Case Study Description of Cowen Inc.: Leveraging Data
Cowen Inc.'s broker-dealer, Cowen and Company, LLC, boasted a number of analysts who had made prescient stock calls on the basis of creative data analysis. Now Cowen Inc. had opened a new subsidiary, Kyber, which would attempt to monetize new data science products. Robert Fagin, head of research, had to consider what Kyber's risks were, even as the unit opened the possibility up for new revenue streams. How could Cowen continue to exploit its competitive advantage with data?
Authors :: Boris Groysberg, Sarah L. Abbott, Annelena Lobb
Swot Analysis of "Cowen Inc.: Leveraging Data" written by Boris Groysberg, Sarah L. Abbott, Annelena Lobb includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cowen Data facing as an external strategic factors. Some of the topics covered in Cowen Inc.: Leveraging Data case study are - Strategic Management Strategies, Competitive strategy, Financial management, Operations and Organizational Development.
Some of the macro environment factors that can be used to understand the Cowen Inc.: Leveraging Data casestudy better are - – there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing household debt because of falling income levels, wage bills are increasing, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Cowen Inc.: Leveraging Data
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cowen Inc.: Leveraging Data case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cowen Data, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cowen Data 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 Cowen Inc.: Leveraging Data can be done for the following purposes –
1. Strategic planning using facts provided in Cowen Inc.: Leveraging Data case study
2. Improving business portfolio management of Cowen Data
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cowen Data
Strengths Cowen Inc.: Leveraging Data | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cowen Data in Cowen Inc.: Leveraging Data Harvard Business Review case study are -
Sustainable margins compare to other players in Organizational Development industry
– Cowen Inc.: Leveraging Data firm has clearly differentiated products in the market place. This has enabled Cowen Data to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Cowen Data to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Cowen Data in the sector have low bargaining power. Cowen Inc.: Leveraging Data has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cowen Data to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Cowen Data has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cowen Data to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Cowen Data 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.
Innovation driven organization
– Cowen Data is one of the most innovative firm in sector. Manager in Cowen Inc.: Leveraging Data Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Cowen Data in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Cowen Data digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cowen Data 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.
Training and development
– Cowen Data has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cowen Inc.: Leveraging Data 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.
Effective Research and Development (R&D)
– Cowen Data 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 Cowen Inc.: Leveraging Data - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Cowen Data 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 Cowen Inc.: Leveraging Data HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Cowen Data 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.
Operational resilience
– The operational resilience strategy in the Cowen Inc.: Leveraging Data 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.
Weaknesses Cowen Inc.: Leveraging Data | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cowen Inc.: Leveraging Data are -
High cash cycle compare to competitors
Cowen Data 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.
Increasing silos among functional specialists
– The organizational structure of Cowen Data is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Cowen Data needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cowen Data to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Cowen Inc.: Leveraging Data 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 Cowen Data 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cowen Inc.: Leveraging Data HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cowen Data has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cowen Inc.: Leveraging Data, in the dynamic environment Cowen Data has struggled to respond to the nimble upstart competition. Cowen Data has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cowen Inc.: Leveraging Data, is just above the industry average. Cowen Data 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.
Need for greater diversity
– Cowen Data 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.
Skills based hiring
– The stress on hiring functional specialists at Cowen Data has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cowen Data is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cowen Inc.: Leveraging Data can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Cowen Data, firm in the HBR case study Cowen Inc.: Leveraging Data needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Cowen Data products
– To increase the profitability and margins on the products, Cowen Data needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Cowen Inc.: Leveraging Data | 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 Cowen Inc.: Leveraging Data are -
Manufacturing automation
– Cowen Data can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Using analytics as competitive advantage
– Cowen Data 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 Cowen Inc.: Leveraging Data - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cowen Data 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, Cowen Data 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.
Developing new processes and practices
– Cowen Data can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Cowen Data to increase its market reach. Cowen Data 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cowen Data 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 Cowen Data to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Cowen Data can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Cowen Data 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 Organizational Development segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cowen Data 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. Cowen Data 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.
Leveraging digital technologies
– Cowen Data 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cowen Data can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cowen Data can use these opportunities to build new business models that can help the communities that Cowen Data operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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 Cowen Data in the consumer business. Now Cowen Data can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Cowen Inc.: Leveraging Data External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cowen Inc.: Leveraging Data are -
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. Cowen Data needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Cowen Data is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cowen Data can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cowen Inc.: Leveraging Data, Cowen Data may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Consumer confidence and its impact on Cowen Data 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cowen Data with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Cowen Data 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.
Regulatory challenges
– Cowen Data 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 Organizational Development industry regulations.
Technology acceleration in Forth Industrial Revolution
– Cowen Data has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Cowen Data needs to keep up with the evolution of technology in the Organizational Development 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cowen Data 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 Cowen Inc.: Leveraging Data .
Stagnating economy with rate increase
– Cowen Data 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.
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.
Increasing wage structure of Cowen Data
– 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 Cowen Data.
Weighted SWOT Analysis of Cowen Inc.: Leveraging Data 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 Cowen Inc.: Leveraging Data 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 Cowen Inc.: Leveraging Data 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 Cowen Inc.: Leveraging Data 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 Cowen Inc.: Leveraging Data 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 Cowen Data needs to make to build a sustainable competitive advantage.