Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
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 - – increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing commodity prices, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, 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.
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.
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.
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.
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.
Successful track record of launching new products
– Pottruck Schwab has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pottruck Schwab 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.
Superior customer experience
– The customer experience strategy of Pottruck Schwab in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Diverse revenue streams
– Pottruck Schwab is present in almost all the verticals within the industry. This has provided firm in Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the 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.
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.
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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pottruck Schwab is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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 Pottruck Schwab 's lucrative customers.
Interest costs
– Compare to the competition, Pottruck Schwab 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.
Increasing silos among functional specialists
– The organizational structure of Pottruck Schwab is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Pottruck Schwab needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pottruck Schwab to focus more on services rather than just following the product oriented approach.
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 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.
Skills based hiring
– The stress on hiring functional specialists at Pottruck Schwab 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.
Slow decision making process
– As mentioned earlier in the report, Pottruck Schwab 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. Pottruck Schwab 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.
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.
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.
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 -
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.
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 Pottruck Schwab 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pottruck Schwab 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 Pottruck Schwab to hire the very best people irrespective of their geographical location.
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.
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.
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.
Loyalty marketing
– Pottruck Schwab 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.
Buying journey improvements
– Pottruck Schwab can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Charles Schwab Corp.: A Presentation by David Pottruck Co-CEO, Video 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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Pottruck Schwab 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.
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.
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 -
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 Pottruck Schwab 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 Pottruck Schwab in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on Pottruck Schwab 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.
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.
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 .
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 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.
Environmental challenges
– Pottruck Schwab 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. Pottruck Schwab can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Stagnating economy with rate increase
– Pottruck Schwab 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pottruck Schwab with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Pottruck Schwab 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.
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.
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.
