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 - – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Training and development
– Globeop Globeop's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Globeop Globeop's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Globeop Globeop's 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.
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.
Effective Research and Development (R&D)
– Globeop Globeop's 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Globeop Globeop's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the GlobeOp: Enabling Hedge Funds, 2000-2003 (A) 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.
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.
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.
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 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.
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.
Interest costs
– Compare to the competition, Globeop Globeop's 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.
Need for greater diversity
– Globeop Globeop's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Globeop Globeop's 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.
Slow to strategic competitive environment developments
– As GlobeOp: Enabling Hedge Funds, 2000-2003 (A) HBR case study mentions - Globeop Globeop's 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.
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.
Low market penetration in new markets
– Outside its home market of Globeop Globeop's, firm in the HBR case study GlobeOp: Enabling Hedge Funds, 2000-2003 (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 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 bargaining power of channel partners
– Because of the regulatory requirements, Victoria Chang, Glenn Carroll, David Modest suggests that, Globeop Globeop's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 -
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Globeop Globeop's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Using analytics as competitive advantage
– Globeop Globeop's 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 GlobeOp: Enabling Hedge Funds, 2000-2003 (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Globeop Globeop's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Globeop Globeop's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Developing new processes and practices
– Globeop Globeop's can develop new processes and procedures in Global Business 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Globeop Globeop's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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.
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 -
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. Globeop Globeop's 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.
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.
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 Globeop Globeop's.
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.
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 Globeop Globeop's in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Globeop Globeop's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Globeop Globeop's needs to keep up with the evolution of technology in the Global Business 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.
Stagnating economy with rate increase
– Globeop Globeop's 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.
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 Globeop Globeop's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 .
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.
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.