Case Study Description of Wertheim Schroder/Schroders
In 1986, Wertheim & Co. of New York entered into a joint venture with Schroders plc of London to form the investment bank Wertheim Schroder. By 1993, there were numerous successes as the partners pursued joint opportunities, but there were also areas in which integration had not taken place. The CEO wondered how to create greater integration.
Authors :: Rosabeth Moss Kanter, Kalman D. Applbaum, Pamela Yatsko, Lisa K. Gabriel
Swot Analysis of "Wertheim Schroder/Schroders" written by Rosabeth Moss Kanter, Kalman D. Applbaum, Pamela Yatsko, Lisa K. Gabriel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wertheim Schroders facing as an external strategic factors. Some of the topics covered in Wertheim Schroder/Schroders case study are - Strategic Management Strategies, International business, Joint ventures, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Wertheim Schroder/Schroders casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Wertheim Schroder/Schroders
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wertheim Schroder/Schroders case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wertheim Schroders, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wertheim Schroders 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 Wertheim Schroder/Schroders can be done for the following purposes –
1. Strategic planning using facts provided in Wertheim Schroder/Schroders case study
2. Improving business portfolio management of Wertheim Schroders
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 Wertheim Schroders
Strengths Wertheim Schroder/Schroders | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wertheim Schroders in Wertheim Schroder/Schroders Harvard Business Review case study are -
High brand equity
– Wertheim Schroders has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wertheim Schroders to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Wertheim Schroders digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wertheim Schroders 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.
Training and development
– Wertheim Schroders has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wertheim Schroder/Schroders 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Wertheim Schroder/Schroders firm has clearly differentiated products in the market place. This has enabled Wertheim Schroders to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Wertheim Schroders to invest into research and development (R&D) and innovation.
Learning organization
- Wertheim Schroders 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 Wertheim Schroders is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wertheim Schroder/Schroders Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Wertheim Schroders
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wertheim Schroders does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Wertheim Schroders 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 Rosabeth Moss Kanter, Kalman D. Applbaum, Pamela Yatsko, Lisa K. Gabriel 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.
Highly skilled collaborators
– Wertheim Schroders 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 Wertheim Schroder/Schroders HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Wertheim Schroders 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.
Innovation driven organization
– Wertheim Schroders is one of the most innovative firm in sector. Manager in Wertheim Schroder/Schroders Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Wertheim Schroders is present in almost all the verticals within the industry. This has provided firm in Wertheim Schroder/Schroders 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.
Ability to recruit top talent
– Wertheim Schroders is one of the leading recruiters in the industry. Managers in the Wertheim Schroder/Schroders are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Wertheim Schroder/Schroders | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wertheim Schroder/Schroders are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wertheim Schroders is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wertheim Schroder/Schroders 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 cash cycle compare to competitors
Wertheim Schroders 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Wertheim Schroder/Schroders 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 Wertheim Schroders 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Wertheim Schroders is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Wertheim Schroders needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wertheim Schroders to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Wertheim Schroders 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.
Slow to strategic competitive environment developments
– As Wertheim Schroder/Schroders HBR case study mentions - Wertheim Schroders 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.
Lack of clear differentiation of Wertheim Schroders products
– To increase the profitability and margins on the products, Wertheim Schroders needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Wertheim Schroders, firm in the HBR case study Wertheim Schroder/Schroders needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Wertheim Schroders 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. Wertheim Schroders 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.
Need for greater diversity
– Wertheim Schroders 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wertheim Schroder/Schroders, in the dynamic environment Wertheim Schroders has struggled to respond to the nimble upstart competition. Wertheim Schroders has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Wertheim Schroder/Schroders | 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 Wertheim Schroder/Schroders are -
Learning at scale
– Online learning technologies has now opened space for Wertheim Schroders to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wertheim Schroders 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 Wertheim Schroders to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Wertheim Schroders 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wertheim Schroders can use these opportunities to build new business models that can help the communities that Wertheim Schroders operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Wertheim Schroders 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wertheim Schroders is facing challenges because of the dominance of functional experts in the organization. Wertheim Schroder/Schroders 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.
Better consumer reach
– The expansion of the 5G network will help Wertheim Schroders to increase its market reach. Wertheim Schroders 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wertheim Schroders 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, Wertheim Schroder/Schroders, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wertheim Schroders 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.
Leveraging digital technologies
– Wertheim Schroders 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.
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 Wertheim Schroders 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.
Buying journey improvements
– Wertheim Schroders can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wertheim Schroder/Schroders 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.
Creating value in data economy
– The success of analytics program of Wertheim Schroders has opened avenues for new revenue streams for the organization in the industry. This can help Wertheim Schroders to build a more holistic ecosystem as suggested in the Wertheim Schroder/Schroders case study. Wertheim Schroders can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Wertheim Schroder/Schroders External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wertheim Schroder/Schroders are -
Increasing wage structure of Wertheim Schroders
– 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 Wertheim Schroders.
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. Wertheim Schroders 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.
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 Wertheim Schroders in the Strategy & Execution sector and impact the bottomline of the organization.
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. Wertheim Schroders can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Wertheim Schroders 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wertheim Schroders 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.
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.
Technology acceleration in Forth Industrial Revolution
– Wertheim Schroders has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Wertheim Schroders 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.
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 Wertheim Schroders business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wertheim Schroders 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 Wertheim Schroder/Schroders .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wertheim Schroder/Schroders, Wertheim Schroders 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. Wertheim Schroders needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Wertheim Schroders 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. Wertheim Schroders can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Wertheim Schroder/Schroders 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 Wertheim Schroder/Schroders 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 Wertheim Schroder/Schroders 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 Wertheim Schroder/Schroders 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 Wertheim Schroder/Schroders 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 Wertheim Schroders needs to make to build a sustainable competitive advantage.