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 - – wage bills are increasing, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, 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 -
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.
High brand equity
– Yodlee Verticalone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yodlee Verticalone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Operational resilience
– The operational resilience strategy in the Yodlee Inc.--The VerticalOne Integration (A) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Yodlee Verticalone 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 John Melnyk, Darren Meister 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.
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.
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.
Strong track record of project management
– Yodlee Verticalone 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 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.
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.
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.
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.
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 Yodlee Verticalone supply chain. Even after few cautionary changes mentioned in the HBR case study - Yodlee Inc.--The VerticalOne Integration (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yodlee Verticalone vulnerable to further global disruptions in South East Asia.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, John Melnyk, Darren Meister suggests that, Yodlee Verticalone is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 strategic competitive environment developments
– As Yodlee Inc.--The VerticalOne Integration (A) HBR case study mentions - Yodlee Verticalone 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.
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.
Slow decision making process
– As mentioned earlier in the report, Yodlee Verticalone 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. Yodlee Verticalone 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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Yodlee Verticalone 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.
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 -
Manufacturing automation
– Yodlee Verticalone 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.
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.
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.
Creating value in data economy
– The success of analytics program of Yodlee Verticalone has opened avenues for new revenue streams for the organization in the industry. This can help Yodlee Verticalone to build a more holistic ecosystem as suggested in the Yodlee Inc.--The VerticalOne Integration (A) case study. Yodlee Verticalone can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Developing new processes and practices
– Yodlee Verticalone 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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Yodlee Verticalone to increase its market reach. Yodlee Verticalone 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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Yodlee Verticalone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 -
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.
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.
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 Yodlee Verticalone.
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.
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) .
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Yodlee Inc.--The VerticalOne Integration (A), Yodlee Verticalone 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 .
High dependence on third party suppliers
– Yodlee Verticalone 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Yodlee Verticalone is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Yodlee Verticalone 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.
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.