State Street Corp.: Leading with Information Technology (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of State Street Corp.: Leading with Information Technology (B)
With Multi-currency HORIZON, a real-time multi-currency accounting system that replaced the traditional batch-oriented single-currency accounting system, successfully launched, State Street Corp. (State Street) began to focus on growing the scope of its business through new information-based value-added services. At an analyst meeting in May 1997, Marshall N. Carter, chairman and chief executive office of State Street, had announced that State Street's goal was to offer its customers a fully integrated range of products and services, from news and market data to trade settlement.
Swot Analysis of "State Street Corp.: Leading with Information Technology (B)" written by Stephen P. Bradley, Kelley Porter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Street Currency facing as an external strategic factors. Some of the topics covered in State Street Corp.: Leading with Information Technology (B) case study are - Strategic Management Strategies, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the State Street Corp.: Leading with Information Technology (B) casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of State Street Corp.: Leading with Information Technology (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in State Street Corp.: Leading with Information Technology (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Street Currency, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Street Currency 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 State Street Corp.: Leading with Information Technology (B) can be done for the following purposes –
1. Strategic planning using facts provided in State Street Corp.: Leading with Information Technology (B) case study
2. Improving business portfolio management of Street Currency
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Street Currency
Strengths State Street Corp.: Leading with Information Technology (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Street Currency in State Street Corp.: Leading with Information Technology (B) Harvard Business Review case study are -
Analytics focus
– Street Currency 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 Stephen P. Bradley, Kelley Porter 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.
Effective Research and Development (R&D)
– Street Currency 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 State Street Corp.: Leading with Information Technology (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Street Currency is one of the most innovative firm in sector. Manager in State Street Corp.: Leading with Information Technology (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Street Currency in the sector have low bargaining power. State Street Corp.: Leading with Information Technology (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Street Currency to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Street Currency in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Street Currency is present in almost all the verticals within the industry. This has provided firm in State Street Corp.: Leading with Information Technology (B) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Street Currency digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Street Currency 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.
High switching costs
– The high switching costs that Street Currency 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.
Sustainable margins compare to other players in Strategy & Execution industry
– State Street Corp.: Leading with Information Technology (B) firm has clearly differentiated products in the market place. This has enabled Street Currency to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Street Currency to invest into research and development (R&D) and innovation.
Learning organization
- Street Currency 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 Street Currency is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in State Street Corp.: Leading with Information Technology (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the State Street Corp.: Leading with Information Technology (B) 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.
Training and development
– Street Currency has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of State Street Corp.: Leading with Information Technology (B) are -
Interest costs
– Compare to the competition, Street Currency 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.
Products dominated business model
– Even though Street Currency 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 - State Street Corp.: Leading with Information Technology (B) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Street Currency, firm in the HBR case study State Street Corp.: Leading with Information Technology (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study State Street Corp.: Leading with Information Technology (B), in the dynamic environment Street Currency has struggled to respond to the nimble upstart competition. Street Currency has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Street Currency 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.
Skills based hiring
– The stress on hiring functional specialists at Street Currency has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Street Currency products
– To increase the profitability and margins on the products, Street Currency needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Street Currency 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.
Need for greater diversity
– Street Currency has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) can leverage the sales team experience to cultivate customer relationships as Street Currency is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Street Currency is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Street Currency needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Street Currency to focus more on services rather than just following the product oriented approach.
Opportunities State Street Corp.: Leading with Information Technology (B) | 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 State Street Corp.: Leading with Information Technology (B) are -
Creating value in data economy
– The success of analytics program of Street Currency has opened avenues for new revenue streams for the organization in the industry. This can help Street Currency to build a more holistic ecosystem as suggested in the State Street Corp.: Leading with Information Technology (B) case study. Street Currency can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Street Currency 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 Strategy & Execution segment.
Leveraging digital technologies
– Street Currency 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.
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. Street Currency can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Street Currency 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 State Street Corp.: Leading with Information Technology (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Street Currency to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Street Currency 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. Street Currency 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Street Currency 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, State Street Corp.: Leading with Information Technology (B), 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
– Street Currency 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Street Currency 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 Street Currency to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Street Currency can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. State Street Corp.: Leading with Information Technology (B) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Street Currency can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Street Currency can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Street Currency can use these opportunities to build new business models that can help the communities that Street Currency operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats State Street Corp.: Leading with Information Technology (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study State Street Corp.: Leading with Information Technology (B) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Street Currency in the Strategy & Execution industry. The Strategy & Execution 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.
Regulatory challenges
– Street Currency 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 Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study State Street Corp.: Leading with Information Technology (B), Street Currency may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Street Currency 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. Street Currency can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Street Currency is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Street Currency 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.
Technology acceleration in Forth Industrial Revolution
– Street Currency has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Street Currency needs to keep up with the evolution of technology in the Strategy & Execution 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.
Increasing wage structure of Street Currency
– 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 Street Currency.
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. Street Currency needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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. Street Currency 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Street Currency 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 State Street Corp.: Leading with Information Technology (B) .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Street Currency 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 Street Currency needs to make to build a sustainable competitive advantage.
