Barclays Global Investors and Exchange Traded Funds SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Barclays Global Investors and Exchange Traded Funds
Provides an overview of the Exchange Traded Funds (ETF) industry and highlights the leadership role that Barclays Global Investors (BGI) has played in this developing asset class. BGI launched its first ETFs under the iShares brand name in 2000, and by mid-2007 BGI was the global leader in the $600 billion ETF market. BGI's success had started attracting the interest of other large asset management firms, and Lee Kranefuss, CEO of BGI's iShares business was thinking about how BGI should compete in the increasingly crowded market. Should BGI expand into Europe and Asia more aggressively? Should BGI, already a large manager of 401(k) assets for corporations, pursue the 401(k) market with its iShares products? Would BGI need to cut its fees as other competitors such as Vanguard started marketing its "low-cost" ETF products?
Authors :: Luis M. Viceira, Alison Berkley Wagonfeld
Swot Analysis of "Barclays Global Investors and Exchange Traded Funds" written by Luis M. Viceira, Alison Berkley Wagonfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bgi Ishares facing as an external strategic factors. Some of the topics covered in Barclays Global Investors and Exchange Traded Funds case study are - Strategic Management Strategies, Financial markets, Innovation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Barclays Global Investors and Exchange Traded Funds casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Barclays Global Investors and Exchange Traded Funds
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barclays Global Investors and Exchange Traded Funds case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bgi Ishares, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bgi Ishares 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 Barclays Global Investors and Exchange Traded Funds can be done for the following purposes –
1. Strategic planning using facts provided in Barclays Global Investors and Exchange Traded Funds case study
2. Improving business portfolio management of Bgi Ishares
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 Bgi Ishares
Strengths Barclays Global Investors and Exchange Traded Funds | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bgi Ishares in Barclays Global Investors and Exchange Traded Funds Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Bgi Ishares in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Bgi Ishares has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bgi Ishares to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Bgi Ishares digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bgi Ishares 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.
Learning organization
- Bgi Ishares 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 Bgi Ishares is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barclays Global Investors and Exchange Traded Funds Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Bgi Ishares is one of the leading recruiters in the industry. Managers in the Barclays Global Investors and Exchange Traded Funds are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Bgi Ishares 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 Barclays Global Investors and Exchange Traded 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Barclays Global Investors and Exchange Traded Funds firm has clearly differentiated products in the market place. This has enabled Bgi Ishares to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Bgi Ishares to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Bgi Ishares has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bgi Ishares 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.
Strong track record of project management
– Bgi Ishares is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Bgi Ishares in the sector have low bargaining power. Barclays Global Investors and Exchange Traded Funds has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bgi Ishares to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Bgi Ishares 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.
Operational resilience
– The operational resilience strategy in the Barclays Global Investors and Exchange Traded 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.
Weaknesses Barclays Global Investors and Exchange Traded Funds | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barclays Global Investors and Exchange Traded Funds are -
High bargaining power of channel partners
– Because of the regulatory requirements, Luis M. Viceira, Alison Berkley Wagonfeld suggests that, Bgi Ishares 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bgi Ishares 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 decision making process
– As mentioned earlier in the report, Bgi Ishares 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. Bgi Ishares 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Barclays Global Investors and Exchange Traded Funds, in the dynamic environment Bgi Ishares has struggled to respond to the nimble upstart competition. Bgi Ishares has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Bgi Ishares 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.
Aligning sales with marketing
– It come across in the case study Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded Funds can leverage the sales team experience to cultivate customer relationships as Bgi Ishares is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bgi Ishares supply chain. Even after few cautionary changes mentioned in the HBR case study - Barclays Global Investors and Exchange Traded Funds, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bgi Ishares vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Bgi Ishares 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.
Products dominated business model
– Even though Bgi Ishares 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 - Barclays Global Investors and Exchange Traded Funds should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Bgi Ishares 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.
High cash cycle compare to competitors
Bgi Ishares 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.
Opportunities Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded Funds are -
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. Bgi Ishares 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. Bgi Ishares 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bgi Ishares can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Bgi Ishares 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.
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. Bgi Ishares can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Bgi Ishares 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.
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 Bgi Ishares in the consumer business. Now Bgi Ishares can target international markets with far fewer capital restrictions requirements than the existing system.
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. Bgi Ishares can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Bgi Ishares 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bgi Ishares 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bgi Ishares 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.
Developing new processes and practices
– Bgi Ishares 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.
Using analytics as competitive advantage
– Bgi Ishares 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 Barclays Global Investors and Exchange Traded Funds - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bgi Ishares to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Bgi Ishares 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.
Threats Barclays Global Investors and Exchange Traded Funds External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barclays Global Investors and Exchange Traded Funds are -
Regulatory challenges
– Bgi Ishares 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.
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 Bgi Ishares in the Finance & Accounting sector and impact the bottomline of the organization.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bgi Ishares can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bgi Ishares 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 Barclays Global Investors and Exchange Traded Funds .
Consumer confidence and its impact on Bgi Ishares 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.
Stagnating economy with rate increase
– Bgi Ishares 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.
Technology acceleration in Forth Industrial Revolution
– Bgi Ishares has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bgi Ishares 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.
High dependence on third party suppliers
– Bgi Ishares 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.
Shortening product life cycle
– it is one of the major threat that Bgi Ishares is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bgi Ishares 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bgi Ishares with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Bgi Ishares 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.
Weighted SWOT Analysis of Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded 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 Barclays Global Investors and Exchange Traded 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 Bgi Ishares needs to make to build a sustainable competitive advantage.
