR case study - Incentive Pay for Portfolio Managers at Harvard Management Co., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Portfolio Incentive vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Portfolio Incentive 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Portfolio Incentive 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.
Aligning sales with marketing
– It come across in the case study Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Incentive Pay for Portfolio Managers at Harvard Management Co. can leverage the sales team experience to cultivate customer relationships as Portfolio Incentive is planning to shift buying processes online.
Products dominated business model
– Even though Portfolio Incentive 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 - Incentive Pay for Portfolio Managers at Harvard Management Co. should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Portfolio Incentive 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.
Increasing silos among functional specialists
– The organizational structure of Portfolio Incentive is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Portfolio Incentive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Portfolio Incentive to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Brian J. Hall, Jonathan P. Lim suggests that, Portfolio Incentive 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.
Need for greater diversity
– Portfolio Incentive 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.
Opportunities Incentive Pay for Portfolio Managers at Harvard Management Co. | 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 Incentive Pay for Portfolio Managers at Harvard Management Co. are -
Creating value in data economy
– The success of analytics program of Portfolio Incentive has opened avenues for new revenue streams for the organization in the industry. This can help Portfolio Incentive to build a more holistic ecosystem as suggested in the Incentive Pay for Portfolio Managers at Harvard Management Co. case study. Portfolio Incentive can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Portfolio Incentive in the consumer business. Now Portfolio Incentive can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Portfolio Incentive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Portfolio Incentive can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Portfolio Incentive 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 Portfolio Incentive to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Portfolio Incentive 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.
Using analytics as competitive advantage
– Portfolio Incentive 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 Incentive Pay for Portfolio Managers at Harvard Management Co. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Portfolio Incentive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Portfolio Incentive 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 Organizational Development segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Portfolio Incentive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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. Portfolio Incentive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Portfolio Incentive 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.
Learning at scale
– Online learning technologies has now opened space for Portfolio Incentive 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.
Better consumer reach
– The expansion of the 5G network will help Portfolio Incentive to increase its market reach. Portfolio Incentive 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.
Threats Incentive Pay for Portfolio Managers at Harvard Management Co. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Incentive Pay for Portfolio Managers at Harvard Management Co. are -
High dependence on third party suppliers
– Portfolio Incentive 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.
Consumer confidence and its impact on Portfolio Incentive 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Portfolio Incentive in the Organizational Development industry. The Organizational Development 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.
Stagnating economy with rate increase
– Portfolio Incentive 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Incentive Pay for Portfolio Managers at Harvard Management Co., Portfolio Incentive may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Portfolio Incentive can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Portfolio Incentive 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Portfolio Incentive business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Portfolio Incentive is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Portfolio Incentive 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 Incentive Pay for Portfolio Managers at Harvard Management Co. .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Portfolio Incentive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Environmental challenges
– Portfolio Incentive 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. Portfolio Incentive can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Weighted SWOT Analysis of Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Incentive Pay for Portfolio Managers at Harvard Management Co. 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 Portfolio Incentive needs to make to build a sustainable competitive advantage.
