Case Study Description of Venture Capitalist as Entrepreneur
Introduces students to negotiations between venture capitalists (VCs) and the limited partners who provide the VCs' capital. Also discusses negotiations between VCs and other VCs, including those within a VC firm itself. Explores interests, sources of negotiating power, barriers to reaching agreement, and common contractual terms. Describes how the parties try to reduce information asymmetries, align incentives, control decision making, and protect financial downside.
Swot Analysis of "Venture Capitalist as Entrepreneur" written by Robert J. Robinson, Noam Wasserman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vcs Negotiations facing as an external strategic factors. Some of the topics covered in Venture Capitalist as Entrepreneur case study are - Strategic Management Strategies, Motivating people, Negotiations, Venture capital and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Venture Capitalist as Entrepreneur casestudy better are - – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing transportation and logistics costs,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Venture Capitalist as Entrepreneur
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Venture Capitalist as Entrepreneur case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vcs Negotiations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vcs Negotiations 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 Capitalist as Entrepreneur can be done for the following purposes –
1. Strategic planning using facts provided in Venture Capitalist as Entrepreneur case study
2. Improving business portfolio management of Vcs Negotiations
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vcs Negotiations
Strengths Venture Capitalist as Entrepreneur | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vcs Negotiations in Venture Capitalist as Entrepreneur Harvard Business Review case study are -
Diverse revenue streams
– Vcs Negotiations is present in almost all the verticals within the industry. This has provided firm in Venture Capitalist as Entrepreneur 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.
Innovation driven organization
– Vcs Negotiations is one of the most innovative firm in sector. Manager in Venture Capitalist as Entrepreneur Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Vcs Negotiations 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 Capitalist as Entrepreneur - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Vcs Negotiations 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 Robert J. Robinson, Noam Wasserman 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.
Training and development
– Vcs Negotiations has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Venture Capitalist as Entrepreneur 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.
Low bargaining power of suppliers
– Suppliers of Vcs Negotiations in the sector have low bargaining power. Venture Capitalist as Entrepreneur has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vcs Negotiations to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Vcs Negotiations is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Vcs Negotiations 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 Venture Capitalist as Entrepreneur HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Vcs Negotiations has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Vcs Negotiations digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vcs Negotiations 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.
Operational resilience
– The operational resilience strategy in the Venture Capitalist as Entrepreneur 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.
Learning organization
- Vcs Negotiations 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 Vcs Negotiations is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Venture Capitalist as Entrepreneur Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Venture Capitalist as Entrepreneur | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Venture Capitalist as Entrepreneur are -
Skills based hiring
– The stress on hiring functional specialists at Vcs Negotiations has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Vcs Negotiations products
– To increase the profitability and margins on the products, Vcs Negotiations needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Venture Capitalist as Entrepreneur, is just above the industry average. Vcs Negotiations 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Vcs Negotiations 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.
Slow decision making process
– As mentioned earlier in the report, Vcs Negotiations 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. Vcs Negotiations 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.
Increasing silos among functional specialists
– The organizational structure of Vcs Negotiations is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Vcs Negotiations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vcs Negotiations to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Vcs Negotiations 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Venture Capitalist as Entrepreneur 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 Vcs Negotiations has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Venture Capitalist as Entrepreneur that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Venture Capitalist as Entrepreneur can leverage the sales team experience to cultivate customer relationships as Vcs Negotiations is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Vcs Negotiations, firm in the HBR case study Venture Capitalist as Entrepreneur needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Venture Capitalist as Entrepreneur 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 Vcs Negotiations 's lucrative customers.
Opportunities Venture Capitalist as Entrepreneur | 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 Capitalist as Entrepreneur are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vcs Negotiations can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Vcs Negotiations can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Loyalty marketing
– Vcs Negotiations 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.
Building a culture of innovation
– managers at Vcs Negotiations 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 Strategy & Execution segment.
Leveraging digital technologies
– Vcs Negotiations can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vcs Negotiations can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vcs Negotiations 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 Vcs Negotiations to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Vcs Negotiations can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Creating value in data economy
– The success of analytics program of Vcs Negotiations has opened avenues for new revenue streams for the organization in the industry. This can help Vcs Negotiations to build a more holistic ecosystem as suggested in the Venture Capitalist as Entrepreneur case study. Vcs Negotiations can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vcs Negotiations can use these opportunities to build new business models that can help the communities that Vcs Negotiations operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Vcs Negotiations can develop new processes and procedures in Strategy & Execution 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.
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. Vcs Negotiations can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vcs Negotiations is facing challenges because of the dominance of functional experts in the organization. Venture Capitalist as Entrepreneur 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Vcs Negotiations can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Venture Capitalist as Entrepreneur External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Venture Capitalist as Entrepreneur are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vcs Negotiations can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Vcs Negotiations is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Vcs Negotiations 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. Vcs Negotiations can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Vcs Negotiations needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Vcs Negotiations 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 Vcs Negotiations in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Vcs Negotiations
– 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 Vcs Negotiations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Vcs Negotiations.
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.
Technology acceleration in Forth Industrial Revolution
– Vcs Negotiations has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Vcs Negotiations needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Capitalist as Entrepreneur, Vcs Negotiations may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Regulatory challenges
– Vcs Negotiations needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vcs Negotiations 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 Venture Capitalist as Entrepreneur 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 Capitalist as Entrepreneur 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 Capitalist as Entrepreneur 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 Capitalist as Entrepreneur 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 Capitalist as Entrepreneur 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 Vcs Negotiations needs to make to build a sustainable competitive advantage.