Case Study Description of Prairie Ventures Limited
The investment manager at Prairie Ventures Limited, a Saskatchewan based venture capital firm, is examining the merits of financing a management buyout of Crestline Coach, a manufacturer of ambulances and distributor of buses. Students must design a term sheet and create an appropriate financing package. Students are provided with an Excel model to assist in their analysis.
Swot Analysis of "Prairie Ventures Limited" written by James E. Hatch, Zhou Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prairie Ambulances facing as an external strategic factors. Some of the topics covered in Prairie Ventures Limited case study are - Strategic Management Strategies, Financial management, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Prairie Ventures Limited casestudy better are - – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, increasing energy prices, etc
Introduction to SWOT Analysis of Prairie Ventures Limited
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Prairie Ventures Limited case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prairie Ambulances, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prairie Ambulances 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 Prairie Ventures Limited can be done for the following purposes –
1. Strategic planning using facts provided in Prairie Ventures Limited case study
2. Improving business portfolio management of Prairie Ambulances
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Prairie Ambulances
Strengths Prairie Ventures Limited | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Prairie Ambulances in Prairie Ventures Limited Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Prairie Ambulances in the sector have low bargaining power. Prairie Ventures Limited has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Prairie Ambulances to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Prairie Ambulances
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prairie Ambulances does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Prairie Ambulances is one of the most innovative firm in sector. Manager in Prairie Ventures Limited Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Prairie Ambulances has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Prairie Ambulances to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Prairie Ambulances is one of the leading recruiters in the industry. Managers in the Prairie Ventures Limited are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Prairie Ambulances is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Prairie Ambulances 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.
Learning organization
- Prairie Ambulances 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 Prairie Ambulances is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Prairie Ventures Limited Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Prairie Ambulances is present in almost all the verticals within the industry. This has provided firm in Prairie Ventures Limited 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.
Cross disciplinary teams
– Horizontal connected teams at the Prairie Ambulances 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
– Prairie Ambulances has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Prairie Ventures Limited 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Prairie Ambulances digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Prairie Ambulances 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.
Weaknesses Prairie Ventures Limited | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Prairie Ventures Limited are -
Low market penetration in new markets
– Outside its home market of Prairie Ambulances, firm in the HBR case study Prairie Ventures Limited needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Prairie Ambulances 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Prairie Ventures Limited, it seems that the employees of Prairie Ambulances 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.
Interest costs
– Compare to the competition, Prairie Ambulances 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.
Lack of clear differentiation of Prairie Ambulances products
– To increase the profitability and margins on the products, Prairie Ambulances needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Prairie Ambulances 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Prairie Ventures Limited 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 Prairie Ambulances has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Prairie Ventures Limited, is just above the industry average. Prairie Ambulances 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.
High cash cycle compare to competitors
Prairie Ambulances 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.
Slow to strategic competitive environment developments
– As Prairie Ventures Limited HBR case study mentions - Prairie Ambulances 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 operating costs
– Compare to the competitors, firm in the HBR case study Prairie Ventures Limited 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 Prairie Ambulances 's lucrative customers.
Opportunities Prairie Ventures Limited | 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 Prairie Ventures Limited are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Prairie Ambulances to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Prairie Ambulances can use these opportunities to build new business models that can help the communities that Prairie Ambulances operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Prairie Ambulances can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Prairie Ventures Limited 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Prairie Ambulances can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Prairie Ambulances is facing challenges because of the dominance of functional experts in the organization. Prairie Ventures Limited 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.
Creating value in data economy
– The success of analytics program of Prairie Ambulances has opened avenues for new revenue streams for the organization in the industry. This can help Prairie Ambulances to build a more holistic ecosystem as suggested in the Prairie Ventures Limited case study. Prairie Ambulances can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Prairie Ambulances can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Prairie Ambulances 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. Prairie Ambulances 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.
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. Prairie Ambulances can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Prairie Ambulances 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 Prairie Ambulances to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Prairie Ambulances can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Better consumer reach
– The expansion of the 5G network will help Prairie Ambulances to increase its market reach. Prairie Ambulances 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.
Leveraging digital technologies
– Prairie Ambulances 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.
Threats Prairie Ventures Limited External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Prairie Ventures Limited are -
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. Prairie Ambulances 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.
Technology acceleration in Forth Industrial Revolution
– Prairie Ambulances has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Prairie Ambulances needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Prairie Ambulances in the Finance & Accounting industry. The Finance & Accounting 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.
Stagnating economy with rate increase
– Prairie Ambulances 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Prairie Ventures Limited, Prairie Ambulances may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Prairie Ambulances 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. Prairie Ambulances needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Prairie Ambulances
– 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 Prairie Ambulances.
Consumer confidence and its impact on Prairie Ambulances 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.
Regulatory challenges
– Prairie Ambulances 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 Finance & Accounting industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Prairie Ambulances with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Prairie Ambulances 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. Prairie Ambulances can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Prairie Ventures Limited 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 Prairie Ventures Limited 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 Prairie Ventures Limited 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 Prairie Ventures Limited 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 Prairie Ventures Limited 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 Prairie Ambulances needs to make to build a sustainable competitive advantage.