Case Study Description of Powershares Exchange-Traded Funds
In early January, 2009 the president of Invesco Trimark Ltd. (Invesco Trimark) was optimistic about the year ahead, particularly when compared to "the perfect storm" of 2008. That year saw global investment markets in turmoil, and Invesco Trimark's mutual fund assets had plummeted to almost half its value. The president and his team had spent nearly a year working and re-working a new product launch and by 2009 thought they had developed a unique and differentiated idea that would be difficult for the competition to replicate. This idea was to introduce to the Canadian market a suite of exchange-traded funds (ETFs) built around investments managed by Invesco Trimark's sister company in the United States. This new product combined key features of ETFs traded on U.S. exchanges with key features of Canadian mutual funds. As innovative and exciting as ETFs promised to be, the president knew that it would be met with reservation from Invesco Trimark's traditional mutual fund distributors who remained skeptical. The president wondered how best to communicate the new product idea given the contradictory and competing ideas that existed not only in the market but in his own firm. Was it possible for mutual funds and ETFs to co-exist?
Swot Analysis of "Powershares Exchange-Traded Funds" written by Chuck Grace, Samir Haji Remtulla includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Invesco Etfs facing as an external strategic factors. Some of the topics covered in Powershares Exchange-Traded Funds case study are - Strategic Management Strategies, Financial markets, Product development and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Powershares Exchange-Traded Funds casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs, there is backlash against globalization, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Powershares Exchange-Traded Funds
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Powershares Exchange-Traded Funds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Invesco Etfs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Invesco Etfs 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 Powershares Exchange-Traded Funds can be done for the following purposes –
1. Strategic planning using facts provided in Powershares Exchange-Traded Funds case study
2. Improving business portfolio management of Invesco Etfs
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 Invesco Etfs
Strengths Powershares Exchange-Traded Funds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Invesco Etfs in Powershares Exchange-Traded Funds Harvard Business Review case study are -
Analytics focus
– Invesco Etfs 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 Chuck Grace, Samir Haji Remtulla 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.
Successful track record of launching new products
– Invesco Etfs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Invesco Etfs 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.
Low bargaining power of suppliers
– Suppliers of Invesco Etfs in the sector have low bargaining power. Powershares Exchange-Traded Funds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Invesco Etfs to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Invesco Etfs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Invesco Etfs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Invesco Etfs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Powershares Exchange-Traded Funds 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.
Cross disciplinary teams
– Horizontal connected teams at the Invesco Etfs 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Invesco Etfs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Invesco Etfs 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 Powershares Exchange-Traded Funds 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.
High switching costs
– The high switching costs that Invesco Etfs 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.
Ability to recruit top talent
– Invesco Etfs is one of the leading recruiters in the industry. Managers in the Powershares Exchange-Traded Funds 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
– Invesco Etfs 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 Invesco Etfs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Invesco Etfs 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 Powershares Exchange-Traded Funds HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Powershares Exchange-Traded Funds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Powershares Exchange-Traded Funds are -
Workers concerns about automation
– As automation is fast increasing in the segment, Invesco Etfs 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.
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 Invesco Etfs supply chain. Even after few cautionary changes mentioned in the HBR case study - Powershares Exchange-Traded Funds, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Invesco Etfs vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Invesco Etfs products
– To increase the profitability and margins on the products, Invesco Etfs needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Powershares Exchange-Traded Funds, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Powershares Exchange-Traded Funds 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 Invesco Etfs 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 Powershares Exchange-Traded Funds, in the dynamic environment Invesco Etfs has struggled to respond to the nimble upstart competition. Invesco Etfs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Invesco Etfs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Powershares Exchange-Traded Funds can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Powershares Exchange-Traded Funds HBR case study mentions - Invesco Etfs takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Invesco Etfs 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.
Low market penetration in new markets
– Outside its home market of Invesco Etfs, firm in the HBR case study Powershares Exchange-Traded Funds needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Invesco Etfs 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 Powershares Exchange-Traded Funds | 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 Powershares Exchange-Traded Funds are -
Buying journey improvements
– Invesco Etfs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Powershares Exchange-Traded Funds 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
– Invesco Etfs 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.
Creating value in data economy
– The success of analytics program of Invesco Etfs has opened avenues for new revenue streams for the organization in the industry. This can help Invesco Etfs to build a more holistic ecosystem as suggested in the Powershares Exchange-Traded Funds case study. Invesco Etfs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Invesco Etfs in the consumer business. Now Invesco Etfs can target international markets with far fewer capital restrictions requirements than the existing system.
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 Invesco Etfs 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 Invesco Etfs 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.
Leveraging digital technologies
– Invesco Etfs 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Invesco Etfs 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, Powershares Exchange-Traded Funds, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Invesco Etfs 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Invesco Etfs can use these opportunities to build new business models that can help the communities that Invesco Etfs operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Invesco Etfs is facing challenges because of the dominance of functional experts in the organization. Powershares Exchange-Traded Funds 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.
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. Invesco Etfs 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. Invesco Etfs 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 Invesco Etfs to increase its market reach. Invesco Etfs 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.
Threats Powershares Exchange-Traded Funds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Powershares Exchange-Traded Funds are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Invesco Etfs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Invesco Etfs 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 Powershares Exchange-Traded Funds .
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.
Technology acceleration in Forth Industrial Revolution
– Invesco Etfs has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Invesco Etfs 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.
High dependence on third party suppliers
– Invesco Etfs 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.
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. Invesco Etfs 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Invesco Etfs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Invesco Etfs business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Invesco Etfs
– 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 Invesco Etfs.
Regulatory challenges
– Invesco Etfs 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.
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.
Shortening product life cycle
– it is one of the major threat that Invesco Etfs is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Invesco Etfs 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. Invesco Etfs can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Powershares Exchange-Traded Funds 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 Powershares Exchange-Traded Funds 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 Powershares Exchange-Traded Funds 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 Powershares Exchange-Traded Funds 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 Powershares Exchange-Traded Funds 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 Invesco Etfs needs to make to build a sustainable competitive advantage.