Morgan Stanley: Becoming a "One-Firm Firm" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Morgan Stanley: Becoming a "One-Firm Firm"
John Mack, the newly appointed president of Morgan Stanley, feels strongly that the firm needs to change in order to compete in a changing investment banking environment. Mack and his senior team undertake initiatives in order to transform the culture and working style of the firm from individualistic to team-oriented. The case provides detailed information about Morgan Stanley's existing culture and systems as well as the kinds of changes that it hopes to make. Morgan Stanley views the human resource management systems as a tool for attaining strategic objectives.
Authors :: M. Diane Burton, Katherine Lawrence, Thomas J. DeLong
Swot Analysis of "Morgan Stanley: Becoming a "One-Firm Firm"" written by M. Diane Burton, Katherine Lawrence, Thomas J. DeLong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Morgan Stanley facing as an external strategic factors. Some of the topics covered in Morgan Stanley: Becoming a "One-Firm Firm" case study are - Strategic Management Strategies, Human resource management, Leadership and Organizational Development.
Some of the macro environment factors that can be used to understand the Morgan Stanley: Becoming a "One-Firm Firm" casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, technology disruption, talent flight as more people leaving formal jobs, geopolitical disruptions,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Morgan Stanley: Becoming a "One-Firm Firm"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Morgan Stanley: Becoming a "One-Firm Firm" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Morgan Stanley, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Morgan Stanley 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 Morgan Stanley: Becoming a "One-Firm Firm" can be done for the following purposes –
1. Strategic planning using facts provided in Morgan Stanley: Becoming a "One-Firm Firm" case study
2. Improving business portfolio management of Morgan Stanley
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 Morgan Stanley
Strengths Morgan Stanley: Becoming a "One-Firm Firm" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Morgan Stanley in Morgan Stanley: Becoming a "One-Firm Firm" Harvard Business Review case study are -
Successful track record of launching new products
– Morgan Stanley has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Morgan Stanley 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.
Low bargaining power of suppliers
– Suppliers of Morgan Stanley in the sector have low bargaining power. Morgan Stanley: Becoming a "One-Firm Firm" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Morgan Stanley to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Morgan Stanley 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 M. Diane Burton, Katherine Lawrence, Thomas J. DeLong 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.
High switching costs
– The high switching costs that Morgan Stanley 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.
Highly skilled collaborators
– Morgan Stanley 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 Morgan Stanley: Becoming a "One-Firm Firm" HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Morgan Stanley has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Morgan Stanley to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Morgan Stanley is present in almost all the verticals within the industry. This has provided firm in Morgan Stanley: Becoming a "One-Firm Firm" 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.
Strong track record of project management
– Morgan Stanley is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Morgan Stanley
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Morgan Stanley does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Morgan Stanley is one of the most innovative firm in sector. Manager in Morgan Stanley: Becoming a "One-Firm Firm" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Morgan Stanley 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 Morgan Stanley: Becoming a "One-Firm Firm" - 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
– Morgan Stanley has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Morgan Stanley: Becoming a "One-Firm Firm" 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.
Weaknesses Morgan Stanley: Becoming a "One-Firm Firm" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Morgan Stanley: Becoming a "One-Firm Firm" are -
Capital Spending Reduction
– Even during the low interest decade, Morgan Stanley 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.
Lack of clear differentiation of Morgan Stanley products
– To increase the profitability and margins on the products, Morgan Stanley needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Morgan Stanley 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. Morgan Stanley 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.
Low market penetration in new markets
– Outside its home market of Morgan Stanley, firm in the HBR case study Morgan Stanley: Becoming a "One-Firm Firm" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, M. Diane Burton, Katherine Lawrence, Thomas J. DeLong suggests that, Morgan Stanley 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.
High cash cycle compare to competitors
Morgan Stanley 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley 's lucrative customers.
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 Morgan Stanley supply chain. Even after few cautionary changes mentioned in the HBR case study - Morgan Stanley: Becoming a "One-Firm Firm", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Morgan Stanley vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Morgan Stanley: Becoming a "One-Firm Firm" HBR case study mentions - Morgan Stanley 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Morgan Stanley: Becoming a "One-Firm Firm", it seems that the employees of Morgan Stanley 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.
No frontier risks strategy
– After analyzing the HBR case study Morgan Stanley: Becoming a "One-Firm Firm", it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
Opportunities Morgan Stanley: Becoming a "One-Firm Firm" | 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 Morgan Stanley: Becoming a "One-Firm Firm" are -
Manufacturing automation
– Morgan Stanley 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Morgan Stanley can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Morgan Stanley 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.
Buying journey improvements
– Morgan Stanley can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Morgan Stanley: Becoming a "One-Firm Firm" 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.
Developing new processes and practices
– Morgan Stanley 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.
Creating value in data economy
– The success of analytics program of Morgan Stanley has opened avenues for new revenue streams for the organization in the industry. This can help Morgan Stanley to build a more holistic ecosystem as suggested in the Morgan Stanley: Becoming a "One-Firm Firm" case study. Morgan Stanley can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Morgan Stanley can use these opportunities to build new business models that can help the communities that Morgan Stanley operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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 Morgan Stanley 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.
Leveraging digital technologies
– Morgan Stanley 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Morgan Stanley is facing challenges because of the dominance of functional experts in the organization. Morgan Stanley: Becoming a "One-Firm Firm" 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Morgan Stanley 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.
Building a culture of innovation
– managers at Morgan Stanley 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.
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. Morgan Stanley can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Morgan Stanley: Becoming a "One-Firm Firm" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Morgan Stanley: Becoming a "One-Firm Firm" are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Morgan Stanley: Becoming a "One-Firm Firm", Morgan Stanley 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 .
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. Morgan Stanley 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 Morgan Stanley business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Morgan Stanley in the Organizational Development sector and impact the bottomline of the organization.
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 Morgan Stanley.
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. Morgan Stanley can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Morgan Stanley 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Morgan Stanley 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 Morgan Stanley: Becoming a "One-Firm Firm" .
Increasing wage structure of Morgan Stanley
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Morgan Stanley.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Morgan Stanley with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Morgan Stanley 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.
Stagnating economy with rate increase
– Morgan Stanley 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.
Weighted SWOT Analysis of Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley: Becoming a "One-Firm Firm" 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 Morgan Stanley needs to make to build a sustainable competitive advantage.