Deutsche BA?rse's Strategy Derailed by the Hedge Funds SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Deutsche BA?rse's Strategy Derailed by the Hedge Funds
This case focuses on the conflict between the Hedge Funds and the Board and Management of Deutsche BA?rse, following Deutsche BA?rse's hostile offer for the London Stock Exchange. It allows participants to role play the perspectives of the Supervisory Board, led by Dr. Breuer, the CEO, Werner Seifert, the Hedge Funds (TCI, Atticus) and traditional investors (including Fidelity and Merrill Lynch).
Swot Analysis of "Deutsche BA?rse's Strategy Derailed by the Hedge Funds" written by Bergeron Sylvie, Philippe Haspeslagh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ba Rse's facing as an external strategic factors. Some of the topics covered in Deutsche BA?rse's Strategy Derailed by the Hedge Funds case study are - Strategic Management Strategies, Financial markets, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Deutsche BA?rse's Strategy Derailed by the Hedge Funds casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, there is increasing trade war between United States & China, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Deutsche BA?rse's Strategy Derailed by the Hedge Funds
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Deutsche BA?rse's Strategy Derailed by the Hedge Funds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ba Rse's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ba Rse's 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds can be done for the following purposes –
1. Strategic planning using facts provided in Deutsche BA?rse's Strategy Derailed by the Hedge Funds case study
2. Improving business portfolio management of Ba Rse's
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 Ba Rse's
Strengths Deutsche BA?rse's Strategy Derailed by the Hedge Funds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ba Rse's in Deutsche BA?rse's Strategy Derailed by the Hedge Funds Harvard Business Review case study are -
Ability to recruit top talent
– Ba Rse's is one of the leading recruiters in the industry. Managers in the Deutsche BA?rse's Strategy Derailed by the Hedge Funds are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Ba Rse's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Ba Rse's is one of the most innovative firm in sector. Manager in Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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
– Ba Rse's is present in almost all the verticals within the industry. This has provided firm in Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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.
Cross disciplinary teams
– Horizontal connected teams at the Ba Rse's 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 Ba Rse's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ba Rse's 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.
Learning organization
- Ba Rse's 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 Ba Rse's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Deutsche BA?rse's Strategy Derailed by the Hedge Funds Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Ba Rse's 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.
Organizational Resilience of Ba Rse's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ba Rse's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Ba Rse's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Ba Rse's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ba Rse's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Ba Rse's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ba Rse's 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.
Weaknesses Deutsche BA?rse's Strategy Derailed by the Hedge Funds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Deutsche BA?rse's Strategy Derailed by the Hedge Funds are -
Workers concerns about automation
– As automation is fast increasing in the segment, Ba Rse's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Ba Rse's 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Ba Rse's 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. Ba Rse's 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 bargaining power of channel partners
– Because of the regulatory requirements, Bergeron Sylvie, Philippe Haspeslagh suggests that, Ba Rse's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Ba Rse's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ba Rse's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ba Rse's to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds can leverage the sales team experience to cultivate customer relationships as Ba Rse's is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Ba Rse's 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.
Skills based hiring
– The stress on hiring functional specialists at Ba Rse's 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.
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 Ba Rse's supply chain. Even after few cautionary changes mentioned in the HBR case study - Deutsche BA?rse's Strategy Derailed by the Hedge Funds, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ba Rse's vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds, it seems that the employees of Ba Rse's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ba Rse's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Deutsche BA?rse's Strategy Derailed by the Hedge Funds | 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds are -
Leveraging digital technologies
– Ba Rse's 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 Ba Rse's 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.
Building a culture of innovation
– managers at Ba Rse's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ba Rse's 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 Ba Rse's to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Ba Rse's to increase its market reach. Ba Rse's 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.
Creating value in data economy
– The success of analytics program of Ba Rse's has opened avenues for new revenue streams for the organization in the industry. This can help Ba Rse's to build a more holistic ecosystem as suggested in the Deutsche BA?rse's Strategy Derailed by the Hedge Funds case study. Ba Rse's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Ba Rse's 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. Ba Rse's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ba Rse's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Ba Rse's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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.
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 Ba Rse's in the consumer business. Now Ba Rse's can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Ba Rse's 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.
Loyalty marketing
– Ba Rse's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ba Rse's 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.
Threats Deutsche BA?rse's Strategy Derailed by the Hedge Funds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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. Ba Rse's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Ba Rse's 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. Ba Rse's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Ba Rse's
– 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 Ba Rse's.
Consumer confidence and its impact on Ba Rse's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ba Rse's 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.
Regulatory challenges
– Ba Rse's 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.
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 Ba Rse's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds, Ba Rse's 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ba Rse's 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds .
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 Ba Rse's business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ba Rse's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ba Rse's 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.
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 Ba Rse's 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.
Weighted SWOT Analysis of Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Ba Rse's needs to make to build a sustainable competitive advantage.