Case Study Description of Venture Valuation AG: The Genedata Assignment
Venture Valuation conducts an independent valuation of Genedata, a Swiss start-up company in order to help Novartis Venture Fund analyze and structure the next financing round. Venture Valuation has to, given a very tight deadline, customize the evaluation process to using quantitative and qualitative data to best meet its customers needs. The case outlines the task ahead of Venture Valuation and requires students to make assessments and calculations and finally come up with a valuation for the startup, Genedata.
Authors :: Benoit Leleux, Atul Pahwa, Katrin Siebenburger
Swot Analysis of "Venture Valuation AG: The Genedata Assignment" written by Benoit Leleux, Atul Pahwa, Katrin Siebenburger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Genedata Valuation facing as an external strategic factors. Some of the topics covered in Venture Valuation AG: The Genedata Assignment case study are - Strategic Management Strategies, Financial analysis and Organizational Development.
Some of the macro environment factors that can be used to understand the Venture Valuation AG: The Genedata Assignment casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, there is increasing trade war between United States & China,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Venture Valuation AG: The Genedata Assignment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Venture Valuation AG: The Genedata Assignment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Genedata Valuation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Genedata Valuation 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 Venture Valuation AG: The Genedata Assignment can be done for the following purposes –
1. Strategic planning using facts provided in Venture Valuation AG: The Genedata Assignment case study
2. Improving business portfolio management of Genedata Valuation
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Genedata Valuation
Strengths Venture Valuation AG: The Genedata Assignment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Genedata Valuation in Venture Valuation AG: The Genedata Assignment Harvard Business Review case study are -
Analytics focus
– Genedata Valuation 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 Benoit Leleux, Atul Pahwa, Katrin Siebenburger 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.
Low bargaining power of suppliers
– Suppliers of Genedata Valuation in the sector have low bargaining power. Venture Valuation AG: The Genedata Assignment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Genedata Valuation to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Genedata Valuation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Genedata Valuation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Venture Valuation AG: The Genedata Assignment 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.
Diverse revenue streams
– Genedata Valuation is present in almost all the verticals within the industry. This has provided firm in Venture Valuation AG: The Genedata Assignment 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Genedata Valuation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Genedata Valuation 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.
High brand equity
– Genedata Valuation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Genedata Valuation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Genedata Valuation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Venture Valuation AG: The Genedata Assignment 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.
Effective Research and Development (R&D)
– Genedata Valuation 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 Venture Valuation AG: The Genedata Assignment - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Genedata Valuation is one of the most innovative firm in sector. Manager in Venture Valuation AG: The Genedata Assignment Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Organizational Development field
– Genedata Valuation 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 Genedata Valuation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Venture Valuation AG: The Genedata Assignment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Venture Valuation AG: The Genedata Assignment are -
Slow decision making process
– As mentioned earlier in the report, Genedata Valuation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Genedata Valuation even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Genedata Valuation 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.
Capital Spending Reduction
– Even during the low interest decade, Genedata Valuation 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Genedata Valuation 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.
Products dominated business model
– Even though Genedata Valuation has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Venture Valuation AG: The Genedata Assignment should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Venture Valuation AG: The Genedata Assignment 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 Genedata Valuation 's lucrative customers.
Lack of clear differentiation of Genedata Valuation products
– To increase the profitability and margins on the products, Genedata Valuation needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Venture Valuation AG: The Genedata Assignment HBR case study mentions - Genedata Valuation 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.
High cash cycle compare to competitors
Genedata Valuation 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Venture Valuation AG: The Genedata Assignment, is just above the industry average. Genedata Valuation 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.
Need for greater diversity
– Genedata Valuation 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.
Opportunities Venture Valuation AG: The Genedata Assignment | 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 Venture Valuation AG: The Genedata Assignment are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Genedata Valuation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Genedata Valuation can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Venture Valuation AG: The Genedata Assignment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Genedata Valuation 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 Genedata Valuation to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Genedata Valuation 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 Venture Valuation AG: The Genedata Assignment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Genedata Valuation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Genedata Valuation can use these opportunities to build new business models that can help the communities that Genedata Valuation operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Genedata Valuation is facing challenges because of the dominance of functional experts in the organization. Venture Valuation AG: The Genedata Assignment 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Genedata Valuation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Genedata Valuation 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.
Manufacturing automation
– Genedata Valuation can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Genedata Valuation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Genedata Valuation to increase its market reach. Genedata Valuation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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. Genedata Valuation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Genedata Valuation 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.
Threats Venture Valuation AG: The Genedata Assignment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Venture Valuation AG: The Genedata Assignment are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Genedata Valuation 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
– Genedata Valuation 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.
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. Genedata Valuation needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Genedata Valuation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Genedata Valuation 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. Genedata Valuation can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Genedata Valuation 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.
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 Genedata Valuation in the Organizational Development sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Genedata Valuation has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Genedata Valuation needs to keep up with the evolution of technology in the Organizational Development 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Genedata Valuation 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 Venture Valuation AG: The Genedata Assignment .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Venture Valuation AG: The Genedata Assignment, Genedata Valuation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Genedata Valuation in the Organizational Development industry. The Organizational Development 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.
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.
Consumer confidence and its impact on Genedata Valuation 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.
Weighted SWOT Analysis of Venture Valuation AG: The Genedata Assignment 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 Venture Valuation AG: The Genedata Assignment 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 Venture Valuation AG: The Genedata Assignment 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 Venture Valuation AG: The Genedata Assignment 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 Venture Valuation AG: The Genedata Assignment 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 Genedata Valuation needs to make to build a sustainable competitive advantage.