Introduction
BlackRock is one of the world’s leading providers of investment, advisory and risk management solutions. We are a fiduciaries to our clients. We’re investing for the future on behalf of our clients, inspiring our employees, and supporting our local communities. The business model of Blackrock includes its business plan, revenue model, its competitors, SWOT Analysis, and many more.
BlackRock, a fund management corporation with $9 trillion in Assets Under Management, employs 16,000+ individuals in 70 branches over 30 nations. BlackRock has reached its pinnacle in the asset management field by implementing effective differentiating strategies. It has risen to prominence by distinguishing itself from the competition.
Business Plan
BlackRock, Inc. is global asset management, risk mitigation, and advising firm that works with both retail and corporate clients. Single and multi-asset type baskets that invest in stocks, fixed income, options, and money market funds are among the company’s offerings. The firm is organized into a single corporate unit. Financial advisory and admin costs make up the majority of the company’s income.
- Official Entities, such as Federal reserve, Treasuries, supranational, and other Govt agencies; Taxable Entities, such as health insurers, Investment firms, firms, and Third-party fund backers, and Small investors;
- Tax-Exempt Entities, such as specified gain and specified contribution retirement plans, NGOs, establishments, and inheritances.
BlackRock’s clients are generally served by an in-house group of qualified portfolio managers and other financial experts spread across the Firm’s segment operating areas. These employees serve out of the Office premises in Atlanta, London, Madrid, Tokyo, Sydney, and Hong Kong, which span America, APAC, Europe, the Middle East, and Africa.
BlackRock is the parent company for the iShares group of ETFs, the largest global provider of ETFs. BlackRock derives the majority of its revenue from investment advisory and administrative fees charged to its clients.
Revenue Model
BlackRock makes money by offering a variety of portfolio advising and asset management assistance. Portfolio advising costs, admin costs, asset-backed income, and efficiency charges all contribute to the overall revenue.
BlackRock offers a range of investment management technology systems, risk management services, wealth management, and digital distribution tools to various insurance company, bank, pension fund, and asset manager clients.
Competitors
BlackRock’s major competitors are:
- The Vanguard Group
- State Street Corp. (STT)
- T. Rowe Price Group Inc. (TROW).
- Fidelity Investments
- Goldman Sachs
- Wells Fargo Advisors
SWOT Analysis
Strengths
Successful Go To Market Track Record – Blackrock Aladdin has a highly successful track record of both launching new products in the domestic market but also catering to the various market based on the insights from local consumers.
Strong relationship with existing suppliers – As an incumbent in the industry, Blackrock Aladdin has strong relationship with its suppliers and other members of the supply chain.
Strong Brand Equity and Brand Awareness – Blackrock Aladdin has some of the most recognized brands in the domestic market it operates in.
Strong Balance Sheet and Financial Statement of Blackrock Aladdin can help it to invest in new and diverse projects that can further diversify the revenue stream and increase Return on Sales (RoS) & other metrics.
Diverse Product Portfolio of Blackrock Aladdin – The products and brand portfolio of Blackrock Aladdin is enabling it to target various segments in the domestic market at the same time. This has enabled Blackrock Aladdin to build diverse revenue source and profit mix.
Weakness
Track record on environment consideration is not very encouraging – Blackrock Aladdin track record on environmental issues is not very encouraging.
Organization Culture – It seems that organization culture of Blackrock Aladdin is still dominated by turf wars within various divisions, leading to managers keeping information close to their chests.
Project Management is too focused on internal delivery rather than considering all the interests of external stakeholders. This approach can lead to poor public relation and customer backlash.
Inventory Management – Based on the details provided in the BlackRock Solutions case study, we can conclude that Blackrock Aladdin is not efficiently managing the inventory and cash cycle. According to Kenneth A. Froot, Scott Waggoner , there is huge scope of improvement in inventory management.
Opportunities
Increasing Standardization – Blackrock Aladdin can leverage this trend to reduce the number of offerings in the market and focus the marketing efforts on only the most successful products.
E-Commerce and Social Media Oriented Business Models – E-commerce business model can help Blackrock Aladdin to tie up with local suppliers and logistics provider in international market. Social media growth can help Blackrock Aladdin to reduce the cost of entering new market and reaching to customers at a significantly lower marketing budget. It can also lead to crowd sourcing various services and consumer oriented marketing based on the data and purchase behavior.
Lucrative Opportunities in International Markets – Globalization has led to opportunities in the international market. Blackrock Aladdin is in prime position to tap on those opportunities and grow the market share.
Changing Technology Landscape – Machine learning and Artificial Intelligence boom is transforming the technology landscape that Blackrock Aladdin operates in.
Developments in Artificial Intelligence – Blackrock Aladdin can use developments in artificial intelligence to better predict consumer demand, cater to niche segments, and make better recommendation engines.
Threats
Increasing costs component for working in developed market because of environmental regulations – Blackrock Aladdin has to deal with these costs as governments are trying to levy higher environmental taxes to promote cleaner options. For Blackrock Aladdin it may result into higher logistics costs and higher packaging costs.
Threats of New Entrants because of Reducing Costs and Increasing Efficiencies – As Blackrock Aladdin can leverage low cost of reaching customers using social media and e-commerce, so can the competitors – both local and international competitors.
Government Regulations and Bureaucracy – Blackrock Aladdin should keep a close eye on the fast changing government regulations under the growing pressure from protest groups and non government organization especially regarding to environmental and labor safety aspects.
Growing Protectionism – Blackrock Aladdin should hedge the risk against growing protectionism ranging from – storing data into international market to diversifying risk by operating into countries at different economic cycle.
Credit Binge post 2008 Recession – Easy access to credit can be over any time, so Blackrock Aladdin should focus on reducing its dependence on debt to expand. The party has lasted for more than a decade and rollback from Fed can result in huge interest costs for Blackrock Aladdin.
International Geo-Political Factors – Since the Trump election, geo-political factors have taken a turn for growing protectionism. Developments such as Brexit, Russian sanctions, foreign exchange crisis & inflation in Venezuela, lower oil prices etc are impacting international business environment. Blackrock Aladdin should closely focus on these events and make them integral to strategy making.
Conclusion
BlackRock is an American Multinational Investment Management Company based in New York, United States Of America. In the early years of the company, it was primarily focused on asset management, over time, the organisation came as an investment manager. Now, BlackRock has stepped up into the digital environment. To accelerate their digital services, they have been acquiring new marketing strategies to adapt to changing environmental aspects.
