Case Study Description of IA Clarington: Target Click Funds
In October 2008, the senior vice-president for product and business development at IA Clarington (IAC), a life and health insurance company, was preparing for a meeting with the president of IAC. The topic of discussion would be IAC's Target Click Fund, a mutual fund with an options-based guarantee structure targeted towards investors who were looking for growth along with capital preservation. The vice-president had been asked to render his opinion of whether he thought that the fund's scheduled rebalancing date should be accelerated in order to take advantage of a historic decline in global equity markets. The vice-president had to consider several pieces of information in making his recommendation, including that fact that his main competitors would be quick to take advantage of any misguided recommendation. He wondered if the markets had truly hit bottom, and how/if he could time the rebalancing to the lowest point. Also, the investment philosophy behind IAC and click funds encouraged investors to remain invested during turbulent times: what would changing the rebalancing date indicate to those investors?
Authors :: Chuck Grace, James A. Erskine, Michiel R. Leenders
Swot Analysis of "IA Clarington: Target Click Funds" written by Chuck Grace, James A. Erskine, Michiel R. Leenders includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Iac Rebalancing facing as an external strategic factors. Some of the topics covered in IA Clarington: Target Click Funds case study are - Strategic Management Strategies, Marketing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the IA Clarington: Target Click Funds casestudy better are - – wage bills are increasing, cloud computing is disrupting traditional business models, increasing commodity prices, increasing energy prices, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of IA Clarington: Target Click Funds
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IA Clarington: Target Click Funds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Iac Rebalancing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Iac Rebalancing 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 IA Clarington: Target Click Funds can be done for the following purposes –
1. Strategic planning using facts provided in IA Clarington: Target Click Funds case study
2. Improving business portfolio management of Iac Rebalancing
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 Iac Rebalancing
Strengths IA Clarington: Target Click Funds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Iac Rebalancing in IA Clarington: Target Click Funds Harvard Business Review case study are -
Innovation driven organization
– Iac Rebalancing is one of the most innovative firm in sector. Manager in IA Clarington: Target Click Funds Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the IA Clarington: Target Click Funds 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
– IA Clarington: Target Click Funds firm has clearly differentiated products in the market place. This has enabled Iac Rebalancing to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Iac Rebalancing to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Iac Rebalancing 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 IA Clarington: Target Click Funds - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Iac Rebalancing 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.
Successful track record of launching new products
– Iac Rebalancing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Iac Rebalancing 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.
Analytics focus
– Iac Rebalancing 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 Chuck Grace, James A. Erskine, Michiel R. Leenders 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Iac Rebalancing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Iac Rebalancing 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 Iac Rebalancing 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.
Low bargaining power of suppliers
– Suppliers of Iac Rebalancing in the sector have low bargaining power. IA Clarington: Target Click Funds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Iac Rebalancing to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Iac Rebalancing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Iac Rebalancing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in IA Clarington: Target Click Funds Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses IA Clarington: Target Click Funds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IA Clarington: Target Click Funds are -
Slow decision making process
– As mentioned earlier in the report, Iac Rebalancing 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. Iac Rebalancing 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 IA Clarington: Target Click Funds, is just above the industry average. Iac Rebalancing 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.
Products dominated business model
– Even though Iac Rebalancing 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 - IA Clarington: Target Click Funds should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study IA Clarington: Target Click Funds 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 IA Clarington: Target Click Funds can leverage the sales team experience to cultivate customer relationships as Iac Rebalancing is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Iac Rebalancing 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.
Skills based hiring
– The stress on hiring functional specialists at Iac Rebalancing 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.
High operating costs
– Compare to the competitors, firm in the HBR case study IA Clarington: Target Click Funds 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 Iac Rebalancing 's lucrative customers.
Need for greater diversity
– Iac Rebalancing 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, Iac Rebalancing 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Chuck Grace, James A. Erskine, Michiel R. Leenders suggests that, Iac Rebalancing 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.
Increasing silos among functional specialists
– The organizational structure of Iac Rebalancing is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Iac Rebalancing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Iac Rebalancing to focus more on services rather than just following the product oriented approach.
Opportunities IA Clarington: Target Click Funds | 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 IA Clarington: Target Click Funds are -
Buying journey improvements
– Iac Rebalancing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. IA Clarington: Target Click Funds 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Iac Rebalancing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Iac Rebalancing 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, IA Clarington: Target Click Funds, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Iac Rebalancing can use these opportunities to build new business models that can help the communities that Iac Rebalancing operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Iac Rebalancing 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.
Manufacturing automation
– Iac Rebalancing 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.
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. Iac Rebalancing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Iac Rebalancing to increase its market reach. Iac Rebalancing 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.
Building a culture of innovation
– managers at Iac Rebalancing 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.
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. Iac Rebalancing 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. Iac Rebalancing 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
– Iac Rebalancing 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 Iac Rebalancing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Iac Rebalancing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats IA Clarington: Target Click Funds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IA Clarington: Target Click Funds are -
Shortening product life cycle
– it is one of the major threat that Iac Rebalancing is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Iac Rebalancing
– 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 Iac Rebalancing.
Consumer confidence and its impact on Iac Rebalancing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Iac Rebalancing 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
– Iac Rebalancing 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.
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. Iac Rebalancing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Iac Rebalancing 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 IA Clarington: Target Click Funds .
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 Iac Rebalancing business can come under increasing regulations regarding data privacy, data security, 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 IA Clarington: Target Click Funds, Iac Rebalancing 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 .
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.
Regulatory challenges
– Iac Rebalancing needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
High 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. Iac Rebalancing needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Iac Rebalancing 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.
Weighted SWOT Analysis of IA Clarington: Target Click Funds 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 IA Clarington: Target Click Funds 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 IA Clarington: Target Click Funds 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 IA Clarington: Target Click Funds 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 IA Clarington: Target Click Funds 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 Iac Rebalancing needs to make to build a sustainable competitive advantage.
