Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy
In early July of 2008, William (Bill) Jacques, Chief Investment Officer at Martingale Asset Management, a quantitative value-oriented investment manager in Boston, Massachusetts, was busy preparing for an upcoming meeting with the group that made new product decisions within the firm. The objective of the meeting was to review the backtesting and real-time investment results of a new minimum-variance strategy within the framework of a 130/30 fund. The performance results were very encouraging, but Bill still wondered if they were a fluke of the data, a result of data mining rather than the reflection of a true market anomaly. He wanted to discuss several possible explanations of the phenomenon, and to decide whether Martingale should offer the strategy to its clients.
Swot Analysis of "Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy" written by Luis M. Viceira, Helen H. Tung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Martingale 130 facing as an external strategic factors. Some of the topics covered in Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy case study are - Strategic Management Strategies, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing transportation and logistics costs, there is backlash against globalization, increasing household debt because of falling income levels, wage bills are increasing, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Martingale 130, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Martingale 130 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy case study
2. Improving business portfolio management of Martingale 130
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 Martingale 130
Strengths Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Martingale 130 in Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy Harvard Business Review case study are -
Highly skilled collaborators
– Martingale 130 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Martingale 130 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Martingale 130 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Martingale 130
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Martingale 130 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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.
Strong track record of project management
– Martingale 130 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Martingale 130 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Martingale 130 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 Martingale 130 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Martingale 130 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 Luis M. Viceira, Helen H. Tung 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.
High switching costs
– The high switching costs that Martingale 130 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy firm has clearly differentiated products in the market place. This has enabled Martingale 130 to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Martingale 130 to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Martingale 130 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Martingale 130 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 Martingale 130 in the sector have low bargaining power. Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Martingale 130 to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy are -
No frontier risks strategy
– After analyzing the HBR case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, is just above the industry average. Martingale 130 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Martingale 130 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy HBR case study mentions - Martingale 130 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 Martingale 130 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, in the dynamic environment Martingale 130 has struggled to respond to the nimble upstart competition. Martingale 130 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Martingale 130 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, it seems that the employees of Martingale 130 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.
Capital Spending Reduction
– Even during the low interest decade, Martingale 130 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.
High cash cycle compare to competitors
Martingale 130 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Martingale 130 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.
Opportunities Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy | 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy are -
Using analytics as competitive advantage
– Martingale 130 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Martingale 130 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, Martingale 130 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.
Leveraging digital technologies
– Martingale 130 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.
Manufacturing automation
– Martingale 130 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.
Developing new processes and practices
– Martingale 130 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.
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. Martingale 130 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Martingale 130 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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.
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. Martingale 130 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. Martingale 130 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.
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 Martingale 130 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.
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. Martingale 130 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Martingale 130 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, Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Martingale 130 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 Martingale 130 to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Martingale 130 has opened avenues for new revenue streams for the organization in the industry. This can help Martingale 130 to build a more holistic ecosystem as suggested in the Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy case study. Martingale 130 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy are -
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 Martingale 130 business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Martingale 130 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.
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 Martingale 130 in the Finance & Accounting sector and impact the bottomline of the organization.
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 Martingale 130 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.
Increasing wage structure of Martingale 130
– 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 Martingale 130.
Stagnating economy with rate increase
– Martingale 130 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Martingale 130 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. Martingale 130 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.
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 Martingale 130.
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. Martingale 130 needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy, Martingale 130 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale Asset Management LP in 2008, 130/30 Funds, and a Low-Volatility Strategy 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 Martingale 130 needs to make to build a sustainable competitive advantage.
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