Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A)
Less than a month after the close of the merger between The Bank of New York and Mellon Financial, managers at the two firms realized that plans for combining their asset servicing businesses - and realizing the $180 million of annual cost savings that they had promised Wall Street - were fraught with risk. Senior executives must evaluate the seriousness of the risks and identify alternative ways of integrating the two firms, while safeguarding the technologies that process and clear a substantial fraction of the world's financial transactions. [Continues with "B" and "C" cases.]
Authors :: Ryan D. Taliaferro, Clayton Rose, David Lane
Swot Analysis of "Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A)" written by Ryan D. Taliaferro, Clayton Rose, David Lane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mellon York facing as an external strategic factors. Some of the topics covered in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) case study are - Strategic Management Strategies, Mergers & acquisitions, Technology and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) casestudy better are - – wage bills are increasing, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, geopolitical disruptions, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs,
increasing energy prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mellon York, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mellon York 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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) can be done for the following purposes –
1. Strategic planning using facts provided in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) case study
2. Improving business portfolio management of Mellon York
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mellon York
Strengths Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mellon York in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) Harvard Business Review case study are -
Learning organization
- Mellon York 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 Mellon York is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Mellon York digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mellon York 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.
Effective Research and Development (R&D)
– Mellon York 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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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.
Superior customer experience
– The customer experience strategy of Mellon York in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Mellon York is one of the most innovative firm in sector. Manager in Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Mellon York 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.
Operational resilience
– The operational resilience strategy in the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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.
Analytics focus
– Mellon York 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 Ryan D. Taliaferro, Clayton Rose, David Lane 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.
Strong track record of project management
– Mellon York is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Mellon York has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mellon York to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Leadership & Managing People field
– Mellon York 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 Mellon York in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Mellon York in the sector have low bargaining power. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mellon York to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mellon York is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Mellon York 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 cash cycle compare to competitors
Mellon York 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.
Interest costs
– Compare to the competition, Mellon York has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A), it seems that the employees of Mellon York 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Mellon York 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A), in the dynamic environment Mellon York has struggled to respond to the nimble upstart competition. Mellon York has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Mellon York has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Mellon York has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 Mellon York, firm in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) are -
Developing new processes and practices
– Mellon York can develop new processes and procedures in Leadership & Managing People 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mellon York 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 Mellon York to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mellon York is facing challenges because of the dominance of functional experts in the organization. Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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.
Leveraging digital technologies
– Mellon York can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Mellon York 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.
Manufacturing automation
– Mellon York can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mellon York can use these opportunities to build new business models that can help the communities that Mellon York operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mellon York in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Mellon York has opened avenues for new revenue streams for the organization in the industry. This can help Mellon York to build a more holistic ecosystem as suggested in the Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) case study. Mellon York can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Mellon York can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Mellon York 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mellon York 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. Mellon York 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.
Building a culture of innovation
– managers at Mellon York 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 Leadership & Managing People segment.
Threats Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) are -
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. Mellon York needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Mellon York 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.
Consumer confidence and its impact on Mellon York 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mellon York can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Mellon York 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. Mellon York 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.
Regulatory challenges
– Mellon York 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 Leadership & Managing People industry regulations.
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 Mellon York.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mellon York 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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (A) .
Shortening product life cycle
– it is one of the major threat that Mellon York is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Mellon York in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Mellon York 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. Mellon York can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mellon York with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Merger of Equals: The Integration of Mellon Financial and The Bank of New York (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 Mellon York needs to make to build a sustainable competitive advantage.
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