Case Study Description of Calvert Investments: Environmental, Social, and Governance Sustainability
In 2014, the chief executive officer (CEO) of Calvert Investments (Calvert) found herself at a crossroads. Under her stewardship, Calvert had become one of the world's leading investment management firms, specialized in using sustainability as a platform to create value for investors. After having been recruited to the position from Wall Street, the CEO had enthusiastically embraced and encouraged Calvert's unique positioning for 17 years. The idea of environmental, social, and governance sustainability had not only defined Calvert's niche in investments, but had come to describe the CEO's personal leadership style and shaped how she ran the company. However, with many apparent challenges to the environmental, social, and governance community and the broader investor community, the CEO wondered if the old way of doing sustainable and socially responsible investing was sufficient to support the changes that she felt were needed. Chantal van Esch is affiliated with Case Western Reserve University - Fowler Center. Chris Laszlo is affiliated with Case Western Reserve University - Fowler Center. Katherine Gullett is affiliated with Case Western Reserve University.
Authors :: Chantal van Esch, Chris Laszlo, Katherine Gullett, Benjamin Cooper
Swot Analysis of "Calvert Investments: Environmental, Social, and Governance Sustainability" written by Chantal van Esch, Chris Laszlo, Katherine Gullett, Benjamin Cooper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Calvert Calvert's facing as an external strategic factors. Some of the topics covered in Calvert Investments: Environmental, Social, and Governance Sustainability case study are - Strategic Management Strategies, Financial management, Gender, Leadership, Strategy, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Calvert Investments: Environmental, Social, and Governance Sustainability casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing energy prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, there is backlash against globalization,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Calvert Investments: Environmental, Social, and Governance Sustainability
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Calvert Investments: Environmental, Social, and Governance Sustainability case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Calvert Calvert's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Calvert Calvert's 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 Calvert Investments: Environmental, Social, and Governance Sustainability can be done for the following purposes –
1. Strategic planning using facts provided in Calvert Investments: Environmental, Social, and Governance Sustainability case study
2. Improving business portfolio management of Calvert Calvert's
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 Calvert Calvert's
Strengths Calvert Investments: Environmental, Social, and Governance Sustainability | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Calvert Calvert's in Calvert Investments: Environmental, Social, and Governance Sustainability Harvard Business Review case study are -
Diverse revenue streams
– Calvert Calvert's is present in almost all the verticals within the industry. This has provided firm in Calvert Investments: Environmental, Social, and Governance Sustainability 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.
Training and development
– Calvert Calvert's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Calvert Investments: Environmental, Social, and Governance Sustainability 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.
Ability to lead change in Leadership & Managing People field
– Calvert Calvert's 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 Calvert Calvert's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Calvert Calvert's 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.
Effective Research and Development (R&D)
– Calvert Calvert's 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 Calvert Investments: Environmental, Social, and Governance Sustainability - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Calvert Calvert's in the sector have low bargaining power. Calvert Investments: Environmental, Social, and Governance Sustainability has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Calvert Calvert's 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 Calvert Calvert's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Calvert Calvert's 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.
Innovation driven organization
– Calvert Calvert's is one of the most innovative firm in sector. Manager in Calvert Investments: Environmental, Social, and Governance Sustainability Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Calvert Calvert's is one of the leading recruiters in the industry. Managers in the Calvert Investments: Environmental, Social, and Governance Sustainability are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Calvert Calvert's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Calvert Calvert's 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
– Calvert Calvert's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Calvert Calvert's 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 Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Investments: Environmental, Social, and Governance Sustainability | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Calvert Investments: Environmental, Social, and Governance Sustainability are -
Lack of clear differentiation of Calvert Calvert's products
– To increase the profitability and margins on the products, Calvert Calvert's needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Calvert Calvert's 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Calvert's has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Calvert Calvert's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Calvert Investments: Environmental, Social, and Governance Sustainability can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Calvert Investments: Environmental, Social, and Governance Sustainability, is just above the industry average. Calvert Calvert's 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.
High cash cycle compare to competitors
Calvert Calvert's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Calvert Investments: Environmental, Social, and Governance Sustainability, in the dynamic environment Calvert Calvert's has struggled to respond to the nimble upstart competition. Calvert Calvert's 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
– Calvert Calvert's 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, Calvert Calvert's 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 operating costs
– Compare to the competitors, firm in the HBR case study Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Calvert's 's lucrative customers.
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 Calvert Calvert's supply chain. Even after few cautionary changes mentioned in the HBR case study - Calvert Investments: Environmental, Social, and Governance Sustainability, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Calvert Calvert's vulnerable to further global disruptions in South East Asia.
Opportunities Calvert Investments: Environmental, Social, and Governance Sustainability | 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 Calvert Investments: Environmental, Social, and Governance Sustainability are -
Creating value in data economy
– The success of analytics program of Calvert Calvert's has opened avenues for new revenue streams for the organization in the industry. This can help Calvert Calvert's to build a more holistic ecosystem as suggested in the Calvert Investments: Environmental, Social, and Governance Sustainability case study. Calvert Calvert's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Calvert Calvert's 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.
Using analytics as competitive advantage
– Calvert Calvert's 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 Calvert Investments: Environmental, Social, and Governance Sustainability - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Calvert Calvert's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Calvert Calvert's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Calvert Calvert's 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 Calvert Calvert's 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. Calvert Calvert's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Calvert Calvert's is facing challenges because of the dominance of functional experts in the organization. Calvert Investments: Environmental, Social, and Governance Sustainability 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.
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 Calvert Calvert's in the consumer business. Now Calvert Calvert's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Calvert Calvert's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Calvert Calvert's 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 Calvert Calvert's 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.
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 Calvert Calvert's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Calvert Calvert's can use these opportunities to build new business models that can help the communities that Calvert Calvert's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Calvert Investments: Environmental, Social, and Governance Sustainability External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Calvert Investments: Environmental, Social, and Governance Sustainability are -
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 Calvert Calvert's in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Calvert Investments: Environmental, Social, and Governance Sustainability, Calvert Calvert's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Shortening product life cycle
– it is one of the major threat that Calvert Calvert's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Calvert Calvert's 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, Calvert Calvert's 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 Calvert Investments: Environmental, Social, and Governance Sustainability .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Calvert Calvert's 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 Calvert Calvert's 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
– Calvert Calvert's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Calvert Calvert's 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. Calvert Calvert's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Calvert Calvert's 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.
Technology acceleration in Forth Industrial Revolution
– Calvert Calvert's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Calvert Calvert's 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.
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. Calvert Calvert's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Calvert Calvert's
– 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 Calvert Calvert's.
Weighted SWOT Analysis of Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Investments: Environmental, Social, and Governance Sustainability 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 Calvert Calvert's needs to make to build a sustainable competitive advantage.