Thomson Financial: Building the Customer-Centric Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Thomson Financial: Building the Customer-Centric Firm
In December 1999 Thomson Financial (TF) began a radical transformation from forty-one divisions toward a more integrated firm organized around customer segments. This required active, coordinated involvement from business, organization, and technology functions, as well as sustained investment and execution through the crises of the technology market crash and September 11, 2001. By 2005 TF had emerged as one of the top three financial information firms globally (with Bloomberg and Reuters).
Swot Analysis of "Thomson Financial: Building the Customer-Centric Firm" written by Robert C. Wolcott, Mohanbir Sawhney includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tf Thomson facing as an external strategic factors. Some of the topics covered in Thomson Financial: Building the Customer-Centric Firm case study are - Strategic Management Strategies, Competitive strategy, Customers, Financial management, Organizational culture, Sales, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Thomson Financial: Building the Customer-Centric Firm casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Thomson Financial: Building the Customer-Centric Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Thomson Financial: Building the Customer-Centric Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tf Thomson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tf Thomson 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 Thomson Financial: Building the Customer-Centric Firm can be done for the following purposes –
1. Strategic planning using facts provided in Thomson Financial: Building the Customer-Centric Firm case study
2. Improving business portfolio management of Tf Thomson
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 Tf Thomson
Strengths Thomson Financial: Building the Customer-Centric Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tf Thomson in Thomson Financial: Building the Customer-Centric Firm Harvard Business Review case study are -
Highly skilled collaborators
– Tf Thomson 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 Thomson Financial: Building the Customer-Centric Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Tf Thomson is one of the leading recruiters in the industry. Managers in the Thomson Financial: Building the Customer-Centric Firm are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Strategy & Execution field
– Tf Thomson 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 Tf Thomson in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Thomson Financial: Building the Customer-Centric Firm firm has clearly differentiated products in the market place. This has enabled Tf Thomson to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tf Thomson to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Tf Thomson is present in almost all the verticals within the industry. This has provided firm in Thomson Financial: Building the Customer-Centric Firm 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.
Innovation driven organization
– Tf Thomson is one of the most innovative firm in sector. Manager in Thomson Financial: Building the Customer-Centric Firm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Tf Thomson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Thomson Financial: Building the Customer-Centric Firm Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Tf Thomson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tf Thomson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Tf Thomson in the sector have low bargaining power. Thomson Financial: Building the Customer-Centric Firm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tf Thomson to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Tf Thomson 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 Thomson Financial: Building the Customer-Centric Firm - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Tf Thomson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tf Thomson 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 Tf Thomson in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Thomson Financial: Building the Customer-Centric Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Thomson Financial: Building the Customer-Centric Firm are -
Aligning sales with marketing
– It come across in the case study Thomson Financial: Building the Customer-Centric Firm 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 Thomson Financial: Building the Customer-Centric Firm can leverage the sales team experience to cultivate customer relationships as Tf Thomson is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Thomson Financial: Building the Customer-Centric Firm 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 Tf Thomson has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Tf Thomson 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. Tf Thomson 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.
Low market penetration in new markets
– Outside its home market of Tf Thomson, firm in the HBR case study Thomson Financial: Building the Customer-Centric Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Tf Thomson is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tf Thomson needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tf Thomson to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Tf Thomson has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 Tf Thomson supply chain. Even after few cautionary changes mentioned in the HBR case study - Thomson Financial: Building the Customer-Centric Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tf Thomson vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Tf Thomson products
– To increase the profitability and margins on the products, Tf Thomson needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Tf Thomson 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.
Slow to strategic competitive environment developments
– As Thomson Financial: Building the Customer-Centric Firm HBR case study mentions - Tf Thomson 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tf Thomson 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.
Opportunities Thomson Financial: Building the Customer-Centric Firm | 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 Thomson Financial: Building the Customer-Centric Firm are -
Better consumer reach
– The expansion of the 5G network will help Tf Thomson to increase its market reach. Tf Thomson 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.
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. Tf Thomson 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. Tf Thomson 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.
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 Tf Thomson in the consumer business. Now Tf Thomson can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Tf Thomson 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tf Thomson can use these opportunities to build new business models that can help the communities that Tf Thomson operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Tf Thomson 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.
Learning at scale
– Online learning technologies has now opened space for Tf Thomson 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Tf Thomson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tf Thomson is facing challenges because of the dominance of functional experts in the organization. Thomson Financial: Building the Customer-Centric Firm 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.
Buying journey improvements
– Tf Thomson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Thomson Financial: Building the Customer-Centric Firm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tf Thomson 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, Thomson Financial: Building the Customer-Centric Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tf Thomson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tf Thomson 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 Tf Thomson to hire the very best people irrespective of their geographical location.
Threats Thomson Financial: Building the Customer-Centric Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Thomson Financial: Building the Customer-Centric Firm are -
Environmental challenges
– Tf Thomson 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. Tf Thomson can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Tf Thomson 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.
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. Tf Thomson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tf Thomson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tf Thomson 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.
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. Tf Thomson 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.
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 Tf Thomson.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Thomson Financial: Building the Customer-Centric Firm, Tf Thomson may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tf Thomson needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Tf Thomson 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.
Technology acceleration in Forth Industrial Revolution
– Tf Thomson has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tf Thomson 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.
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.
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 Tf Thomson in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Thomson Financial: Building the Customer-Centric Firm 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 Thomson Financial: Building the Customer-Centric Firm 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 Thomson Financial: Building the Customer-Centric Firm 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 Thomson Financial: Building the Customer-Centric Firm 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 Thomson Financial: Building the Customer-Centric Firm 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 Tf Thomson needs to make to build a sustainable competitive advantage.