Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video
David Pottruck, Co-CEO of Charles Schwab Corp., discusses the company's information technology and competitive strategy with an Executive Education (Program for Management Development) class at Harvard Business School, October 22, 1999.
Swot Analysis of "Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video" written by F. Warren McFarlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pottruck Schwab facing as an external strategic factors. Some of the topics covered in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video case study are - Strategic Management Strategies, Competitive strategy, IT, Marketing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video casestudy better are - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pottruck Schwab, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pottruck Schwab 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video can be done for the following purposes –
1. Strategic planning using facts provided in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video case study
2. Improving business portfolio management of Pottruck Schwab
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pottruck Schwab
Strengths Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pottruck Schwab in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video Harvard Business Review case study are -
High switching costs
– The high switching costs that Pottruck Schwab has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Pottruck Schwab in the sector have low bargaining power. Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pottruck Schwab to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video firm has clearly differentiated products in the market place. This has enabled Pottruck Schwab to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Pottruck Schwab to invest into research and development (R&D) and innovation.
Training and development
– Pottruck Schwab has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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.
Cross disciplinary teams
– Horizontal connected teams at the Pottruck Schwab 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.
Organizational Resilience of Pottruck Schwab
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pottruck Schwab does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Pottruck Schwab 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Pottruck Schwab digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pottruck Schwab 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.
Analytics focus
– Pottruck Schwab 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 F. Warren McFarlan 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.
Innovation driven organization
– Pottruck Schwab is one of the most innovative firm in sector. Manager in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Pottruck Schwab 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 lead change in Technology & Operations field
– Pottruck Schwab 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 Pottruck Schwab in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video are -
Slow to strategic competitive environment developments
– As Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video HBR case study mentions - Pottruck Schwab 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video, is just above the industry average. Pottruck Schwab 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 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 Pottruck Schwab supply chain. Even after few cautionary changes mentioned in the HBR case study - Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pottruck Schwab vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Pottruck Schwab products
– To increase the profitability and margins on the products, Pottruck Schwab needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Pottruck Schwab 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video, in the dynamic environment Pottruck Schwab has struggled to respond to the nimble upstart competition. Pottruck Schwab has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video, it seems that the employees of Pottruck Schwab 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.
Products dominated business model
– Even though Pottruck Schwab 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 - Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Pottruck Schwab 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.
Low market penetration in new markets
– Outside its home market of Pottruck Schwab, firm in the HBR case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video can leverage the sales team experience to cultivate customer relationships as Pottruck Schwab is planning to shift buying processes online.
Opportunities Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video | 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video are -
Developing new processes and practices
– Pottruck Schwab can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pottruck Schwab in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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. Pottruck Schwab can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pottruck Schwab is facing challenges because of the dominance of functional experts in the organization. Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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.
Leveraging digital technologies
– Pottruck Schwab 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pottruck Schwab 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.
Better consumer reach
– The expansion of the 5G network will help Pottruck Schwab to increase its market reach. Pottruck Schwab 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.
Building a culture of innovation
– managers at Pottruck Schwab 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 Technology & Operations segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pottruck Schwab 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. Pottruck Schwab 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.
Manufacturing automation
– Pottruck Schwab can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Using analytics as competitive advantage
– Pottruck Schwab has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pottruck Schwab to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Pottruck Schwab in the consumer business. Now Pottruck Schwab can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pottruck Schwab can use these opportunities to build new business models that can help the communities that Pottruck Schwab operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video are -
Shortening product life cycle
– it is one of the major threat that Pottruck Schwab is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Pottruck Schwab needs to understand the core reasons impacting the Technology & Operations 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, Pottruck Schwab 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video .
Regulatory challenges
– Pottruck Schwab 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 Technology & Operations industry regulations.
Technology acceleration in Forth Industrial Revolution
– Pottruck Schwab has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Pottruck Schwab needs to keep up with the evolution of technology in the Technology & Operations 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.
High dependence on third party suppliers
– Pottruck Schwab 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pottruck Schwab in the Technology & Operations industry. The Technology & Operations 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pottruck Schwab can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Pottruck Schwab
– 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 Pottruck Schwab.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video, Pottruck Schwab may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Pottruck Schwab.
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.
Weighted SWOT Analysis of Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Pottruck Schwab needs to make to build a sustainable competitive advantage.