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 energy prices, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Yodlee Verticalone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yodlee Verticalone 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.
Highly skilled collaborators
– Yodlee Verticalone has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Yodlee Inc.--The VerticalOne Integration (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
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.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Yodlee Verticalone 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.
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.
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.
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.
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.
High cash cycle compare to competitors
Yodlee Verticalone has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Yodlee Inc.--The VerticalOne Integration (A), is just above the industry average. Yodlee Verticalone 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.
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 -
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.
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.
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.
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.
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. Yodlee Verticalone 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. Yodlee Verticalone 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Yodlee Verticalone 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.
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.