Morgan Stanley: Positioning to Be the Sustainability Finance Leader SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Morgan Stanley: Positioning to Be the Sustainability Finance Leader
It is five years since the Great Recession, and Morgan Stanley and its competitors are still trying to regain the confidence of investors. To that end, James Gorman, Morgan Stanley CEO and chairman, has taken the bold step of creating an institute for sustainable investing, for which Morgan Stanley will provide the initial $1 billion of investment capital in hopes of raising 10 times that amount. The pledge is the largest to date from an impact fund - toping Goldman Sachs' $250-million social impact fund as well as initiatives by UBS and JP Morgan & Chase. Students are tasked with assessing the plan's rollout and comparing and contrasting Morgan Stanley's strategy to that of its competitors. They are ultimately asked to answer the question of whether investment banking firms can drive sustainability in the marketplace.
Swot Analysis of "Morgan Stanley: Positioning to Be the Sustainability Finance Leader" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Morgan Stanley facing as an external strategic factors. Some of the topics covered in Morgan Stanley: Positioning to Be the Sustainability Finance Leader case study are - Strategic Management Strategies, Financial management, Growth strategy, Operations management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Morgan Stanley: Positioning to Be the Sustainability Finance Leader casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing commodity prices,
increasing transportation and logistics costs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Morgan Stanley: Positioning to Be the Sustainability Finance Leader
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Morgan Stanley: Positioning to Be the Sustainability Finance Leader case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Morgan Stanley, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Morgan Stanley 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader can be done for the following purposes –
1. Strategic planning using facts provided in Morgan Stanley: Positioning to Be the Sustainability Finance Leader case study
2. Improving business portfolio management of Morgan Stanley
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 Morgan Stanley
Strengths Morgan Stanley: Positioning to Be the Sustainability Finance Leader | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Morgan Stanley in Morgan Stanley: Positioning to Be the Sustainability Finance Leader Harvard Business Review case study are -
Successful track record of launching new products
– Morgan Stanley has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Morgan Stanley 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Morgan Stanley: Positioning to Be the Sustainability Finance Leader firm has clearly differentiated products in the market place. This has enabled Morgan Stanley to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Morgan Stanley to invest into research and development (R&D) and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Morgan Stanley digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Morgan Stanley 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.
Operational resilience
– The operational resilience strategy in the Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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.
Superior customer experience
– The customer experience strategy of Morgan Stanley in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Morgan Stanley has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Morgan Stanley to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Morgan Stanley is one of the most innovative firm in sector. Manager in Morgan Stanley: Positioning to Be the Sustainability Finance Leader Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Morgan Stanley 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.
Organizational Resilience of Morgan Stanley
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Morgan Stanley does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Morgan Stanley in the sector have low bargaining power. Morgan Stanley: Positioning to Be the Sustainability Finance Leader has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Morgan Stanley to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Morgan Stanley 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 Morgan Stanley is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Morgan Stanley: Positioning to Be the Sustainability Finance Leader Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Morgan Stanley 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 Andrew Hoffman 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.
Weaknesses Morgan Stanley: Positioning to Be the Sustainability Finance Leader | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Morgan Stanley: Positioning to Be the Sustainability Finance Leader are -
Slow decision making process
– As mentioned earlier in the report, Morgan Stanley 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. Morgan Stanley 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.
Skills based hiring
– The stress on hiring functional specialists at Morgan Stanley 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrew Hoffman suggests that, Morgan Stanley 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.
Lack of clear differentiation of Morgan Stanley products
– To increase the profitability and margins on the products, Morgan Stanley needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Morgan Stanley: Positioning to Be the Sustainability Finance Leader, it seems that the employees of Morgan Stanley 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 Morgan Stanley, firm in the HBR case study Morgan Stanley: Positioning to Be the Sustainability Finance Leader needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Morgan Stanley 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.
Interest costs
– Compare to the competition, Morgan Stanley 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.
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 Morgan Stanley supply chain. Even after few cautionary changes mentioned in the HBR case study - Morgan Stanley: Positioning to Be the Sustainability Finance Leader, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Morgan Stanley vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Morgan Stanley 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader | 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader are -
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. Morgan Stanley can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Morgan Stanley to increase its market reach. Morgan Stanley 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 Morgan Stanley can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Morgan Stanley can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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 Morgan Stanley in the consumer business. Now Morgan Stanley can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Morgan Stanley 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.
Creating value in data economy
– The success of analytics program of Morgan Stanley has opened avenues for new revenue streams for the organization in the industry. This can help Morgan Stanley to build a more holistic ecosystem as suggested in the Morgan Stanley: Positioning to Be the Sustainability Finance Leader case study. Morgan Stanley can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Morgan Stanley is facing challenges because of the dominance of functional experts in the organization. Morgan Stanley: Positioning to Be the Sustainability Finance Leader case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Morgan Stanley 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Morgan Stanley 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Morgan Stanley can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Morgan Stanley 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, Morgan Stanley: Positioning to Be the Sustainability Finance Leader, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Morgan Stanley 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.
Threats Morgan Stanley: Positioning to Be the Sustainability Finance Leader External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Morgan Stanley: Positioning to Be the Sustainability Finance Leader are -
Technology acceleration in Forth Industrial Revolution
– Morgan Stanley has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Morgan Stanley 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader, Morgan Stanley 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 Morgan Stanley 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.
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.
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 Morgan Stanley.
Shortening product life cycle
– it is one of the major threat that Morgan Stanley is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Morgan Stanley 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.
Environmental challenges
– Morgan Stanley 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. Morgan Stanley can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Morgan Stanley 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 Morgan Stanley with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Morgan Stanley in the Finance & Accounting sector and impact the bottomline 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. Morgan Stanley needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley: Positioning to Be the Sustainability Finance Leader 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 Morgan Stanley needs to make to build a sustainable competitive advantage.
