Case Study Description of Retail Financial Services in 1998: Fidelity Investments
Provides an overview of Fidelity Investment'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: Fidelity Investments" 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: Fidelity Investments 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: Fidelity Investments casestudy better are - – digital marketing is dominated by two big players Facebook and Google, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Retail Financial Services in 1998: Fidelity Investments
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: Fidelity Investments 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: Fidelity Investments can be done for the following purposes –
1. Strategic planning using facts provided in Retail Financial Services in 1998: Fidelity Investments 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: Fidelity Investments | 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: Fidelity Investments Harvard Business Review case study are -
Learning organization
- Retail 1998 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 Retail 1998 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Retail Financial Services in 1998: Fidelity Investments Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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: Fidelity Investments 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 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.
Effective Research and Development (R&D)
– Retail 1998 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 Retail Financial Services in 1998: Fidelity Investments - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Training and development
– Retail 1998 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Retail Financial Services in 1998: Fidelity Investments 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.
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.
Highly skilled collaborators
– Retail 1998 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 Retail Financial Services in 1998: Fidelity Investments HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Retail 1998
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Retail 1998 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Retail 1998 in the sector have low bargaining power. Retail Financial Services in 1998: Fidelity Investments 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.
Weaknesses Retail Financial Services in 1998: Fidelity Investments | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Retail Financial Services in 1998: Fidelity Investments are -
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 Retail 1998 supply chain. Even after few cautionary changes mentioned in the HBR case study - Retail Financial Services in 1998: Fidelity Investments, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Retail 1998 vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Retail Financial Services in 1998: Fidelity Investments, 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.
Skills based hiring
– The stress on hiring functional specialists at Retail 1998 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.
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: Fidelity Investments can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Retail 1998, firm in the HBR case study Retail Financial Services in 1998: Fidelity Investments 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: Fidelity Investments, 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.
Slow to strategic competitive environment developments
– As Retail Financial Services in 1998: Fidelity Investments 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.
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: Fidelity Investments should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Retail 1998 is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Retail 1998 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Retail 1998 to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Retail Financial Services in 1998: Fidelity Investments 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.
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.
Opportunities Retail Financial Services in 1998: Fidelity Investments | 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: Fidelity Investments are -
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.
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.
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. Retail 1998 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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: Fidelity Investments case study. Retail 1998 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Retail 1998 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.
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.
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 Retail 1998 in the consumer business. Now Retail 1998 can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Retail 1998 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 Retail Financial Services in 1998: Fidelity Investments - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Retail 1998 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Retail 1998 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.
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 Retail 1998 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.
Threats Retail Financial Services in 1998: Fidelity Investments 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: Fidelity Investments 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.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Retail 1998 business can come under increasing regulations regarding data privacy, data security, 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.
Consumer confidence and its impact on Retail 1998 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.
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.
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.
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.
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.
Environmental challenges
– Retail 1998 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. Retail 1998 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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: Fidelity Investments, 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 .
Weighted SWOT Analysis of Retail Financial Services in 1998: Fidelity Investments 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: Fidelity Investments 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: Fidelity Investments 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: Fidelity Investments 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: Fidelity Investments 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.
