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 - – talent flight as more people leaving formal jobs, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, 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 -
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.
Effective Research and Development (R&D)
– Ba Rse's 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Ba Rse's 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 Deutsche BA?rse's Strategy Derailed by the Hedge Funds HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Low bargaining power of suppliers
– Suppliers of Ba Rse's in the sector have low bargaining power. Deutsche BA?rse's Strategy Derailed by the Hedge Funds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ba Rse's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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.
Ability to lead change in Strategy & Execution field
– Ba Rse's 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 Ba Rse's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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 -
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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 Ba Rse's has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds, in the dynamic environment Ba Rse's has struggled to respond to the nimble upstart competition. Ba Rse's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds, is just above the industry average. Ba Rse's 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.
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.
Interest costs
– Compare to the competition, Ba Rse's 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.
Low market penetration in new markets
– Outside its home market of Ba Rse's, firm in the HBR case study Deutsche BA?rse's Strategy Derailed by the Hedge Funds needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Products dominated business model
– Even though Ba Rse's 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 - Deutsche BA?rse's Strategy Derailed by the Hedge Funds should strive to include more intangible value offerings along with its core products and services.
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 -
Developing new processes and practices
– Ba Rse's 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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ba Rse's is facing challenges because of the dominance of functional experts in the organization. Deutsche BA?rse's Strategy Derailed by the Hedge Funds 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ba Rse's 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, Deutsche BA?rse's Strategy Derailed by the Hedge Funds, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ba Rse's can use these opportunities to build new business models that can help the communities that Ba Rse's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
Manufacturing automation
– Ba Rse's 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.
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.
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 -
High dependence on third party suppliers
– Ba Rse's 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.
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.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Ba Rse's 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.
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. Ba Rse's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 .
Shortening product life cycle
– it is one of the major threat that Ba Rse's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
