Retail Financial Services in 1998: Charles Schwab SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Retail Financial Services in 1998: Charles Schwab
Provides an overview of Charles Schwab's current strategy for retail financial services. Retail Financial Services in 1998 should be given to all students as background material. The class should then be split into groups, with each group receiving one of the following cases: Retail Financial Services in 1998: Charles Schwab, Retail Financial Services in 1998: Fidelity Investments, Retail Financial Services in 1998: First Union, Retail Financial Services in 1998: Merrill Lynch, or Retail Financial Services in 1998: Travelers to prepare in order to understand how each player is attempting to capture value in the converging world of retail financial services.
Swot Analysis of "Retail Financial Services in 1998: Charles Schwab" written by Stephen P. Bradley, Takia Mahmood includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Retail 1998 facing as an external strategic factors. Some of the topics covered in Retail Financial Services in 1998: Charles Schwab case study are - Strategic Management Strategies, Financial markets, Reorganization and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Retail Financial Services in 1998: Charles Schwab casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Retail Financial Services in 1998: Charles Schwab
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Retail Financial Services in 1998: Charles Schwab case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Retail 1998, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Retail 1998 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 Retail Financial Services in 1998: Charles Schwab can be done for the following purposes –
1. Strategic planning using facts provided in Retail Financial Services in 1998: Charles Schwab case study
2. Improving business portfolio management of Retail 1998
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 Retail 1998
Strengths Retail Financial Services in 1998: Charles Schwab | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Retail 1998 in Retail Financial Services in 1998: Charles Schwab Harvard Business Review case study are -
Strong track record of project management
– Retail 1998 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Retail 1998 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Retail 1998 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Retail 1998 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.
Successful track record of launching new products
– Retail 1998 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Retail 1998 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.
Diverse revenue streams
– Retail 1998 is present in almost all the verticals within the industry. This has provided firm in Retail Financial Services in 1998: Charles Schwab 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.
Innovation driven organization
– Retail 1998 is one of the most innovative firm in sector. Manager in Retail Financial Services in 1998: Charles Schwab Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Retail Financial Services in 1998: Charles Schwab 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Retail Financial Services in 1998: Charles Schwab firm has clearly differentiated products in the market place. This has enabled Retail 1998 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Retail 1998 to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Retail 1998 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 Retail 1998 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 Retail 1998 in the sector have low bargaining power. Retail Financial Services in 1998: Charles Schwab has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Retail 1998 to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Retail 1998 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Retail 1998 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Retail 1998 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.
Weaknesses Retail Financial Services in 1998: Charles Schwab | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Retail Financial Services in 1998: Charles Schwab are -
Slow to strategic competitive environment developments
– As Retail Financial Services in 1998: Charles Schwab HBR case study mentions - Retail 1998 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.
No frontier risks strategy
– After analyzing the HBR case study Retail Financial Services in 1998: Charles Schwab, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Lack of clear differentiation of Retail 1998 products
– To increase the profitability and margins on the products, Retail 1998 needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Retail 1998 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 - Retail Financial Services in 1998: Charles Schwab 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 Retail 1998, firm in the HBR case study Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab, in the dynamic environment Retail 1998 has struggled to respond to the nimble upstart competition. Retail 1998 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Retail 1998 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.
Aligning sales with marketing
– It come across in the case study Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab can leverage the sales team experience to cultivate customer relationships as Retail 1998 is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Retail Financial Services in 1998: Charles Schwab 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 Retail 1998 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Retail 1998 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Retail Financial Services in 1998: Charles Schwab 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 star products
– The top 2 products and services of the firm as mentioned in the Retail Financial Services in 1998: Charles Schwab 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 Retail 1998 has relatively successful track record of launching new products.
Opportunities Retail Financial Services in 1998: Charles Schwab | 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 Retail Financial Services in 1998: Charles Schwab are -
Creating value in data economy
– The success of analytics program of Retail 1998 has opened avenues for new revenue streams for the organization in the industry. This can help Retail 1998 to build a more holistic ecosystem as suggested in the Retail Financial Services in 1998: Charles Schwab case study. Retail 1998 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Retail 1998 to increase its market reach. Retail 1998 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.
Building a culture of innovation
– managers at Retail 1998 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Retail 1998 is facing challenges because of the dominance of functional experts in the organization. Retail Financial Services in 1998: Charles Schwab 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Retail 1998 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Retail 1998 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 Retail 1998 to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Retail 1998 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Retail 1998 can use these opportunities to build new business models that can help the communities that Retail 1998 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Retail 1998 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.
Loyalty marketing
– Retail 1998 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.
Leveraging digital technologies
– Retail 1998 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Retail 1998 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Retail 1998 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. Retail 1998 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 Retail Financial Services in 1998: Charles Schwab External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Retail Financial Services in 1998: Charles Schwab are -
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. Retail 1998 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Retail Financial Services in 1998: Charles Schwab, Retail 1998 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 .
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. Retail 1998 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Retail 1998 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.
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.
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 Retail 1998 in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Retail 1998 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 Retail Financial Services in 1998: Charles Schwab .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Retail 1998 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Retail 1998 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Retail 1998 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Retail 1998 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.
High dependence on third party suppliers
– Retail 1998 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.
Stagnating economy with rate increase
– Retail 1998 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.
Weighted SWOT Analysis of Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab 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 Retail Financial Services in 1998: Charles Schwab 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 Retail 1998 needs to make to build a sustainable competitive advantage.
