State Street Corp.: Leading with Information Technology (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of State Street Corp.: Leading with Information Technology (B)
With Multi-currency HORIZON, a real-time multi-currency accounting system that replaced the traditional batch-oriented single-currency accounting system, successfully launched, State Street Corp. (State Street) began to focus on growing the scope of its business through new information-based value-added services. At an analyst meeting in May 1997, Marshall N. Carter, chairman and chief executive office of State Street, had announced that State Street's goal was to offer its customers a fully integrated range of products and services, from news and market data to trade settlement.
Swot Analysis of "State Street Corp.: Leading with Information Technology (B)" written by Stephen P. Bradley, Kelley Porter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Street Currency facing as an external strategic factors. Some of the topics covered in State Street Corp.: Leading with Information Technology (B) case study are - Strategic Management Strategies, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the State Street Corp.: Leading with Information Technology (B) casestudy better are - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
talent flight as more people leaving formal jobs, wage bills are increasing, etc
Introduction to SWOT Analysis of State Street Corp.: Leading with Information Technology (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in State Street Corp.: Leading with Information Technology (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Street Currency, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Street Currency 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 State Street Corp.: Leading with Information Technology (B) can be done for the following purposes –
1. Strategic planning using facts provided in State Street Corp.: Leading with Information Technology (B) case study
2. Improving business portfolio management of Street Currency
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 Street Currency
Strengths State Street Corp.: Leading with Information Technology (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Street Currency in State Street Corp.: Leading with Information Technology (B) Harvard Business Review case study are -
Strong track record of project management
– Street Currency is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Street Currency digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Street Currency 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.
High brand equity
– Street Currency has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Street Currency to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Street Currency 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 Street Currency is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in State Street Corp.: Leading with Information Technology (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Street Currency
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Street Currency does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Street Currency 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 State Street Corp.: Leading with Information Technology (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– State Street Corp.: Leading with Information Technology (B) firm has clearly differentiated products in the market place. This has enabled Street Currency to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Street Currency to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the State Street Corp.: Leading with Information Technology (B) 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.
High switching costs
– The high switching costs that Street Currency 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.
Effective Research and Development (R&D)
– Street Currency 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 State Street Corp.: Leading with Information Technology (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Street Currency 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 Stephen P. Bradley, Kelley Porter 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.
Low bargaining power of suppliers
– Suppliers of Street Currency in the sector have low bargaining power. State Street Corp.: Leading with Information Technology (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Street Currency to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses State Street Corp.: Leading with Information Technology (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of State Street Corp.: Leading with Information Technology (B) are -
Skills based hiring
– The stress on hiring functional specialists at Street Currency 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 cash cycle compare to competitors
Street Currency 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Street Currency 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.
No frontier risks strategy
– After analyzing the HBR case study State Street Corp.: Leading with Information Technology (B), it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 Street Currency supply chain. Even after few cautionary changes mentioned in the HBR case study - State Street Corp.: Leading with Information Technology (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Street Currency vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Street Currency, firm in the HBR case study State Street Corp.: Leading with Information Technology (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study State Street Corp.: Leading with Information Technology (B), is just above the industry average. Street Currency 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the State Street Corp.: Leading with Information Technology (B) 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 Street Currency has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study State Street Corp.: Leading with Information Technology (B) 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 Street Currency 's lucrative customers.
Interest costs
– Compare to the competition, Street Currency 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 State Street Corp.: Leading with Information Technology (B) HBR case study mentions - Street Currency 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.
Opportunities State Street Corp.: Leading with Information Technology (B) | 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 State Street Corp.: Leading with Information Technology (B) are -
Loyalty marketing
– Street Currency 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 Street Currency 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 Street Currency to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Street Currency is facing challenges because of the dominance of functional experts in the organization. State Street Corp.: Leading with Information Technology (B) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Street Currency 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.
Developing new processes and practices
– Street Currency 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.
Building a culture of innovation
– managers at Street Currency 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Street Currency can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Street Currency can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Street Currency has opened avenues for new revenue streams for the organization in the industry. This can help Street Currency to build a more holistic ecosystem as suggested in the State Street Corp.: Leading with Information Technology (B) case study. Street Currency can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Street Currency in the consumer business. Now Street Currency can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Street Currency can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. State Street Corp.: Leading with Information Technology (B) 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.
Leveraging digital technologies
– Street Currency 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Street Currency can use these opportunities to build new business models that can help the communities that Street Currency operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats State Street Corp.: Leading with Information Technology (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study State Street Corp.: Leading with Information Technology (B) are -
Stagnating economy with rate increase
– Street Currency 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Street Currency 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 State Street Corp.: Leading with Information Technology (B) .
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. Street Currency 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.
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 Street Currency business can come under increasing regulations regarding data privacy, data security, 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 Street Currency 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. Street Currency can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Street Currency
– 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 Street Currency.
Technology acceleration in Forth Industrial Revolution
– Street Currency has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Street Currency needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Street Currency 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.
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. Street Currency needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Street Currency is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Street Currency 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.
Weighted SWOT Analysis of State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 State Street Corp.: Leading with Information Technology (B) 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 Street Currency needs to make to build a sustainable competitive advantage.