Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company
The case describes how Wealthfront, a financial technology ("Fintech") start-up, aims to disrupt the financial advisory field with a novel approach-fully automated robot advisers. The core value introduced by Wealthfront is to drastically improve the delivery efficiency and effectiveness of financial advisory services. It is a classic example of process innovation, for which leading economists such as Joseph Schumpeter and many others have developed theoretical models and empirical studies. The instructor can extend the fundamental economic rationale to other phenomena such as driverless cars or robot reporters. From a practitioner's perspective, the instructor can stimulate discussion on how the recent wave of Fintech differs from previous financial innovations.1 The instructor can also ask students to examine how contextual factors such as early adopters and competitive dynamics separately or jointly influence company decision-making and outcomes. The instructor can connect this case to popular phrases such as "innovator's dilemma" and "crossing the chasm."
Swot Analysis of "Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company" written by Yanfeng Zheng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wealthfront Robot facing as an external strategic factors. Some of the topics covered in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company case study are - Strategic Management Strategies, Business processes, Financial management, Growth strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wealthfront Robot, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wealthfront Robot 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company can be done for the following purposes –
1. Strategic planning using facts provided in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company case study
2. Improving business portfolio management of Wealthfront Robot
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wealthfront Robot
Strengths Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wealthfront Robot in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company Harvard Business Review case study are -
High brand equity
– Wealthfront Robot has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wealthfront Robot to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Wealthfront Robot 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company firm has clearly differentiated products in the market place. This has enabled Wealthfront Robot to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Wealthfront Robot to invest into research and development (R&D) and innovation.
Training and development
– Wealthfront Robot has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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.
Innovation driven organization
– Wealthfront Robot is one of the most innovative firm in sector. Manager in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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.
Successful track record of launching new products
– Wealthfront Robot has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wealthfront Robot 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 Wealthfront Robot in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Wealthfront Robot 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 Wealthfront Robot is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Wealthfront Robot is one of the leading recruiters in the industry. Managers in the Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Finance & Accounting field
– Wealthfront Robot 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 Wealthfront Robot in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Wealthfront Robot in the sector have low bargaining power. Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wealthfront Robot to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company are -
Need for greater diversity
– Wealthfront Robot 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company, in the dynamic environment Wealthfront Robot has struggled to respond to the nimble upstart competition. Wealthfront Robot 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, Yanfeng Zheng suggests that, Wealthfront Robot 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.
Interest costs
– Compare to the competition, Wealthfront Robot 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.
Slow decision making process
– As mentioned earlier in the report, Wealthfront Robot 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. Wealthfront Robot 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.
High cash cycle compare to competitors
Wealthfront Robot 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company, it seems that the employees of Wealthfront Robot 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.
Increasing silos among functional specialists
– The organizational structure of Wealthfront Robot is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Wealthfront Robot needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wealthfront Robot to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Wealthfront Robot 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.
Products dominated business model
– Even though Wealthfront Robot has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Wealthfront Robot, firm in the HBR case study Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company | 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company are -
Using analytics as competitive advantage
– Wealthfront Robot 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wealthfront Robot to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Wealthfront Robot 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 Finance & Accounting 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, Wealthfront Robot can use these opportunities to build new business models that can help the communities that Wealthfront Robot operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Wealthfront Robot can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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.
Loyalty marketing
– Wealthfront Robot 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wealthfront Robot 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 Wealthfront Robot to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Wealthfront Robot can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wealthfront Robot in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wealthfront Robot 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
– Wealthfront Robot can develop new processes and procedures in Finance & Accounting 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.
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 Wealthfront Robot 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wealthfront Robot 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. Wealthfront Robot 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wealthfront Robot can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company are -
High dependence on third party suppliers
– Wealthfront Robot 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
– Wealthfront Robot has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Wealthfront Robot needs to keep up with the evolution of technology in the Finance & Accounting 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company, Wealthfront Robot may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wealthfront Robot in the Finance & Accounting industry. The Finance & Accounting 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.
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 Wealthfront Robot.
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.
Consumer confidence and its impact on Wealthfront Robot 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.
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. Wealthfront Robot needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Wealthfront Robot 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 Wealthfront Robot with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wealthfront Robot 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company .
Regulatory challenges
– Wealthfront Robot 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 Finance & Accounting industry regulations.
Environmental challenges
– Wealthfront Robot 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. Wealthfront Robot can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront: Buried or Breakthrough? The Story of a Robot Investment Advisory Company 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 Wealthfront Robot needs to make to build a sustainable competitive advantage.
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