Charles Schwab Corp.: Introducing a New Brand SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Charles Schwab Corp.: Introducing a New Brand
As the financial services industry converges, how should Charles Schwab, widely known as a discount brokerage firm, position its brand? This case presents elements of the company's overall brand strategy--including brand assets, choice of target audience, and media message.
Swot Analysis of "Charles Schwab Corp.: Introducing a New Brand" written by Rajiv Lal, David Kiron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Schwab Brand facing as an external strategic factors. Some of the topics covered in Charles Schwab Corp.: Introducing a New Brand case study are - Strategic Management Strategies, Communication, Customer service and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Charles Schwab Corp.: Introducing a New Brand casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Charles Schwab Corp.: Introducing a New Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Charles Schwab Corp.: Introducing a New Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Schwab Brand, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Schwab Brand 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 Charles Schwab Corp.: Introducing a New Brand can be done for the following purposes –
1. Strategic planning using facts provided in Charles Schwab Corp.: Introducing a New Brand case study
2. Improving business portfolio management of Schwab Brand
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Schwab Brand
Strengths Charles Schwab Corp.: Introducing a New Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Schwab Brand in Charles Schwab Corp.: Introducing a New Brand Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Schwab Brand 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
– Schwab Brand has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Schwab Brand 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 Schwab Brand in the sector have low bargaining power. Charles Schwab Corp.: Introducing a New Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Schwab Brand to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Schwab Brand is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Schwab Brand digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Schwab Brand 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Charles Schwab Corp.: Introducing a New Brand firm has clearly differentiated products in the market place. This has enabled Schwab Brand to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Schwab Brand to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Schwab Brand in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Charles Schwab Corp.: Introducing a New Brand Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Schwab Brand 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 Rajiv Lal, David Kiron 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 Schwab Brand 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.
Effective Research and Development (R&D)
– Schwab Brand 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 Charles Schwab Corp.: Introducing a New Brand - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Schwab Brand is present in almost all the verticals within the industry. This has provided firm in Charles Schwab Corp.: Introducing a New Brand 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.
Weaknesses Charles Schwab Corp.: Introducing a New Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Charles Schwab Corp.: Introducing a New Brand are -
High operating costs
– Compare to the competitors, firm in the HBR case study Charles Schwab Corp.: Introducing a New Brand 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 Schwab Brand 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Schwab Brand 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. Schwab Brand 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Schwab Brand 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rajiv Lal, David Kiron suggests that, Schwab Brand 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.
Increasing silos among functional specialists
– The organizational structure of Schwab Brand is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Schwab Brand needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Schwab Brand to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Schwab Brand 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.
Interest costs
– Compare to the competition, Schwab Brand 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.
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 Schwab Brand supply chain. Even after few cautionary changes mentioned in the HBR case study - Charles Schwab Corp.: Introducing a New Brand, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Schwab Brand vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Charles Schwab Corp.: Introducing a New Brand HBR case study mentions - Schwab Brand 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.
Capital Spending Reduction
– Even during the low interest decade, Schwab Brand 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Charles Schwab Corp.: Introducing a New Brand 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 Schwab Brand has relatively successful track record of launching new products.
Opportunities Charles Schwab Corp.: Introducing a New Brand | 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 Charles Schwab Corp.: Introducing a New Brand are -
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 Schwab Brand 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.
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 Schwab Brand in the consumer business. Now Schwab Brand can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Schwab Brand in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Buying journey improvements
– Schwab Brand can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Charles Schwab Corp.: Introducing a New Brand 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Schwab Brand 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.
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. Schwab Brand can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Schwab Brand can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Schwab Brand 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 Schwab Brand to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Schwab Brand can use these opportunities to build new business models that can help the communities that Schwab Brand operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Building a culture of innovation
– managers at Schwab Brand 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 Sales & Marketing segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Schwab Brand 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. Schwab Brand 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
– Schwab Brand 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.
Better consumer reach
– The expansion of the 5G network will help Schwab Brand to increase its market reach. Schwab Brand will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Charles Schwab Corp.: Introducing a New Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Charles Schwab Corp.: Introducing a New Brand are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Schwab Brand with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Regulatory challenges
– Schwab Brand 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 Sales & Marketing industry regulations.
Consumer confidence and its impact on Schwab Brand 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Schwab Brand 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 Charles Schwab Corp.: Introducing a New Brand .
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 Schwab Brand.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Schwab Brand in the Sales & Marketing industry. The Sales & Marketing 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.
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. Schwab Brand 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.
Stagnating economy with rate increase
– Schwab Brand 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 Schwab Brand
– 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 Schwab Brand.
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 Schwab Brand in the Sales & Marketing sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Schwab Brand 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
– Schwab Brand 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.
Weighted SWOT Analysis of Charles Schwab Corp.: Introducing a New Brand 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 Charles Schwab Corp.: Introducing a New Brand 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 Charles Schwab Corp.: Introducing a New Brand 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 Charles Schwab Corp.: Introducing a New Brand 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 Charles Schwab Corp.: Introducing a New Brand 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 Schwab Brand needs to make to build a sustainable competitive advantage.