Case Study Description of Yodlee Inc.--The VerticalOne Integration (A)
Yodlee is pioneering an emerging technology, "account aggregation," that allows Internet users to authenticate only once to have access to personal, password-protected account data from many sources. Yodlee offers this technology on a cobranded application service provider basis, primarily to financial institutions. In January 2001, the company acquired its only significant competitor, VerticalOne; the combined entity has almost 100 accounts, but 25 installed clients are on the VerticalOne platform. Yodlee managers must devise a plan to integrate VerticalOne into Yodlee and migrate the installed base of VerticalOne clients to the Yodlee platform.
Swot Analysis of "Yodlee Inc.--The VerticalOne Integration (A)" written by John Melnyk, Darren Meister includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yodlee Verticalone facing as an external strategic factors. Some of the topics covered in Yodlee Inc.--The VerticalOne Integration (A) case study are - Strategic Management Strategies, Mergers & acquisitions, Strategic planning, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the Yodlee Inc.--The VerticalOne Integration (A) casestudy better are - – increasing commodity prices, there is backlash against globalization, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, wage bills are increasing, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Yodlee Inc.--The VerticalOne Integration (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yodlee Inc.--The VerticalOne Integration (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yodlee Verticalone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yodlee Verticalone 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 Yodlee Inc.--The VerticalOne Integration (A) can be done for the following purposes –
1. Strategic planning using facts provided in Yodlee Inc.--The VerticalOne Integration (A) case study
2. Improving business portfolio management of Yodlee Verticalone
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 Yodlee Verticalone
Strengths Yodlee Inc.--The VerticalOne Integration (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yodlee Verticalone in Yodlee Inc.--The VerticalOne Integration (A) Harvard Business Review case study are -
Innovation driven organization
– Yodlee Verticalone is one of the most innovative firm in sector. Manager in Yodlee Inc.--The VerticalOne Integration (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Yodlee Verticalone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yodlee Verticalone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Yodlee Verticalone 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 Yodlee Verticalone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Yodlee Inc.--The VerticalOne Integration (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Yodlee Verticalone is one of the leading recruiters in the industry. Managers in the Yodlee Inc.--The VerticalOne Integration (A) 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 Technology & Operations field
– Yodlee Verticalone 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 Yodlee Verticalone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Yodlee Verticalone 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.
Superior customer experience
– The customer experience strategy of Yodlee Verticalone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Yodlee Verticalone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yodlee Verticalone 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.
Effective Research and Development (R&D)
– Yodlee Verticalone 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 Yodlee Inc.--The VerticalOne Integration (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Yodlee Verticalone is present in almost all the verticals within the industry. This has provided firm in Yodlee Inc.--The VerticalOne Integration (A) 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.
Training and development
– Yodlee Verticalone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Yodlee Inc.--The VerticalOne Integration (A) 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.
Sustainable margins compare to other players in Technology & Operations industry
– Yodlee Inc.--The VerticalOne Integration (A) firm has clearly differentiated products in the market place. This has enabled Yodlee Verticalone to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Yodlee Verticalone to invest into research and development (R&D) and innovation.
Weaknesses Yodlee Inc.--The VerticalOne Integration (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yodlee Inc.--The VerticalOne Integration (A) are -
Increasing silos among functional specialists
– The organizational structure of Yodlee Verticalone is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Yodlee Verticalone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yodlee Verticalone to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Inc.--The VerticalOne Integration (A) can leverage the sales team experience to cultivate customer relationships as Yodlee Verticalone is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yodlee Verticalone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Yodlee Inc.--The VerticalOne Integration (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Yodlee Inc.--The VerticalOne Integration (A), in the dynamic environment Yodlee Verticalone has struggled to respond to the nimble upstart competition. Yodlee Verticalone has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Verticalone 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Yodlee Inc.--The VerticalOne Integration (A), it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Yodlee Verticalone 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.
Interest costs
– Compare to the competition, Yodlee Verticalone 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.
Need for greater diversity
– Yodlee Verticalone 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.
Low market penetration in new markets
– Outside its home market of Yodlee Verticalone, firm in the HBR case study Yodlee Inc.--The VerticalOne Integration (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Yodlee Inc.--The VerticalOne Integration (A), it seems that the employees of Yodlee Verticalone 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.
Opportunities Yodlee Inc.--The VerticalOne Integration (A) | 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 Yodlee Inc.--The VerticalOne Integration (A) are -
Learning at scale
– Online learning technologies has now opened space for Yodlee Verticalone 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yodlee Verticalone 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 Yodlee Verticalone to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Yodlee Verticalone 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.
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. Yodlee Verticalone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yodlee Verticalone 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yodlee Verticalone is facing challenges because of the dominance of functional experts in the organization. Yodlee Inc.--The VerticalOne Integration (A) 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.
Using analytics as competitive advantage
– Yodlee Verticalone 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 Yodlee Inc.--The VerticalOne Integration (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yodlee Verticalone 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 Yodlee Verticalone in the consumer business. Now Yodlee Verticalone can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Yodlee Verticalone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yodlee Inc.--The VerticalOne Integration (A) 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.
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 Yodlee Verticalone 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yodlee Verticalone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Yodlee Verticalone 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yodlee Verticalone can use these opportunities to build new business models that can help the communities that Yodlee Verticalone operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Yodlee Inc.--The VerticalOne Integration (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yodlee Inc.--The VerticalOne Integration (A) are -
Increasing wage structure of Yodlee Verticalone
– 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 Yodlee Verticalone.
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. Yodlee Verticalone 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yodlee Verticalone 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 Yodlee Inc.--The VerticalOne Integration (A) .
Technology acceleration in Forth Industrial Revolution
– Yodlee Verticalone has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Yodlee Verticalone 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.
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 Yodlee Verticalone business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Yodlee Verticalone 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. Yodlee Verticalone can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Consumer confidence and its impact on Yodlee Verticalone 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.
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 Yodlee Verticalone in the Technology & Operations sector and impact the bottomline of the organization.
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. Yodlee Verticalone 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yodlee Verticalone 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 Yodlee Verticalone 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.
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. Yodlee Verticalone needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Inc.--The VerticalOne Integration (A) 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 Yodlee Verticalone needs to make to build a sustainable competitive advantage.
