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 - – increasing energy prices, technology disruption, central banks are concerned over increasing inflation, wage bills are increasing, increasing household debt because of falling income levels, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, 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.
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.
Operational resilience
– The operational resilience strategy in the Wertheim Schroder/Schroders 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.
Effective Research and Development (R&D)
– Wertheim Schroders 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 Wertheim Schroder/Schroders - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Wertheim Schroders 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 Wertheim Schroders in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Superior customer experience
– The customer experience strategy of Wertheim Schroders in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Low bargaining power of suppliers
– Suppliers of Wertheim Schroders in the sector have low bargaining power. Wertheim Schroder/Schroders has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wertheim Schroders to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
Products dominated business model
– Even though Wertheim Schroders 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 - Wertheim Schroder/Schroders should strive to include more intangible value offerings along with its core products and services.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wertheim Schroder/Schroders, is just above the industry average. Wertheim Schroders needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wertheim Schroder/Schroders 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 Wertheim Schroders has relatively successful track record of launching new products.
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.
Capital Spending Reduction
– Even during the low interest decade, Wertheim Schroders 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 Wertheim Schroders, firm in the HBR case study Wertheim Schroder/Schroders needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Wertheim Schroder/Schroders 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 Wertheim Schroder/Schroders can leverage the sales team experience to cultivate customer relationships as Wertheim Schroders is planning to shift buying processes online.
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 -
Using analytics as competitive advantage
– Wertheim Schroders 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 Wertheim Schroder/Schroders - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wertheim Schroders to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Developing new processes and practices
– Wertheim Schroders 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.
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.
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.
Loyalty marketing
– Wertheim Schroders has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wertheim Schroders 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.
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 Wertheim Schroders in the consumer business. Now Wertheim Schroders can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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. Wertheim Schroders 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. Wertheim Schroders 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 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 -
Consumer confidence and its impact on Wertheim Schroders 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.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Wertheim Schroders.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wertheim Schroders with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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 .
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.
Shortening product life cycle
– it is one of the major threat that Wertheim Schroders is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Wertheim Schroders 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.
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.
