10 Uncommon Values (R): Optimizing the Stock-Selection Process SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of 10 Uncommon Values (R): Optimizing the Stock-Selection Process
In 2003, Steve Hash, research director at Lehman Brothers, prepared to initiate the firm's "Ten Uncommon Values" stock-picking process for the year. An investment committee had to pick the 10 best stocks from about 100 stock ideas presented by the firm's analysts. The performance of the stocks selected for the Ten Uncommon Values had historically been strong--an investment strategy to acquire the recommended stocks and hold them for one year would have outperformed the S&P 500 for 39 of the last 54 years. However, during the latest three years--2000 to 2002--the recommendations had performed poorly, generating an average return of -22.5% vs. -11.7% for the S&P 500. Hash pondered several questions: What was the importance of the Ten Uncommon Values for Lehman Brothers and its clients? How much time and effort should the firm put into the process of selecting stocks for the report? How many members should be on the Investment Policy Committee, and who should be selected? What should the process for selection be? Should analysts whose stocks were selected be compensated for their picks? Finally, should they continue the process? Teaching Purpose: Using both qualitative and quantitative data, to allow students to discuss a range of issues: the optimal process of selecting stocks, the optimal size of the committee, how much time to spend with each analyst, private or public voting on stocks by the committee members, the right decision-making process, and whether incentives play a role in the process.
Authors :: Boris Groysberg, Paul M. Healy
Topics :: Organizational Development
Tags :: Financial management, Financial markets, Human resource management, Leading teams, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "10 Uncommon Values (R): Optimizing the Stock-Selection Process" written by Boris Groysberg, Paul M. Healy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stocks Uncommon facing as an external strategic factors. Some of the topics covered in 10 Uncommon Values (R): Optimizing the Stock-Selection Process case study are - Strategic Management Strategies, Financial management, Financial markets, Human resource management, Leading teams and Organizational Development.
Some of the macro environment factors that can be used to understand the 10 Uncommon Values (R): Optimizing the Stock-Selection Process casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of 10 Uncommon Values (R): Optimizing the Stock-Selection Process
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 10 Uncommon Values (R): Optimizing the Stock-Selection Process case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stocks Uncommon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stocks Uncommon 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process can be done for the following purposes –
1. Strategic planning using facts provided in 10 Uncommon Values (R): Optimizing the Stock-Selection Process case study
2. Improving business portfolio management of Stocks Uncommon
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 Stocks Uncommon
Strengths 10 Uncommon Values (R): Optimizing the Stock-Selection Process | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stocks Uncommon in 10 Uncommon Values (R): Optimizing the Stock-Selection Process Harvard Business Review case study are -
Diverse revenue streams
– Stocks Uncommon is present in almost all the verticals within the industry. This has provided firm in 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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.
High switching costs
– The high switching costs that Stocks Uncommon 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.
Organizational Resilience of Stocks Uncommon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stocks Uncommon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Stocks Uncommon is one of the leading recruiters in the industry. Managers in the 10 Uncommon Values (R): Optimizing the Stock-Selection Process are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Stocks Uncommon 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 Boris Groysberg, Paul M. Healy 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Stocks Uncommon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stocks Uncommon 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.
Highly skilled collaborators
– Stocks Uncommon 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Stocks Uncommon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stocks Uncommon 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
– Stocks Uncommon 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)
– Stocks Uncommon 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Stocks Uncommon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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.
High brand equity
– Stocks Uncommon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Stocks Uncommon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses 10 Uncommon Values (R): Optimizing the Stock-Selection Process | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 10 Uncommon Values (R): Optimizing the Stock-Selection Process are -
Increasing silos among functional specialists
– The organizational structure of Stocks Uncommon is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Stocks Uncommon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stocks Uncommon to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study 10 Uncommon Values (R): Optimizing the Stock-Selection Process, it seems that the employees of Stocks Uncommon 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.
High operating costs
– Compare to the competitors, firm in the HBR case study 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 Stocks Uncommon 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Stocks Uncommon 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.
Capital Spending Reduction
– Even during the low interest decade, Stocks Uncommon 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
Stocks Uncommon 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.
Slow decision making process
– As mentioned earlier in the report, Stocks Uncommon 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. Stocks Uncommon 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, Boris Groysberg, Paul M. Healy suggests that, Stocks Uncommon 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.
Skills based hiring
– The stress on hiring functional specialists at Stocks Uncommon 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.
Products dominated business model
– Even though Stocks Uncommon 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 - 10 Uncommon Values (R): Optimizing the Stock-Selection Process should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 Stocks Uncommon has relatively successful track record of launching new products.
Opportunities 10 Uncommon Values (R): Optimizing the Stock-Selection Process | 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process are -
Creating value in data economy
– The success of analytics program of Stocks Uncommon has opened avenues for new revenue streams for the organization in the industry. This can help Stocks Uncommon to build a more holistic ecosystem as suggested in the 10 Uncommon Values (R): Optimizing the Stock-Selection Process case study. Stocks Uncommon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stocks Uncommon 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 Stocks Uncommon to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Stocks Uncommon 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.
Using analytics as competitive advantage
– Stocks Uncommon 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stocks Uncommon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stocks Uncommon 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, 10 Uncommon Values (R): Optimizing the Stock-Selection Process, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stocks Uncommon can use these opportunities to build new business models that can help the communities that Stocks Uncommon operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. Stocks Uncommon can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Stocks Uncommon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Stocks Uncommon 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.
Buying journey improvements
– Stocks Uncommon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stocks Uncommon is facing challenges because of the dominance of functional experts in the organization. 10 Uncommon Values (R): Optimizing the Stock-Selection Process case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Stocks Uncommon 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.
Developing new processes and practices
– Stocks Uncommon can develop new processes and procedures in Organizational Development 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.
Threats 10 Uncommon Values (R): Optimizing the Stock-Selection Process External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 10 Uncommon Values (R): Optimizing the Stock-Selection Process are -
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. Stocks Uncommon 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.
Technology acceleration in Forth Industrial Revolution
– Stocks Uncommon has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Stocks Uncommon needs to keep up with the evolution of technology in the Organizational Development 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.
Environmental challenges
– Stocks Uncommon 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. Stocks Uncommon can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Stocks Uncommon is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Stocks Uncommon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Stocks Uncommon 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 Stocks Uncommon in the Organizational Development sector and impact the bottomline 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 Stocks Uncommon 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Stocks Uncommon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Stocks Uncommon 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 Organizational Development industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Stocks Uncommon needs to understand the core reasons impacting the Organizational Development 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, Stocks Uncommon 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process .
Weighted SWOT Analysis of 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 10 Uncommon Values (R): Optimizing the Stock-Selection Process 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 Stocks Uncommon needs to make to build a sustainable competitive advantage.