Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups
Collaborating with investor networks generated in the course of equity-based crowdfunding campaigns can contribute to the success of startup firms. Through a qualitative study of 60 European startups, this article identifies the type of inputs provided by equity investors, how these inputs are related to startups' and founders' characteristics, and startups' later performance. Startups exploiting crowd network are more likely to be successful two years later compared with startups that do not exploit the crowd, or acquire from the crowd product, strategy, or market knowledge. The findings extend existing research on the relationships between open innovation and startups by identifying the inputs provided by the crowd and how the use of crowd equity investors in open innovation platforms is related to later success.
Authors :: Francesca Di Pietro, Andrea Prencipe, Ann Majchrzak
Swot Analysis of "Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups" written by Francesca Di Pietro, Andrea Prencipe, Ann Majchrzak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Startups Crowd facing as an external strategic factors. Some of the topics covered in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups case study are - Strategic Management Strategies, Knowledge management, Networking, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, increasing energy prices, increasing household debt because of falling income levels, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Startups Crowd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Startups Crowd 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups can be done for the following purposes –
1. Strategic planning using facts provided in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups case study
2. Improving business portfolio management of Startups Crowd
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Startups Crowd
Strengths Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Startups Crowd in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups Harvard Business Review case study are -
High brand equity
– Startups Crowd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Startups Crowd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Startups Crowd has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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.
Successful track record of launching new products
– Startups Crowd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Startups Crowd 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.
Operational resilience
– The operational resilience strategy in the Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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.
Analytics focus
– Startups Crowd 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 Francesca Di Pietro, Andrea Prencipe, Ann Majchrzak 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 Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Startups Crowd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Startups Crowd has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Startups Crowd 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.
Ability to recruit top talent
– Startups Crowd is one of the leading recruiters in the industry. Managers in the Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Startups Crowd
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Startups Crowd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Startups Crowd in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Startups Crowd is present in almost all the verticals within the industry. This has provided firm in Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups firm has clearly differentiated products in the market place. This has enabled Startups Crowd to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Startups Crowd to invest into research and development (R&D) and innovation.
Weaknesses Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups are -
Low market penetration in new markets
– Outside its home market of Startups Crowd, firm in the HBR case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Startups Crowd 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Startups Crowd has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups, is just above the industry average. Startups Crowd 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, Startups Crowd 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.
Capital Spending Reduction
– Even during the low interest decade, Startups Crowd 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.
Interest costs
– Compare to the competition, Startups Crowd 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.
Aligning sales with marketing
– It come across in the case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups can leverage the sales team experience to cultivate customer relationships as Startups Crowd is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups, in the dynamic environment Startups Crowd has struggled to respond to the nimble upstart competition. Startups Crowd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups HBR case study mentions - Startups Crowd takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Startups Crowd 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.
Opportunities Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups | 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Startups Crowd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Startups Crowd has opened avenues for new revenue streams for the organization in the industry. This can help Startups Crowd to build a more holistic ecosystem as suggested in the Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups case study. Startups Crowd can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Startups Crowd 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, Startups Crowd 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Startups Crowd 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. Startups Crowd 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. Startups Crowd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Startups Crowd to increase its market reach. Startups Crowd 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.
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 Startups Crowd 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.
Developing new processes and practices
– Startups Crowd can develop new processes and procedures in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Startups Crowd 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Startups Crowd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Startups Crowd 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 Innovation & Entrepreneurship segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Startups Crowd is facing challenges because of the dominance of functional experts in the organization. Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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.
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 Startups Crowd in the consumer business. Now Startups Crowd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups are -
High dependence on third party suppliers
– Startups Crowd 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.
Regulatory challenges
– Startups Crowd 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 Innovation & Entrepreneurship industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Startups Crowd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Startups Crowd 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. Startups Crowd 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.
Environmental challenges
– Startups Crowd 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. Startups Crowd can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship 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. Startups Crowd needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups, Startups Crowd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Shortening product life cycle
– it is one of the major threat that Startups Crowd is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Startups Crowd 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.
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 Startups Crowd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Startups Crowd
– 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 Startups Crowd.
Weighted SWOT Analysis of Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Crowd Equity Investors: An Underutilized Asset for Open Innovation in Startups 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 Startups Crowd needs to make to build a sustainable competitive advantage.
