New York Stock Exchange vs. NASDAQ SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of New York Stock Exchange vs. NASDAQ
Reviews the competition between stock markets, specifically the New York Stock Exchange and NASDAQ, as it plays out both in the United States and internationally. The competition between the two exchanges is interesting because of technological developments and the globalization of capital markets.
Authors :: Estelle S. Cantillon, Tarun Khanna, Anand R. Radhakrishnan
Swot Analysis of "New York Stock Exchange vs. NASDAQ" written by Estelle S. Cantillon, Tarun Khanna, Anand R. Radhakrishnan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nasdaq Stock facing as an external strategic factors. Some of the topics covered in New York Stock Exchange vs. NASDAQ case study are - Strategic Management Strategies, Financial markets, Globalization, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the New York Stock Exchange vs. NASDAQ casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of New York Stock Exchange vs. NASDAQ
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New York Stock Exchange vs. NASDAQ case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nasdaq Stock, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nasdaq Stock 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 New York Stock Exchange vs. NASDAQ can be done for the following purposes –
1. Strategic planning using facts provided in New York Stock Exchange vs. NASDAQ case study
2. Improving business portfolio management of Nasdaq Stock
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 Nasdaq Stock
Strengths New York Stock Exchange vs. NASDAQ | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nasdaq Stock in New York Stock Exchange vs. NASDAQ Harvard Business Review case study are -
Innovation driven organization
– Nasdaq Stock is one of the most innovative firm in sector. Manager in New York Stock Exchange vs. NASDAQ Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nasdaq Stock digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nasdaq Stock 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.
Effective Research and Development (R&D)
– Nasdaq Stock 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 New York Stock Exchange vs. NASDAQ - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Nasdaq Stock 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 Nasdaq Stock is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in New York Stock Exchange vs. NASDAQ Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the New York Stock Exchange vs. NASDAQ 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.
Organizational Resilience of Nasdaq Stock
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nasdaq Stock does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Nasdaq Stock has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nasdaq Stock 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
– Nasdaq Stock has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New York Stock Exchange vs. NASDAQ 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.
Analytics focus
– Nasdaq Stock 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 Estelle S. Cantillon, Tarun Khanna, Anand R. Radhakrishnan 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.
Ability to lead change in Strategy & Execution field
– Nasdaq Stock 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 Nasdaq Stock in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Nasdaq Stock in the sector have low bargaining power. New York Stock Exchange vs. NASDAQ has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nasdaq Stock to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Nasdaq Stock 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 New York Stock Exchange vs. NASDAQ HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses New York Stock Exchange vs. NASDAQ | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New York Stock Exchange vs. NASDAQ are -
High cash cycle compare to competitors
Nasdaq Stock 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.
Capital Spending Reduction
– Even during the low interest decade, Nasdaq Stock 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.
Low market penetration in new markets
– Outside its home market of Nasdaq Stock, firm in the HBR case study New York Stock Exchange vs. NASDAQ needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nasdaq Stock is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study New York Stock Exchange vs. NASDAQ can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nasdaq Stock supply chain. Even after few cautionary changes mentioned in the HBR case study - New York Stock Exchange vs. NASDAQ, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nasdaq Stock vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Nasdaq Stock 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. Nasdaq Stock 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study New York Stock Exchange vs. NASDAQ, in the dynamic environment Nasdaq Stock has struggled to respond to the nimble upstart competition. Nasdaq Stock has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Nasdaq Stock 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 bargaining power of channel partners
– Because of the regulatory requirements, Estelle S. Cantillon, Tarun Khanna, Anand R. Radhakrishnan suggests that, Nasdaq Stock 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.
Skills based hiring
– The stress on hiring functional specialists at Nasdaq Stock 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nasdaq Stock 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.
Opportunities New York Stock Exchange vs. NASDAQ | 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 New York Stock Exchange vs. NASDAQ are -
Using analytics as competitive advantage
– Nasdaq Stock 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 New York Stock Exchange vs. NASDAQ - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nasdaq Stock to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nasdaq Stock can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Nasdaq Stock can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nasdaq Stock 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nasdaq Stock in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nasdaq Stock 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 Nasdaq Stock to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Nasdaq Stock 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nasdaq Stock 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, New York Stock Exchange vs. NASDAQ, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Nasdaq Stock to increase its market reach. Nasdaq Stock 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.
Manufacturing automation
– Nasdaq Stock 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.
Building a culture of innovation
– managers at Nasdaq Stock 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.
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 Nasdaq Stock in the consumer business. Now Nasdaq Stock can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nasdaq Stock can use these opportunities to build new business models that can help the communities that Nasdaq Stock operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats New York Stock Exchange vs. NASDAQ External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New York Stock Exchange vs. NASDAQ are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nasdaq Stock 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 New York Stock Exchange vs. NASDAQ .
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. Nasdaq Stock can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Nasdaq Stock is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Nasdaq Stock 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.
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 Nasdaq Stock in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Nasdaq Stock 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study New York Stock Exchange vs. NASDAQ, Nasdaq Stock 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 .
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. Nasdaq Stock 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.
Consumer confidence and its impact on Nasdaq Stock 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.
Environmental challenges
– Nasdaq Stock 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. Nasdaq Stock can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nasdaq Stock 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.
High dependence on third party suppliers
– Nasdaq Stock 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nasdaq Stock with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of New York Stock Exchange vs. NASDAQ 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 New York Stock Exchange vs. NASDAQ 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 New York Stock Exchange vs. NASDAQ 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 New York Stock Exchange vs. NASDAQ 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 New York Stock Exchange vs. NASDAQ 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 Nasdaq Stock needs to make to build a sustainable competitive advantage.