Innovating into Active ETFs: Factor Funds Capital Management LLC SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Innovating into Active ETFs: Factor Funds Capital Management LLC
Kishore Karunakaran, President and COO of FFCM, faces a variety of challenges in launching an innovative investment management business in the rapidly evolving ETF space.
Authors :: Kenneth A. Froot, Lauren H. Cohen, Scott Waggoner
Swot Analysis of "Innovating into Active ETFs: Factor Funds Capital Management LLC" written by Kenneth A. Froot, Lauren H. Cohen, Scott Waggoner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ffcm Karunakaran facing as an external strategic factors. Some of the topics covered in Innovating into Active ETFs: Factor Funds Capital Management LLC case study are - Strategic Management Strategies, Entrepreneurial finance, Financial analysis, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Innovating into Active ETFs: Factor Funds Capital Management LLC casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing commodity prices, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Innovating into Active ETFs: Factor Funds Capital Management LLC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovating into Active ETFs: Factor Funds Capital Management LLC case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ffcm Karunakaran, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ffcm Karunakaran 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 Innovating into Active ETFs: Factor Funds Capital Management LLC can be done for the following purposes –
1. Strategic planning using facts provided in Innovating into Active ETFs: Factor Funds Capital Management LLC case study
2. Improving business portfolio management of Ffcm Karunakaran
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 Ffcm Karunakaran
Strengths Innovating into Active ETFs: Factor Funds Capital Management LLC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ffcm Karunakaran in Innovating into Active ETFs: Factor Funds Capital Management LLC Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Ffcm Karunakaran 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 Ffcm Karunakaran 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 Ffcm Karunakaran in the sector have low bargaining power. Innovating into Active ETFs: Factor Funds Capital Management LLC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ffcm Karunakaran to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Ffcm Karunakaran 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 Ffcm Karunakaran is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Innovating into Active ETFs: Factor Funds Capital Management LLC Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Ffcm Karunakaran 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
– Ffcm Karunakaran is one of the leading recruiters in the industry. Managers in the Innovating into Active ETFs: Factor Funds Capital Management LLC are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Ffcm Karunakaran is present in almost all the verticals within the industry. This has provided firm in Innovating into Active ETFs: Factor Funds Capital Management LLC case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Ffcm Karunakaran
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ffcm Karunakaran does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Ffcm Karunakaran 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
– Ffcm Karunakaran is one of the most innovative firm in sector. Manager in Innovating into Active ETFs: Factor Funds Capital Management LLC Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Ffcm Karunakaran 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 Kenneth A. Froot, Lauren H. Cohen, Scott Waggoner 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.
Highly skilled collaborators
– Ffcm Karunakaran 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 Innovating into Active ETFs: Factor Funds Capital Management LLC HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Ffcm Karunakaran has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovating into Active ETFs: Factor Funds Capital Management LLC 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.
Weaknesses Innovating into Active ETFs: Factor Funds Capital Management LLC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovating into Active ETFs: Factor Funds Capital Management LLC are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Innovating into Active ETFs: Factor Funds Capital Management LLC, it seems that the employees of Ffcm Karunakaran 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.
Skills based hiring
– The stress on hiring functional specialists at Ffcm Karunakaran 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 decision making process
– As mentioned earlier in the report, Ffcm Karunakaran 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. Ffcm Karunakaran 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.
Increasing silos among functional specialists
– The organizational structure of Ffcm Karunakaran is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Ffcm Karunakaran needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ffcm Karunakaran to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Ffcm Karunakaran 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.
Aligning sales with marketing
– It come across in the case study Innovating into Active ETFs: Factor Funds Capital Management LLC that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Innovating into Active ETFs: Factor Funds Capital Management LLC can leverage the sales team experience to cultivate customer relationships as Ffcm Karunakaran is planning to shift buying processes online.
Lack of clear differentiation of Ffcm Karunakaran products
– To increase the profitability and margins on the products, Ffcm Karunakaran needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Ffcm Karunakaran 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Innovating into Active ETFs: Factor Funds Capital Management LLC, is just above the industry average. Ffcm Karunakaran 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.
Low market penetration in new markets
– Outside its home market of Ffcm Karunakaran, firm in the HBR case study Innovating into Active ETFs: Factor Funds Capital Management LLC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Innovating into Active ETFs: Factor Funds Capital Management LLC, in the dynamic environment Ffcm Karunakaran has struggled to respond to the nimble upstart competition. Ffcm Karunakaran has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Innovating into Active ETFs: Factor Funds Capital Management LLC | 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 Innovating into Active ETFs: Factor Funds Capital Management LLC are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ffcm Karunakaran can use these opportunities to build new business models that can help the communities that Ffcm Karunakaran operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Ffcm Karunakaran 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. Ffcm Karunakaran 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.
Learning at scale
– Online learning technologies has now opened space for Ffcm Karunakaran to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ffcm Karunakaran is facing challenges because of the dominance of functional experts in the organization. Innovating into Active ETFs: Factor Funds Capital Management LLC 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.
Manufacturing automation
– Ffcm Karunakaran 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.
Using analytics as competitive advantage
– Ffcm Karunakaran 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 Innovating into Active ETFs: Factor Funds Capital Management LLC - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ffcm Karunakaran to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ffcm Karunakaran can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ffcm Karunakaran 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ffcm Karunakaran 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.
Developing new processes and practices
– Ffcm Karunakaran 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.
Building a culture of innovation
– managers at Ffcm Karunakaran 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.
Buying journey improvements
– Ffcm Karunakaran can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Innovating into Active ETFs: Factor Funds Capital Management LLC 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.
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 Ffcm Karunakaran 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.
Threats Innovating into Active ETFs: Factor Funds Capital Management LLC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovating into Active ETFs: Factor Funds Capital Management LLC are -
Increasing wage structure of Ffcm Karunakaran
– 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 Ffcm Karunakaran.
Regulatory challenges
– Ffcm Karunakaran 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.
High dependence on third party suppliers
– Ffcm Karunakaran 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.
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. Ffcm Karunakaran 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
– Ffcm Karunakaran 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ffcm Karunakaran 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.
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 Ffcm Karunakaran in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ffcm Karunakaran 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 Innovating into Active ETFs: Factor Funds Capital Management LLC .
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 Ffcm Karunakaran.
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 Ffcm Karunakaran 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.
Environmental challenges
– Ffcm Karunakaran 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. Ffcm Karunakaran can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Innovating into Active ETFs: Factor Funds Capital Management LLC, Ffcm Karunakaran 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 .
Weighted SWOT Analysis of Innovating into Active ETFs: Factor Funds Capital Management LLC 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 Innovating into Active ETFs: Factor Funds Capital Management LLC 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 Innovating into Active ETFs: Factor Funds Capital Management LLC 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 Innovating into Active ETFs: Factor Funds Capital Management LLC 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 Innovating into Active ETFs: Factor Funds Capital Management LLC 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 Ffcm Karunakaran needs to make to build a sustainable competitive advantage.