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State Street Bank And Trust Co New Product Development Case Solution
| Solution Id | Length | Case Author | Case Publisher |
|---|---|---|---|
| 1656 | 746 Words (4 Pages) | Gary P. Pisano, Maryam Golnaraghi | Harvard Business School : 696087 |
A Word File
Despite the efforts, this unit cannot be claimed to be effectively designed and organized. Although this group undertook some major activities (i.e. identification of the client’s needs), many of the tasks are still undertaken by other departments (instance the software development and product specifications were undertaken by the ITD departments). Apart from these tasks, management control and budgetary responsibility also still lays in the hands of the business departments.
Following questions are answered in this case study solution
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What are market forces are driving State Street to rethink its strategy? What are State Street’s core resources and capabilities?
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What role does MPD play in State Street’s strategic change? Is the unit effectively designed and organized? Why do you think so?
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What should State Street do? Why?
Case Analysis for State Street Bank And Trust Co New Product Development
1. What are market forces are driving State Street to rethink its strategy? What are State Street’s core resources and capabilities?
State Street had ruled the custody market for a couple of years. However, towards the mid-1990s, market conditions changed. Market forces such as increased competitiveness and price wars enabled the bank to rethink its strategy. Major custodian competitors such as JP Morgan, Mellon Bank etc. started strengthening their data processing and IT systems, thereby becoming highly competitive in the custody business. Due to this, a 50% reduction was observed in the custody fees. Consequently, price wars started and State Street concluded that investing in the custody business was no longer a golden opportunity for them. This led them to diversify their attention towards enhancing their product development capability. This process essentially involves the activities that would be carried out by a bank when launching the new products (Bhuriyan, 2011).
State Street’s core resource is its well-equipped Data processing technologies and IT systems. Another resource that the business possesses is its strong reputation and market share in the custody business (instance in 1993 it was the largest custodian of mutual funds and US pension funds). State Street is highly capable of providing the Global Financial asset services, Capital market & security services, Global Investment management services and Commercial Banking services.
2. What role does MPD play in State Street’s strategic change? Is the unit effectively designed and organized? Why do you think so?
Market and Product Development Group (MPD) plays a significant role in altering the company’s strategy. With the setting up of MPD, especial efforts were directed towards the product development Capability. The primary purpose of the MPD group was to gather effective ideas from all the business units, work on these ideas, consequently develop a business case for them and coordinate the development activities with the various divisions in the business.
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