Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had"
In February 1990, Drexel Burnham Lambert declared bankruptcy amid a slew of scandals. Equities chief Arthur Kirsch hoped to keep his high-performing 600-person team intact. Could he find a company that would take on such a massive group hire? Competitors were already moving in to poach his stars, but Kirsch was reluctant to see the group disintegrate. Could he keep a sufficient core intact while enticing a corporate suitor to make an offer? How could he maintain high morale and good communication within his group while he negotiated? What kind of company would want Kirsch's group? What kind of company would be the best fit culturally? What was the group's collective market value in the prevailing business climate and in the aftermath of Drexel's collapse? And if Kirsch could pull off such a deal, would the group follow him?
Authors :: Boris Groysberg, Anahita Hashemi, Brendan Reed
Swot Analysis of "Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had"" written by Boris Groysberg, Anahita Hashemi, Brendan Reed includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kirsch Burnham facing as an external strategic factors. Some of the topics covered in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" case study are - Strategic Management Strategies, Financial management, Knowledge management, Leadership, Leading teams, Motivating people, Negotiations, Organizational culture, Talent management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" casestudy better are - – wage bills are increasing, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kirsch Burnham, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kirsch Burnham 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" can be done for the following purposes –
1. Strategic planning using facts provided in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" case study
2. Improving business portfolio management of Kirsch Burnham
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 Kirsch Burnham
Strengths Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kirsch Burnham in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Kirsch Burnham in the sector have low bargaining power. Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kirsch Burnham to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Kirsch Burnham digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kirsch Burnham 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" firm has clearly differentiated products in the market place. This has enabled Kirsch Burnham to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Kirsch Burnham to invest into research and development (R&D) and innovation.
Innovation driven organization
– Kirsch Burnham is one of the most innovative firm in sector. Manager in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Kirsch Burnham in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Kirsch Burnham
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kirsch Burnham does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Kirsch Burnham has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kirsch Burnham 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.
Operational resilience
– The operational resilience strategy in the Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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.
High brand equity
– Kirsch Burnham has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kirsch Burnham to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Kirsch Burnham 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 Kirsch Burnham is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Kirsch Burnham is present in almost all the verticals within the industry. This has provided firm in Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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.
Analytics focus
– Kirsch Burnham 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 Boris Groysberg, Anahita Hashemi, Brendan Reed 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.
Weaknesses Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had", is just above the industry average. Kirsch Burnham 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.
Capital Spending Reduction
– Even during the low interest decade, Kirsch Burnham 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.
Need for greater diversity
– Kirsch Burnham 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.
Interest costs
– Compare to the competition, Kirsch Burnham 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had", it seems that the employees of Kirsch Burnham 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.
Lack of clear differentiation of Kirsch Burnham products
– To increase the profitability and margins on the products, Kirsch Burnham needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Kirsch Burnham 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kirsch Burnham 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Kirsch Burnham has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" can leverage the sales team experience to cultivate customer relationships as Kirsch Burnham is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had", 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.
Opportunities Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" | 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" are -
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 Kirsch Burnham in the consumer business. Now Kirsch Burnham can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Kirsch Burnham 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kirsch Burnham to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Kirsch Burnham can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kirsch Burnham 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, Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Kirsch Burnham 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. Kirsch Burnham 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.
Learning at scale
– Online learning technologies has now opened space for Kirsch Burnham 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kirsch Burnham 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 Kirsch Burnham to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Kirsch Burnham can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Kirsch Burnham 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.
Buying journey improvements
– Kirsch Burnham can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kirsch Burnham is facing challenges because of the dominance of functional experts in the organization. Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kirsch Burnham 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.
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 Kirsch Burnham 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.
Threats Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" are -
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 Kirsch Burnham.
Shortening product life cycle
– it is one of the major threat that Kirsch Burnham is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Kirsch Burnham high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kirsch Burnham in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Kirsch Burnham has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Kirsch Burnham needs to keep up with the evolution of technology in the Leadership & Managing People 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 Kirsch Burnham in the Leadership & Managing People industry. The Leadership & Managing People 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 Kirsch Burnham with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Kirsch Burnham
– 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 Kirsch Burnham.
Regulatory challenges
– Kirsch Burnham 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.
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. Kirsch Burnham 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, Kirsch Burnham 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" .
Consumer confidence and its impact on Kirsch Burnham 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.
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 Kirsch Burnham business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Drexel Burnham Lambert (A): "The Smartest People on Wall Street Can Be Had" 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 Kirsch Burnham needs to make to build a sustainable competitive advantage.