Case Study Description of GlobeOp: Enabling Hedge Funds, 2000-2003 (A)
GlobeOp, headquartered in New York and London, was an independent financial technology firm focused on providing outsourced middle- and back-office operations capabilities, and fund administration and risk reporting services to hedge funds and their investors, including fund of funds, institutional investors and family offices. The founders of GlobeOp endured typical start-up challenges that included endless hours, technical challenges, management issues, strategic disagreements, resource issues, and financial insecurity. But by December 2003, GlobeOp had grown to nearly 400 people, serving 86 clients representing $29.6 billion in assets under management (AUM). Moreover, GlobeOp had done so well that it had attracted the interest of a broad range of potential investors and competitors. Ultimately, in the Fall of 2003, GlobeOp's initial partners decided to sell a minority portion of the company to TA Associates, a private equity and buyout firm, for $82 million. TA Associates had been attracted to GlobeOp because of its instrumental role in transforming the hedge fund industry. But despite its early successes, the GlobeOp founders did not want to rest on their laurels. They wondered how best to take advantage of the company's platform, as well as how to maintain GlobeOp's market leadership position going forward.
Authors :: Victoria Chang, Glenn Carroll, David Modest
Swot Analysis of "GlobeOp: Enabling Hedge Funds, 2000-2003 (A)" written by Victoria Chang, Glenn Carroll, David Modest includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Globeop Globeop's facing as an external strategic factors. Some of the topics covered in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) case study are - Strategic Management Strategies, Entrepreneurship, Financial management, Organizational structure, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the GlobeOp: Enabling Hedge Funds, 2000-2003 (A) casestudy better are - – increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of GlobeOp: Enabling Hedge Funds, 2000-2003 (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Globeop Globeop's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Globeop Globeop's 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) can be done for the following purposes –
1. Strategic planning using facts provided in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) case study
2. Improving business portfolio management of Globeop Globeop's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Globeop Globeop's
Strengths GlobeOp: Enabling Hedge Funds, 2000-2003 (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Globeop Globeop's in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) Harvard Business Review case study are -
Analytics focus
– Globeop Globeop's 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 Victoria Chang, Glenn Carroll, David Modest 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 Globeop Globeop's 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.
Diverse revenue streams
– Globeop Globeop's is present in almost all the verticals within the industry. This has provided firm in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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.
Highly skilled collaborators
– Globeop Globeop's 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Global Business field
– Globeop Globeop's 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 Globeop Globeop's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– GlobeOp: Enabling Hedge Funds, 2000-2003 (A) firm has clearly differentiated products in the market place. This has enabled Globeop Globeop's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Globeop Globeop's to invest into research and development (R&D) and innovation.
Organizational Resilience of Globeop Globeop's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Globeop Globeop's 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 Globeop Globeop's in the sector have low bargaining power. GlobeOp: Enabling Hedge Funds, 2000-2003 (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Globeop Globeop's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Globeop Globeop's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Globeop Globeop's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Globeop Globeop's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Globeop Globeop's 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.
Learning organization
- Globeop Globeop's 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 Globeop Globeop's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses GlobeOp: Enabling Hedge Funds, 2000-2003 (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GlobeOp: Enabling Hedge Funds, 2000-2003 (A) are -
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 Globeop Globeop's supply chain. Even after few cautionary changes mentioned in the HBR case study - GlobeOp: Enabling Hedge Funds, 2000-2003 (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Globeop Globeop's vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A), it seems that the employees of Globeop Globeop's 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.
No frontier risks strategy
– After analyzing the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A), it seems that company is thinking about the frontier risks that can impact Global Business 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 cash cycle compare to competitors
Globeop Globeop's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Globeop Globeop's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Globeop Globeop's 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.
Lack of clear differentiation of Globeop Globeop's products
– To increase the profitability and margins on the products, Globeop Globeop's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Globeop Globeop's 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. Globeop Globeop's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A), is just above the industry average. Globeop Globeop's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 Globeop Globeop's has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Globeop Globeop's is dominated by functional specialists. It is not different from other players in the Global Business segment. Globeop Globeop's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Globeop Globeop's to focus more on services rather than just following the product oriented approach.
Opportunities GlobeOp: Enabling Hedge Funds, 2000-2003 (A) | 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Globeop Globeop's is facing challenges because of the dominance of functional experts in the organization. GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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.
Learning at scale
– Online learning technologies has now opened space for Globeop Globeop's 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.
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 Globeop Globeop's in the consumer business. Now Globeop Globeop's can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Globeop Globeop's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Globeop Globeop's 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Globeop Globeop's 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. Globeop Globeop's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Globeop Globeop's 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 Globeop Globeop's to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Globeop Globeop's 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 Global Business segment.
Better consumer reach
– The expansion of the 5G network will help Globeop Globeop's to increase its market reach. Globeop Globeop's 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.
Manufacturing automation
– Globeop Globeop's can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Creating value in data economy
– The success of analytics program of Globeop Globeop's has opened avenues for new revenue streams for the organization in the industry. This can help Globeop Globeop's to build a more holistic ecosystem as suggested in the GlobeOp: Enabling Hedge Funds, 2000-2003 (A) case study. Globeop Globeop's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Globeop Globeop's 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.
Buying journey improvements
– Globeop Globeop's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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.
Threats GlobeOp: Enabling Hedge Funds, 2000-2003 (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A) are -
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.
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. Globeop Globeop's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A), Globeop Globeop's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Globeop Globeop's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Globeop Globeop's 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.
Environmental challenges
– Globeop Globeop's 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. Globeop Globeop's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Globeop Globeop's in the Global Business industry. The Global Business 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.
Regulatory challenges
– Globeop Globeop's 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 Global Business industry regulations.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Globeop Globeop's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Globeop Globeop's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Globeop Globeop's 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Globeop Globeop's 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) .
Weighted SWOT Analysis of GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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 Globeop Globeop's needs to make to build a sustainable competitive advantage.
