Case Study Description of Leadership Problems at Salomon (A)
Deryck Maughan, a vice chairman and co-head of investment banking at Salomon Brothers, learns that his superiors have been less than candid about their knowledge of bidding improprieties by the firm's government trading desk. He must decide what, if anything, he should do.
Swot Analysis of "Leadership Problems at Salomon (A)" written by Lynn Sharp Paine, Michael A. Santoro includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Salomon Deryck facing as an external strategic factors. Some of the topics covered in Leadership Problems at Salomon (A) case study are - Strategic Management Strategies, Decision making, Ethics, Leadership and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Leadership Problems at Salomon (A) casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing energy prices, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Leadership Problems at Salomon (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Leadership Problems at Salomon (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Salomon Deryck, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Salomon Deryck 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 Leadership Problems at Salomon (A) can be done for the following purposes –
1. Strategic planning using facts provided in Leadership Problems at Salomon (A) case study
2. Improving business portfolio management of Salomon Deryck
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 Salomon Deryck
Strengths Leadership Problems at Salomon (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Salomon Deryck in Leadership Problems at Salomon (A) Harvard Business Review case study are -
High brand equity
– Salomon Deryck has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Salomon Deryck to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Salomon Deryck in the sector have low bargaining power. Leadership Problems at Salomon (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Salomon Deryck to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Salomon Deryck 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.
High switching costs
– The high switching costs that Salomon Deryck 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.
Strong track record of project management
– Salomon Deryck is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Salomon Deryck has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Leadership Problems at Salomon (A) 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Leadership Problems at Salomon (A) firm has clearly differentiated products in the market place. This has enabled Salomon Deryck to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Salomon Deryck to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Salomon Deryck in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Salomon Deryck 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 Salomon Deryck is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Leadership Problems at Salomon (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Salomon Deryck is one of the most innovative firm in sector. Manager in Leadership Problems at Salomon (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Salomon Deryck
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Salomon Deryck does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Salomon Deryck 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 Lynn Sharp Paine, Michael A. Santoro 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 Leadership Problems at Salomon (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Leadership Problems at Salomon (A) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Leadership Problems at Salomon (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 Salomon Deryck has relatively successful track record of launching new products.
Need for greater diversity
– Salomon Deryck 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.
Slow to strategic competitive environment developments
– As Leadership Problems at Salomon (A) HBR case study mentions - Salomon Deryck takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Salomon Deryck 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Salomon Deryck is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Leadership Problems at Salomon (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.
Capital Spending Reduction
– Even during the low interest decade, Salomon Deryck 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.
Lack of clear differentiation of Salomon Deryck products
– To increase the profitability and margins on the products, Salomon Deryck needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Salomon Deryck supply chain. Even after few cautionary changes mentioned in the HBR case study - Leadership Problems at Salomon (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Salomon Deryck vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Leadership Problems at Salomon (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.
High operating costs
– Compare to the competitors, firm in the HBR case study Leadership Problems at Salomon (A) 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 Salomon Deryck 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Salomon Deryck is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Salomon Deryck needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Salomon Deryck to focus more on services rather than just following the product oriented approach.
Opportunities Leadership Problems at Salomon (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 Leadership Problems at Salomon (A) are -
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 Salomon Deryck 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.
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. Salomon Deryck can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Salomon Deryck 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.
Learning at scale
– Online learning technologies has now opened space for Salomon Deryck 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Salomon Deryck can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Salomon Deryck 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Salomon Deryck is facing challenges because of the dominance of functional experts in the organization. Leadership Problems at Salomon (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.
Buying journey improvements
– Salomon Deryck can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Leadership Problems at Salomon (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Salomon Deryck can use these opportunities to build new business models that can help the communities that Salomon Deryck 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 Salomon Deryck 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.
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 Salomon Deryck in the consumer business. Now Salomon Deryck can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Salomon Deryck 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 Leadership Problems at Salomon (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Salomon Deryck to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Salomon Deryck has opened avenues for new revenue streams for the organization in the industry. This can help Salomon Deryck to build a more holistic ecosystem as suggested in the Leadership Problems at Salomon (A) case study. Salomon Deryck can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Leadership Problems at Salomon (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Leadership Problems at Salomon (A) 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 Salomon Deryck.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Salomon Deryck 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 Leadership Problems at Salomon (A) .
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 Salomon Deryck in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Salomon Deryck
– 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 Salomon Deryck.
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. Salomon Deryck needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Salomon Deryck 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. Salomon Deryck can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Stagnating economy with rate increase
– Salomon Deryck 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.
High dependence on third party suppliers
– Salomon Deryck 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Salomon Deryck 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 Salomon Deryck with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Salomon Deryck 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Salomon Deryck can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Leadership Problems at Salomon (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 Leadership Problems at Salomon (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 Leadership Problems at Salomon (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 Leadership Problems at Salomon (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 Leadership Problems at Salomon (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 Salomon Deryck needs to make to build a sustainable competitive advantage.