Teena Lerner: Dividing the Pie at Rx Capital (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Teena Lerner: Dividing the Pie at Rx Capital (A)
Teena Lerner started her own hedge fund firm in 2001 after nearly 20 years as a star biotechnology analyst and hedge fund manager. After the start-up phase, her firm became highly profitable. In 2004, however, one of her four analysts lost a lot of money for the firm. If Lerner followed the existing compensation system, she would wind up significantly underpaying her other analysts, all of whom had performed well. Should she follow the compensation system or not? And what should be done about the underperforming analyst?
Authors :: Boris Groysberg, Victoria W. Winston, Robin Abrahams
Swot Analysis of "Teena Lerner: Dividing the Pie at Rx Capital (A)" written by Boris Groysberg, Victoria W. Winston, Robin Abrahams includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lerner Teena facing as an external strategic factors. Some of the topics covered in Teena Lerner: Dividing the Pie at Rx Capital (A) case study are - Strategic Management Strategies, Entrepreneurship, Motivating people, Organizational structure, Performance measurement and Organizational Development.
Some of the macro environment factors that can be used to understand the Teena Lerner: Dividing the Pie at Rx Capital (A) casestudy better are - – increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, technology disruption, supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Teena Lerner: Dividing the Pie at Rx Capital (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Teena Lerner: Dividing the Pie at Rx Capital (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lerner Teena, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lerner Teena 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 Teena Lerner: Dividing the Pie at Rx Capital (A) can be done for the following purposes –
1. Strategic planning using facts provided in Teena Lerner: Dividing the Pie at Rx Capital (A) case study
2. Improving business portfolio management of Lerner Teena
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 Lerner Teena
Strengths Teena Lerner: Dividing the Pie at Rx Capital (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lerner Teena in Teena Lerner: Dividing the Pie at Rx Capital (A) Harvard Business Review case study are -
Diverse revenue streams
– Lerner Teena is present in almost all the verticals within the industry. This has provided firm in Teena Lerner: Dividing the Pie at Rx Capital (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.
Cross disciplinary teams
– Horizontal connected teams at the Lerner Teena 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.
Successful track record of launching new products
– Lerner Teena has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lerner Teena 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.
Training and development
– Lerner Teena has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Teena Lerner: Dividing the Pie at Rx Capital (A) 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.
Effective Research and Development (R&D)
– Lerner Teena 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 Teena Lerner: Dividing the Pie at Rx Capital (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Lerner Teena is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Lerner Teena is one of the leading recruiters in the industry. Managers in the Teena Lerner: Dividing the Pie at Rx Capital (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.
Highly skilled collaborators
– Lerner Teena 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 Teena Lerner: Dividing the Pie at Rx Capital (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Lerner Teena is one of the most innovative firm in sector. Manager in Teena Lerner: Dividing the Pie at Rx Capital (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Lerner Teena 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 Lerner Teena is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Teena Lerner: Dividing the Pie at Rx Capital (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Lerner Teena 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, Victoria W. Winston, Robin Abrahams 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 brand equity
– Lerner Teena has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lerner Teena to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Teena Lerner: Dividing the Pie at Rx Capital (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Teena Lerner: Dividing the Pie at Rx Capital (A) are -
No frontier risks strategy
– After analyzing the HBR case study Teena Lerner: Dividing the Pie at Rx Capital (A), 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.
Products dominated business model
– Even though Lerner Teena 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 - Teena Lerner: Dividing the Pie at Rx Capital (A) should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Teena Lerner: Dividing the Pie at Rx Capital (A), is just above the industry average. Lerner Teena 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 to strategic competitive environment developments
– As Teena Lerner: Dividing the Pie at Rx Capital (A) HBR case study mentions - Lerner Teena 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.
High cash cycle compare to competitors
Lerner Teena 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 Teena Lerner: Dividing the Pie at Rx Capital (A) 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 Lerner Teena 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lerner Teena is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Teena Lerner: Dividing the Pie at Rx Capital (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.
Interest costs
– Compare to the competition, Lerner Teena has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (A) can leverage the sales team experience to cultivate customer relationships as Lerner Teena is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Lerner Teena 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.
Increasing silos among functional specialists
– The organizational structure of Lerner Teena is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Lerner Teena needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lerner Teena to focus more on services rather than just following the product oriented approach.
Opportunities Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (A) are -
Better consumer reach
– The expansion of the 5G network will help Lerner Teena to increase its market reach. Lerner Teena 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.
Using analytics as competitive advantage
– Lerner Teena 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 Teena Lerner: Dividing the Pie at Rx Capital (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lerner Teena to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lerner Teena 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 Lerner Teena to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Lerner Teena 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lerner Teena 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lerner Teena can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Lerner Teena has opened avenues for new revenue streams for the organization in the industry. This can help Lerner Teena to build a more holistic ecosystem as suggested in the Teena Lerner: Dividing the Pie at Rx Capital (A) case study. Lerner Teena can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Lerner Teena can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Teena Lerner: Dividing the Pie at Rx Capital (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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lerner Teena 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. Lerner Teena 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.
Loyalty marketing
– Lerner Teena 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lerner Teena is facing challenges because of the dominance of functional experts in the organization. Teena Lerner: Dividing the Pie at Rx Capital (A) 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.
Building a culture of innovation
– managers at Lerner Teena 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.
Manufacturing automation
– Lerner Teena 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.
Threats Teena Lerner: Dividing the Pie at Rx Capital (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Teena Lerner: Dividing the Pie at Rx Capital (A) are -
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 Lerner Teena in the Organizational Development sector and impact the bottomline of the organization.
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. Lerner Teena needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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 Lerner Teena business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Lerner Teena 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.
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 Lerner Teena.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Teena Lerner: Dividing the Pie at Rx Capital (A), Lerner Teena 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 .
Technology acceleration in Forth Industrial Revolution
– Lerner Teena has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Lerner Teena 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.
Shortening product life cycle
– it is one of the major threat that Lerner Teena is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Lerner Teena 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.
High dependence on third party suppliers
– Lerner Teena 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 Lerner Teena 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 Lerner Teena with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Lerner Teena can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (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 Teena Lerner: Dividing the Pie at Rx Capital (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 Lerner Teena needs to make to build a sustainable competitive advantage.
