Carmichael Roberts: To Create a Private Equity Firm? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Carmichael Roberts: To Create a Private Equity Firm?
Carmichael Roberts, a rare African-American venture capitalist, considered leaving his general partnership in a private equity firm near Boston and setting up his own in 2015. He weighed whether the timing is right, with the economy still not fully recovered from the Great Recession of 2007-2009. Where to base such a firm was another factor in his decision-making. A member of the board of the National Venture Capital Association, Roberts knew the industry was gravitating to the San Francisco Bay area, to invest in the social media and software startups centered there. His specialty and passion was bringing to market new products made from advanced materials that help people solve problems in their daily lives. That investment focus on manufacturing would go against the private equity trend, another factor he considered. But he knew few, if any, general partners at major private equity firms were focused singularly on the kinds of businesses he wanted to invest in. Roberts also took into account the possible impact on his mutually respectful relations with his fellow partners. From a housing project in Brooklyn, New York, Roberts became a scientist who did advanced study at Duke and Harvard, capped off with an MBA from MIT. He had experience as a developer of technical products for Fortune 500 companies, an executive of cutting-edge startups, and a venture capitalist for eight years. This case study also reviews how private equity investment works, the private equity spectrum, the history of venture capital, stages of venture capital funds, and their location.
Swot Analysis of "Carmichael Roberts: To Create a Private Equity Firm?" written by Steven Rogers, Kenneth Cooper includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Roberts Equity facing as an external strategic factors. Some of the topics covered in Carmichael Roberts: To Create a Private Equity Firm? case study are - Strategic Management Strategies, Budgeting, Corporate governance, Innovation, Joint ventures, Technology, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Carmichael Roberts: To Create a Private Equity Firm? casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, wage bills are increasing, there is backlash against globalization,
digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, etc
Introduction to SWOT Analysis of Carmichael Roberts: To Create a Private Equity Firm?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Carmichael Roberts: To Create a Private Equity Firm? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Roberts Equity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Roberts Equity 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 Carmichael Roberts: To Create a Private Equity Firm? can be done for the following purposes –
1. Strategic planning using facts provided in Carmichael Roberts: To Create a Private Equity Firm? case study
2. Improving business portfolio management of Roberts Equity
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 Roberts Equity
Strengths Carmichael Roberts: To Create a Private Equity Firm? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Roberts Equity in Carmichael Roberts: To Create a Private Equity Firm? Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Roberts Equity in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Roberts Equity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Roberts Equity has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– Roberts Equity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Roberts Equity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Roberts Equity in the sector have low bargaining power. Carmichael Roberts: To Create a Private Equity Firm? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Roberts Equity to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Roberts Equity 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 Carmichael Roberts: To Create a Private Equity Firm? - 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
– Roberts Equity 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 Steven Rogers, Kenneth Cooper 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.
Operational resilience
– The operational resilience strategy in the Carmichael Roberts: To Create a Private Equity Firm? 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
– Roberts Equity is present in almost all the verticals within the industry. This has provided firm in Carmichael Roberts: To Create a Private Equity Firm? 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.
Ability to recruit top talent
– Roberts Equity is one of the leading recruiters in the industry. Managers in the Carmichael Roberts: To Create a Private Equity Firm? 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
– Roberts Equity is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Finance & Accounting field
– Roberts Equity 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 Roberts Equity 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 Roberts Equity 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.
Weaknesses Carmichael Roberts: To Create a Private Equity Firm? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Carmichael Roberts: To Create a Private Equity Firm? are -
High cash cycle compare to competitors
Roberts Equity 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.
Increasing silos among functional specialists
– The organizational structure of Roberts Equity is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Roberts Equity needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Roberts Equity to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Roberts Equity 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 Roberts Equity 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 - Carmichael Roberts: To Create a Private Equity Firm? should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Carmichael Roberts: To Create a Private Equity Firm?, it seems that the employees of Roberts Equity 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, Roberts Equity is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Carmichael Roberts: To Create a Private Equity Firm? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Roberts Equity 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.
Skills based hiring
– The stress on hiring functional specialists at Roberts Equity 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 existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Roberts Equity supply chain. Even after few cautionary changes mentioned in the HBR case study - Carmichael Roberts: To Create a Private Equity Firm?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Roberts Equity vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Carmichael Roberts: To Create a Private Equity Firm? 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 Roberts Equity has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Carmichael Roberts: To Create a Private Equity Firm? 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 Roberts Equity 's lucrative customers.
Opportunities Carmichael Roberts: To Create a Private Equity Firm? | 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 Carmichael Roberts: To Create a Private Equity Firm? are -
Better consumer reach
– The expansion of the 5G network will help Roberts Equity to increase its market reach. Roberts Equity 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Roberts Equity can use these opportunities to build new business models that can help the communities that Roberts Equity operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Roberts Equity 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Roberts Equity in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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. Roberts Equity can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Roberts Equity in the consumer business. Now Roberts Equity can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Roberts Equity 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.
Leveraging digital technologies
– Roberts Equity 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Roberts Equity is facing challenges because of the dominance of functional experts in the organization. Carmichael Roberts: To Create a Private Equity Firm? 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.
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. Roberts Equity 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. Roberts Equity 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.
Creating value in data economy
– The success of analytics program of Roberts Equity has opened avenues for new revenue streams for the organization in the industry. This can help Roberts Equity to build a more holistic ecosystem as suggested in the Carmichael Roberts: To Create a Private Equity Firm? case study. Roberts Equity can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Roberts Equity 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 Roberts Equity to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Roberts Equity can develop new processes and procedures in Finance & Accounting 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.
Threats Carmichael Roberts: To Create a Private Equity Firm? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Carmichael Roberts: To Create a Private Equity Firm? are -
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.
Consumer confidence and its impact on Roberts Equity 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.
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 Roberts Equity.
Shortening product life cycle
– it is one of the major threat that Roberts Equity is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Roberts Equity 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 Carmichael Roberts: To Create a Private Equity Firm? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Carmichael Roberts: To Create a Private Equity Firm?, Roberts Equity 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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Roberts Equity business can come under increasing regulations regarding data privacy, data security, etc.
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. Roberts Equity can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Roberts Equity 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.
Increasing wage structure of Roberts Equity
– 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 Roberts Equity.
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.
Regulatory challenges
– Roberts Equity 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Roberts Equity 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.
Weighted SWOT Analysis of Carmichael Roberts: To Create a Private Equity Firm? 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 Carmichael Roberts: To Create a Private Equity Firm? 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 Carmichael Roberts: To Create a Private Equity Firm? 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 Carmichael Roberts: To Create a Private Equity Firm? 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 Carmichael Roberts: To Create a Private Equity Firm? 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 Roberts Equity needs to make to build a sustainable competitive advantage.