RiskMetrics Group, a risk and governance consultancy, had a great deal of influence on U.S. companies. This case examines the history and growth of the company, the governance services it offers, the extent of its impact on shareholders, the controversy surrounding its conflicts of interest, and the impact it has had on directors.
Swot Analysis of "RiskMetrics Group" written by Jay W. Lorsch, Kaitlyn Simpson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Riskmetrics Governance facing as an external strategic factors. Some of the topics covered in RiskMetrics Group case study are - Strategic Management Strategies, Corporate communications, Risk management and Organizational Development.
Some of the macro environment factors that can be used to understand the RiskMetrics Group casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing energy prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of RiskMetrics Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in RiskMetrics Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Riskmetrics Governance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Riskmetrics Governance 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 RiskMetrics Group can be done for the following purposes –
1. Strategic planning using facts provided in RiskMetrics Group case study
2. Improving business portfolio management of Riskmetrics Governance
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 Riskmetrics Governance
Strengths RiskMetrics Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Riskmetrics Governance in RiskMetrics Group Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Riskmetrics Governance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Riskmetrics Governance is present in almost all the verticals within the industry. This has provided firm in RiskMetrics Group 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.
Effective Research and Development (R&D)
– Riskmetrics Governance 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 RiskMetrics Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the RiskMetrics Group 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.
High brand equity
– Riskmetrics Governance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Riskmetrics Governance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Riskmetrics Governance 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.
Ability to lead change in Organizational Development field
– Riskmetrics Governance 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 Riskmetrics Governance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Riskmetrics Governance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Riskmetrics Governance 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.
Highly skilled collaborators
– Riskmetrics Governance 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 RiskMetrics Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Riskmetrics Governance 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 Riskmetrics Governance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in RiskMetrics Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Riskmetrics Governance in the sector have low bargaining power. RiskMetrics Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Riskmetrics Governance to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Riskmetrics Governance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses RiskMetrics Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of RiskMetrics Group are -
Slow decision making process
– As mentioned earlier in the report, Riskmetrics Governance 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. Riskmetrics Governance 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the RiskMetrics Group 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 Riskmetrics Governance has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study RiskMetrics Group, 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study RiskMetrics Group, it seems that the employees of Riskmetrics Governance 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.
Capital Spending Reduction
– Even during the low interest decade, Riskmetrics Governance 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 operating costs
– Compare to the competitors, firm in the HBR case study RiskMetrics Group 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 Riskmetrics Governance 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Jay W. Lorsch, Kaitlyn Simpson suggests that, Riskmetrics Governance 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study RiskMetrics Group, is just above the industry average. Riskmetrics Governance 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.
Low market penetration in new markets
– Outside its home market of Riskmetrics Governance, firm in the HBR case study RiskMetrics Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Riskmetrics Governance products
– To increase the profitability and margins on the products, Riskmetrics Governance needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Riskmetrics Governance is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study RiskMetrics Group can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities RiskMetrics Group | 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 RiskMetrics Group are -
Creating value in data economy
– The success of analytics program of Riskmetrics Governance has opened avenues for new revenue streams for the organization in the industry. This can help Riskmetrics Governance to build a more holistic ecosystem as suggested in the RiskMetrics Group case study. Riskmetrics Governance 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 Riskmetrics Governance in the consumer business. Now Riskmetrics Governance can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Riskmetrics Governance 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 RiskMetrics Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Riskmetrics Governance 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 Riskmetrics Governance 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Riskmetrics Governance can use these opportunities to build new business models that can help the communities that Riskmetrics Governance operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Riskmetrics Governance 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.
Learning at scale
– Online learning technologies has now opened space for Riskmetrics Governance 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Riskmetrics Governance 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, RiskMetrics Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Riskmetrics Governance 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Riskmetrics Governance 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Riskmetrics Governance is facing challenges because of the dominance of functional experts in the organization. RiskMetrics Group 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.
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. Riskmetrics Governance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Riskmetrics Governance 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. Riskmetrics Governance 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.
Threats RiskMetrics Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study RiskMetrics Group are -
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.
Shortening product life cycle
– it is one of the major threat that Riskmetrics Governance is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Riskmetrics Governance 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. Riskmetrics Governance can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Riskmetrics Governance 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.
Increasing wage structure of Riskmetrics Governance
– 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 Riskmetrics Governance.
High dependence on third party suppliers
– Riskmetrics Governance 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.
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. Riskmetrics Governance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Riskmetrics Governance 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 RiskMetrics Group .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Riskmetrics Governance 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 Riskmetrics Governance 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.
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 Riskmetrics Governance 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.
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 Riskmetrics Governance.
Weighted SWOT Analysis of RiskMetrics Group 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 RiskMetrics Group 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 RiskMetrics Group 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 RiskMetrics Group 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 RiskMetrics Group 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 Riskmetrics Governance needs to make to build a sustainable competitive advantage.
