BlackRock Inc (BlackRock) is an investment management firm that offers global investment management, risk management, and advisory services to institutional and retail clients. It manages assets on behalf of institutions and individuals worldwide through equity, fixed income, cash management, and alternative investment products. It caters to governments, foundations and endowments, taxable and financial institutions, corporations and third-party fund sponsors, and individuals saving for retirement and their children's educations. The company primarily operates in the Americas, Europe, the Middle East, and Asia-Pacific. BlackRock is headquartered in New York City, New York, the US. The company reported revenues of (US Dollars) US$14,539 million for the fiscal year ended December 2019 (FY2019), an increase of 2.4% over FY2018. In FY2019, the company's operating margin was 38.2%, compared to an operating margin of 38.4% in FY2018. In FY2019, the company recorded a net margin of 30.8%, compared to a net margin of 30.3% in FY2018. The company reported revenues of US$3,710 million for the first quarter ended March 2020, a decrease of 6.7% over the previous quarter. KEY FACTS Head Office BlackRock Inc 55 E 52nd St New York City New York New York City New York USA Phone 1 212 8105300 Fax 1 302 6555049 Web Address www2.blackrock.com Revenue / turnover (USD Mn) 14,539.0 Financial Year End December Employees 16,200 New York Stock Exchange Ticker BLK BlackRock Inc (BlackRock) is an investment management firm that offers global investment management, risk management, and advisory services to institutional and retail clients. Business diversification, improved assets under management, and asset flow through iShares ETFs are its major strengths; even as minor decrease in cost efficiency could be an area for improvement. The risks associated with Covid19 pandemic affecting financial stability, fee pressures, and crowded robo advisor field could impact its business performance. However, growing wealth management prospects and corporate tax cuts in the US, strategic initiatives and partnerships, and regulatory changes could provide ample growth opportunities to the company Strength : Assets under Management: Long Term, Business Diversification, Asset Flows: iShares ETFs. Opportunity Strategic Partnerships, Growing Wealth Management Prospects: The US Regulatory Changes: DOL Rul, Corporate Tax Cuts in the US, Strategic Initiatives. Weakness Cost Efficiency Threat: Fee Pressures, Crowded Robo Advisor Field, Covid-19 Pandemic Affecting Financial Stability

Strength: Assets under Management: Long Term

The company reported an improvement in its assets under management (AuMs) base in long run. In FY2019, its AuMs increased 24.3% to US$7,429.6 billion from US$5,975.8 billion, due to net market appreciation and positive net flows across all investment styles and product types. During the period of five-years, its AuM grew with a CAGR of 10%. The growth was facilitated by the net market valuation gains; net inflows and acquisitions, including BKCA, FutureAdvisor, and Infraestructura Institucional, which contributed over US$2.2 billion in FY2015; BofA Global Capital Management added US$80.6 billion in FY2016; First Reserve added US$3.3 billion in FY2017. It was also complemented by the net AuM results from the TCP Transaction, the Aegon Transaction, the DSP Transaction, the Citibanamex Transaction, and which collectively enhanced its AuMs by US27.5 billion in FY2018. Business Diversification BlackRock offers a broad range of investment and risk management services to institutional and retail clients worldwide. These diverse capabilities span the global capital markets and permit the company to serve a wide variety of investor interests. Its diverse platform of index and cash management investment strategies across various asset classes allows it to provide customized investment outcomes and asset allocation solutions to its clients. In FY2019, 52% of the company generated long term AuMs from equity products, fixed income (31%), multi-asset class (8%), alternative (2%); and 7% from cash management, and negligible contribution from advisory mandates. The company manages 70% assets for clients in the Americas, 25% in Europe, the Middle East and Africa (EMEA), and 5% in Asia-Pacific. The company's client base includes tax-exempt institutions, such as public and private pension plans, foundations, endowments, official institutions, financial institutions, insurance companies, corporations, third-party fund sponsors, and retail investors. Based on client type, institutional clients accounted for 57% of the company's AuMs, followed by iShares ETFs (33%), and retail customers (10%) Asset Flows: iShares ETFs

Robust asset flows through iShares exchange-traded funds (ETFs) contributed towards the company's AuMs. iShares is among the leading ETFs provider in the world, with over US$2.2 trillion AuM, as of December 31, 2019. During the year, iShares ETFs accounted for 33% of long-term AuM and 41% of long-term base fees. It was the top global asset gatherer with net inflows of US$183.5 billion, which drove an organic growth rate of 11%. The inflows were primarily driven by US$112.4 billion from varied exposures and product lines, US$64.7 billion from factor-based ETFs and core funds; and US$6.4 million from alternative funds and iShares ETF multi-asset.

Weakness Cost Efficiency The company reported minor deterioration in its cost efficiency, which affected its profitability. In FY2019, its efficiency ratio stood at 61.82%, as compared to 61.57% in the previous year. The ratio indicates operating expenses as a percentage of revenue. During the year, its operating expenses increased 2.8% to US$8,988 million from US$8,741 million, due to higher employee compensation and benefits, distribution and servicing costs, and general and administrative expense. The company's revenue grew 13.6% to US$14,539 million from US$14,198 million, resulting from the higher investment advisory, administration fees, and securities lending revenue; investment advisory performance fees, and technology services revenue. Opportunity Strategic Partnerships The company has been taking several strategic partnerships, which could help it to expand its business scale. In April 2020, it entered into a strategic alliance with Microsoft Corp to introduce BlackRock's Aladdin infrastructure on the Microsoft Azure cloud platform. The partnership enables innovation on Aladdin, which enhances the customer experience through new capabilities and higher computing scale. In April 2019, the company partnered with The Bank of New York Mellon Corporation (BNY Mellon) to provide integrated technology, data, and asset management servicing capabilities to common clients. The alliance integrates BNY Mellon's accounting, data insights, and servicing tools with the company's platform, Aladdin. In January 2019, the company's subsidiary BlackRock Asset Management Canada Limited entered into a strategic partnership with RBC Global Asset Management Inc. Together, both the company's will provide ETFs under one brand, RBC iShares. The initiative will provide a US$60 billion solution suite, which represents Canada's largest and most comprehensive ETF offering, including factor, index, active strategies, and quantitative. Growing Wealth Management Prospects: The US The growing wealthy population in the US may provide ample growth opportunities to private banking/wealth management providers. According to in-house research, the population is projected to reach 204.4 million by 2020, including high net worth individuals (HNWIs) to 5.4 million and mass affluent to 199 million. The retail wealth of the population is forecasted to reach US$51,637.9 billion, including the wealth of HNWIs and mass affluent to US$19,331.2 billion and US$32,306.8 billion, respectively. The growth is expected to be driven by increasing retail savings and positive investments in the market on the back of optimistic economic forecast, corporate tax cuts, and focus on alternative investments. Regulatory Changes: DOL Rule The company could benefit from the recent change in the regulatory framework in the wealth management sector. In June 2018, The Fifth Circuit Court of Appeals took a decision to eliminate the Department of Labor (DOL) Rule, which was issued in April 2016. The elimination of the rule could enhance the gains by reducing compliance costs, and facilitating fee and commissions of the advisor firms. The DOL rule had increased the compliance costs mainly in the broker-dealer world. Under the rule, it also required advisors to act in the best interest of customers and disclose all commissions and fee to be disclosed to clients in terms of US Dollar and bounded all advisors, agents, brokers, and financial planners to provide clients a disclosure agreement, called a Best Interest Contract Exemption, in case of any conflict in interest. Corporate Tax Cuts in the US Corporations across the US would benefit from the corporate tax cut bill, which was signed into law in December 2017. Financial service firms are expected to be among the biggest gainers as they pay tax at some of the highest rates in the country. Banks could benefit from increase in borrowing by businesses. Along with increase in borrowing, higher interest rates will increase the banks' profit margins further. Banks with overseas businesses would become more competitive, relative to their international counterparts in countries with lower corporate tax rates. The bill includes provisions related to the repatriation of overseas cash, which could enhance mergers and acquisitions in the US that spur investment banking. Wealth management firms are also likely to register substantial growth in their assets under management as the bill reduces tax rates for the wealthy. Most of corporate America is likely to increase dividends and share buybacks that would aid growth of the US equity markets, increasing the value of investments held by asset managers. Strategic Initiatives Strategic initiatives are likely to have a positive impact on the company's business performance. In March 2020, the company has increased its minority stake in iCapital. The initiative provides a nonoperating pretax gain in the first quarter of earning results. In May 2019, it acquired eFront, which is an alternative investment management software and related solutions provider. The acquisition is expected to expand the company's platform Aladdin's processing capabilities in alternative asset classes. Threat Fee Pressures The company could face further revenue pressure due to the change in industry mix, which leads to a decline in fee yields. The investment industry has been leaning towards less risky products and fund types such as fixed-income and other passive assets, which generate lower fees income than equity products. According to the Investment Company Institute data, the sectors' total fees have been continuously decreasing across fund asset classes for over three decades. Also, strong US dollar intensifies the fee pressure for the US asset managers with global operations, resulting in negative translation effects on assets and revenue over the past few years. Crowded Robo Advisor Field The asset and wealth management industry is undergoing a thoughtful transformation with old-style methods of delivering financial advice being disrupted by new and innovative forms of technology such as robo-advisors. Robo-advisors offer tailored, automated financial advice based on algorithms and helps investors in identifying stocks or other investment options that meet the pre-defined requirements such as investment timeline and risk tolerance. These robo-advisors are also helping retail investors in portfolio rebalancing and tax-loss harvesting. As the adoption of robo-advisors is increasing due to the adoption of the internet and digital devices, start-up companies are passing on the benefits of reduced administration expenses in the form of reduced trading charges, which is affecting the traditional brokerage companies' financial performance. This results in increasing expenditure in the investment on the latest technologies, which could increase their operating costs and affect profits. Covid-19 Pandemic Affecting Financial Stability Emergence of the Covid-19 virus have created a moderate to adverse effect on global economies throughout, which could impact the banking sector as well. However, due to higher capital and liquidity positions than the level at 2008 financial crisis, banks are expected to be more resilient despite declining share prices. Supervisory authorities have been advised to monitor the development of the banks given the temporary nature of the outbreak. However certain regions, which were impacted due to economic downturns prior to the Covid-19 outbreak, could be more adversely affected. Reacting to the turmoil in the financial markets and providing economic stimulus, the Bank of England reduced its base rate by 50 basis points from 0.75% to 0.25%. The US Federal Reserve and Bank of Canada reduced their policy rates to nearly 0% and 1.25% respectively; echoing global sentiments of economic downturn and sharp declines in stock markets, consequently hampering the emerging market and high yield bonds. As a result of the uncertainty of this outbreak, banks are expected to consider a temporary restructuring of loan terms for the most-affected borrowers. A third-party company produces a SWOT analysis report for your organization, which identified several opportunities and threats. The CEO has asked each business line within your organization to have several business cases and develop several project proposals to implement the change needed to address the items listed in the report. The PMO has been developing the capability of expertise in developing quality business cases and project proposals. Therefore, the PMO director asked your PMs group to make a lightweight draft of a business case and one project proposal read the SWOT analysis report, pick one opportunity or threat to address, and develop a business case document.

QUESTION: 1. Defining Business needs

2. Identify at least three options that can implement the identified needs.

3. Recommend one of these options and justify your selection