Case Study Description of Wr Hambrecht & Co.: Openipo
The purpose of this case is to evaluate the opportunities and challenges the Internet presents for investment banks offering online initial public offerings (IPOs). Information included about Wit Capital, WR Hembrecht & Co., E*Offerings, and other online investment banks and brokerages allows the student to identify and evaluate benefits and risks stemming form online IPOs, including discussions about investors access, issuer access, and pricing. The innovative Dutch auction system used by OpenIPO will illuminate one possible solution to pricing inefficiencies endemic to the traditional IPO process.
Authors :: Kenneth Eades, Dana Clyman, Carolyn Cooley, Amy Zahratka
Swot Analysis of "Wr Hambrecht & Co.: Openipo" written by Kenneth Eades, Dana Clyman, Carolyn Cooley, Amy Zahratka includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Openipo Wr facing as an external strategic factors. Some of the topics covered in Wr Hambrecht & Co.: Openipo case study are - Strategic Management Strategies, IT, Marketing, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Wr Hambrecht & Co.: Openipo casestudy better are - – increasing transportation and logistics costs, geopolitical disruptions, increasing energy prices, increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Wr Hambrecht & Co.: Openipo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wr Hambrecht & Co.: Openipo case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Openipo Wr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Openipo Wr 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 Wr Hambrecht & Co.: Openipo can be done for the following purposes –
1. Strategic planning using facts provided in Wr Hambrecht & Co.: Openipo case study
2. Improving business portfolio management of Openipo Wr
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 Openipo Wr
Strengths Wr Hambrecht & Co.: Openipo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Openipo Wr in Wr Hambrecht & Co.: Openipo Harvard Business Review case study are -
High brand equity
– Openipo Wr has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Openipo Wr to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Openipo Wr in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Openipo Wr 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 Eades, Dana Clyman, Carolyn Cooley, Amy Zahratka 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.
Operational resilience
– The operational resilience strategy in the Wr Hambrecht & Co.: Openipo 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 Finance & Accounting industry
– Wr Hambrecht & Co.: Openipo firm has clearly differentiated products in the market place. This has enabled Openipo Wr to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Openipo Wr to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Openipo Wr is present in almost all the verticals within the industry. This has provided firm in Wr Hambrecht & Co.: Openipo 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.
Ability to lead change in Finance & Accounting field
– Openipo Wr 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 Openipo Wr in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Openipo Wr
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Openipo Wr does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Openipo Wr is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Openipo Wr 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 Wr Hambrecht & Co.: Openipo HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Openipo Wr 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.
Low bargaining power of suppliers
– Suppliers of Openipo Wr in the sector have low bargaining power. Wr Hambrecht & Co.: Openipo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Openipo Wr to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Wr Hambrecht & Co.: Openipo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wr Hambrecht & Co.: Openipo are -
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth Eades, Dana Clyman, Carolyn Cooley, Amy Zahratka suggests that, Openipo Wr 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.
Products dominated business model
– Even though Openipo Wr has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Wr Hambrecht & Co.: Openipo should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Wr Hambrecht & Co.: Openipo HBR case study mentions - Openipo Wr 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.
Interest costs
– Compare to the competition, Openipo Wr 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wr Hambrecht & Co.: Openipo, is just above the industry average. Openipo Wr 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, Openipo Wr is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wr Hambrecht & Co.: Openipo can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wr Hambrecht & Co.: Openipo, it seems that the employees of Openipo Wr 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.
High cash cycle compare to competitors
Openipo Wr 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.
Slow decision making process
– As mentioned earlier in the report, Openipo Wr 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. Openipo Wr 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wr Hambrecht & Co.: Openipo 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 Openipo Wr has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Wr Hambrecht & Co.: Openipo 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 Wr Hambrecht & Co.: Openipo can leverage the sales team experience to cultivate customer relationships as Openipo Wr is planning to shift buying processes online.
Opportunities Wr Hambrecht & Co.: Openipo | 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 Wr Hambrecht & Co.: Openipo are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Openipo Wr 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
– Openipo Wr 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.
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. Openipo Wr can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Openipo Wr 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Openipo Wr 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Openipo Wr 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.
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 Openipo Wr in the consumer business. Now Openipo Wr can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Openipo Wr 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.
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. Openipo Wr can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Openipo Wr can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wr Hambrecht & Co.: Openipo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Openipo Wr can use these opportunities to build new business models that can help the communities that Openipo Wr 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. Openipo Wr 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. Openipo Wr can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Openipo Wr to increase its market reach. Openipo Wr will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Wr Hambrecht & Co.: Openipo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wr Hambrecht & Co.: Openipo are -
Consumer confidence and its impact on Openipo Wr 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.
Shortening product life cycle
– it is one of the major threat that Openipo Wr is facing in Finance & Accounting 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 Wr Hambrecht & Co.: Openipo, Openipo Wr 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 .
Increasing wage structure of Openipo Wr
– 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 Openipo Wr.
Technology acceleration in Forth Industrial Revolution
– Openipo Wr has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Openipo Wr needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Openipo Wr 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.
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.
Regulatory challenges
– Openipo Wr 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.
Stagnating economy with rate increase
– Openipo Wr 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.
High dependence on third party suppliers
– Openipo Wr 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
– Openipo Wr 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. Openipo Wr can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Openipo Wr 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 Wr Hambrecht & Co.: Openipo .
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 Openipo Wr in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Wr Hambrecht & Co.: Openipo 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 Wr Hambrecht & Co.: Openipo 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 Wr Hambrecht & Co.: Openipo 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 Wr Hambrecht & Co.: Openipo 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 Wr Hambrecht & Co.: Openipo 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 Openipo Wr needs to make to build a sustainable competitive advantage.
