Case Study Description of Aspire Inc.: Financing Options for Healthier Nonprofits
This case focuses on the financial health of Aspire, a forty-year-old nonprofit organization serving the needs of the developmentally disabled. To meet the residential, educational, and vocational needs of its clients, Aspire has grown significantly by expanding services and buying residences. As a nonprofit organization, Aspire has to consider financial implications and organizational/mission concerns as it explores the purchase of a building and the consolidation of administrative activities. The case enables students to explore the strengths and weaknesses of Aspire's financial situation, the primary financial indicators that different types of lenders would consider, as well as the financial and organizational costs and benefits to Aspire for the various lending options. The case profiles several different types of financing options, including traditional bank loans, the issuance of tax-exempt bonds, and the participation of a community development financial institution. Students are asked to do analysis and recommend a financing choice for Aspire. The case is based on work that the Illinois Facilities Fund, an Illinois community development finance institution, did with Aspire in 2000.
Authors :: Elizabeth Keating, Kelly Austin, Michelle Colman
Swot Analysis of "Aspire Inc.: Financing Options for Healthier Nonprofits" written by Elizabeth Keating, Kelly Austin, Michelle Colman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aspire Illinois facing as an external strategic factors. Some of the topics covered in Aspire Inc.: Financing Options for Healthier Nonprofits case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the Aspire Inc.: Financing Options for Healthier Nonprofits casestudy better are - – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing commodity prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing government debt because of Covid-19 spendings,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Aspire Inc.: Financing Options for Healthier Nonprofits
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aspire Inc.: Financing Options for Healthier Nonprofits case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aspire Illinois, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aspire Illinois 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 Aspire Inc.: Financing Options for Healthier Nonprofits can be done for the following purposes –
1. Strategic planning using facts provided in Aspire Inc.: Financing Options for Healthier Nonprofits case study
2. Improving business portfolio management of Aspire Illinois
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 Aspire Illinois
Strengths Aspire Inc.: Financing Options for Healthier Nonprofits | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aspire Illinois in Aspire Inc.: Financing Options for Healthier Nonprofits Harvard Business Review case study are -
Analytics focus
– Aspire Illinois 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 Elizabeth Keating, Kelly Austin, Michelle Colman 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Aspire Illinois digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aspire Illinois 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.
Diverse revenue streams
– Aspire Illinois is present in almost all the verticals within the industry. This has provided firm in Aspire Inc.: Financing Options for Healthier Nonprofits 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.
Organizational Resilience of Aspire Illinois
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aspire Illinois does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Aspire Illinois 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 Aspire Inc.: Financing Options for Healthier Nonprofits - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Organizational Development field
– Aspire Illinois 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 Aspire Illinois in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Aspire Illinois 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.
Training and development
– Aspire Illinois has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aspire Inc.: Financing Options for Healthier Nonprofits 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.
Highly skilled collaborators
– Aspire Illinois has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Aspire Inc.: Financing Options for Healthier Nonprofits HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Aspire Illinois is one of the most innovative firm in sector. Manager in Aspire Inc.: Financing Options for Healthier Nonprofits Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Aspire Illinois in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Aspire Illinois 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 Aspire Illinois is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aspire Inc.: Financing Options for Healthier Nonprofits Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Aspire Inc.: Financing Options for Healthier Nonprofits | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aspire Inc.: Financing Options for Healthier Nonprofits are -
Interest costs
– Compare to the competition, Aspire Illinois 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, Aspire Illinois 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.
Products dominated business model
– Even though Aspire Illinois 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 - Aspire Inc.: Financing Options for Healthier Nonprofits should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Aspire Inc.: Financing Options for Healthier Nonprofits HBR case study mentions - Aspire Illinois 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.
Need for greater diversity
– Aspire Illinois 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aspire Inc.: Financing Options for Healthier Nonprofits, is just above the industry average. Aspire Illinois 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Aspire Inc.: Financing Options for Healthier Nonprofits, it seems that the employees of Aspire Illinois don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aspire Illinois is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aspire Inc.: Financing Options for Healthier Nonprofits can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Elizabeth Keating, Kelly Austin, Michelle Colman suggests that, Aspire Illinois is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Illinois has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Aspire Illinois 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. Aspire Illinois 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.
Opportunities Aspire Inc.: Financing Options for Healthier Nonprofits | 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 Aspire Inc.: Financing Options for Healthier Nonprofits are -
Creating value in data economy
– The success of analytics program of Aspire Illinois has opened avenues for new revenue streams for the organization in the industry. This can help Aspire Illinois to build a more holistic ecosystem as suggested in the Aspire Inc.: Financing Options for Healthier Nonprofits case study. Aspire Illinois can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Aspire Illinois can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aspire Illinois 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, Aspire Inc.: Financing Options for Healthier Nonprofits, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Aspire Illinois in the consumer business. Now Aspire Illinois can target international markets with far fewer capital restrictions requirements than the existing system.
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. Aspire Illinois can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Aspire Illinois 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 Aspire Inc.: Financing Options for Healthier Nonprofits - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aspire Illinois to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aspire Illinois 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
– Aspire Illinois 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.
Developing new processes and practices
– Aspire Illinois can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aspire Illinois 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.
Building a culture of innovation
– managers at Aspire Illinois can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Manufacturing automation
– Aspire Illinois 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.
Buying journey improvements
– Aspire Illinois can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aspire Inc.: Financing Options for Healthier Nonprofits 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.
Threats Aspire Inc.: Financing Options for Healthier Nonprofits External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aspire Inc.: Financing Options for Healthier Nonprofits are -
Increasing wage structure of Aspire Illinois
– 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 Aspire Illinois.
Technology acceleration in Forth Industrial Revolution
– Aspire Illinois has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Aspire Illinois 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, Aspire Illinois 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 Aspire Inc.: Financing Options for Healthier Nonprofits .
Stagnating economy with rate increase
– Aspire Illinois 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Aspire Illinois will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Aspire Illinois 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.
Consumer confidence and its impact on Aspire Illinois 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aspire Illinois 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aspire Inc.: Financing Options for Healthier Nonprofits, Aspire Illinois 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 .
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. Aspire Illinois can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Aspire Illinois needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aspire Illinois with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Inc.: Financing Options for Healthier Nonprofits 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 Aspire Illinois needs to make to build a sustainable competitive advantage.