Case Study Description of AgriSmart: Funding New Corporate Ventures
In early 2017, the chief executive officer of AgriSmart, a German start-up company within the Bosch start-up platform, was preparing for an important upcoming board meeting. She needed to explain why AgriSmart had deviated from its original financial plan, seek approval for its upcoming budget, and convince Bosch's board that the company deserved further funding. In preparing the company's forecasts to share with the board, the chief executive officer also needed to prepare for all possible questions from the directors regarding AgriSmart's past performance and the assumptions going forward. Antonio Davila is affiliated with IESE Publishing.
Swot Analysis of "AgriSmart: Funding New Corporate Ventures" written by Marc Wouters, Antonio Davila includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Agrismart Agrismart's facing as an external strategic factors. Some of the topics covered in AgriSmart: Funding New Corporate Ventures case study are - Strategic Management Strategies, Financial analysis, Manufacturing, Performance measurement and Global Business.
Some of the macro environment factors that can be used to understand the AgriSmart: Funding New Corporate Ventures casestudy better are - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, technology disruption, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of AgriSmart: Funding New Corporate Ventures
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AgriSmart: Funding New Corporate Ventures case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agrismart Agrismart's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agrismart Agrismart's 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 AgriSmart: Funding New Corporate Ventures can be done for the following purposes –
1. Strategic planning using facts provided in AgriSmart: Funding New Corporate Ventures case study
2. Improving business portfolio management of Agrismart Agrismart's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Agrismart Agrismart's
Strengths AgriSmart: Funding New Corporate Ventures | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agrismart Agrismart's in AgriSmart: Funding New Corporate Ventures Harvard Business Review case study are -
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Agrismart Agrismart's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Agrismart Agrismart's 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.
Low bargaining power of suppliers
– Suppliers of Agrismart Agrismart's in the sector have low bargaining power. AgriSmart: Funding New Corporate Ventures has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Agrismart Agrismart's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the AgriSmart: Funding New Corporate Ventures 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.
Successful track record of launching new products
– Agrismart Agrismart's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Agrismart Agrismart's 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.
Analytics focus
– Agrismart Agrismart's 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 Marc Wouters, Antonio Davila 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.
Effective Research and Development (R&D)
– Agrismart Agrismart's 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 AgriSmart: Funding New Corporate Ventures - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Agrismart Agrismart's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Agrismart Agrismart's is present in almost all the verticals within the industry. This has provided firm in AgriSmart: Funding New Corporate Ventures 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.
High brand equity
– Agrismart Agrismart's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agrismart Agrismart's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Agrismart Agrismart's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Agrismart Agrismart's 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 Agrismart Agrismart's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AgriSmart: Funding New Corporate Ventures Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Agrismart Agrismart's is one of the leading recruiters in the industry. Managers in the AgriSmart: Funding New Corporate Ventures are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses AgriSmart: Funding New Corporate Ventures | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AgriSmart: Funding New Corporate Ventures are -
Capital Spending Reduction
– Even during the low interest decade, Agrismart Agrismart's 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.
No frontier risks strategy
– After analyzing the HBR case study AgriSmart: Funding New Corporate Ventures, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AgriSmart: Funding New Corporate Ventures 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 Agrismart Agrismart's has relatively successful track record of launching new products.
Products dominated business model
– Even though Agrismart Agrismart's 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 - AgriSmart: Funding New Corporate Ventures should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Marc Wouters, Antonio Davila suggests that, Agrismart Agrismart's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Agrismart Agrismart's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AgriSmart: Funding New Corporate Ventures can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study AgriSmart: Funding New Corporate Ventures 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 Agrismart Agrismart's 's lucrative customers.
Need for greater diversity
– Agrismart Agrismart's 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.
Interest costs
– Compare to the competition, Agrismart Agrismart's 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.
Slow decision making process
– As mentioned earlier in the report, Agrismart Agrismart's 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. Agrismart Agrismart's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AgriSmart: Funding New Corporate Ventures, in the dynamic environment Agrismart Agrismart's has struggled to respond to the nimble upstart competition. Agrismart Agrismart's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities AgriSmart: Funding New Corporate Ventures | 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 AgriSmart: Funding New Corporate Ventures are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agrismart Agrismart's can use these opportunities to build new business models that can help the communities that Agrismart Agrismart's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Agrismart Agrismart's is facing challenges because of the dominance of functional experts in the organization. AgriSmart: Funding New Corporate Ventures 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.
Leveraging digital technologies
– Agrismart Agrismart's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Agrismart Agrismart's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, AgriSmart: Funding New Corporate Ventures, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Agrismart Agrismart's 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.
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. Agrismart Agrismart's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Agrismart Agrismart's 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 AgriSmart: Funding New Corporate Ventures - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agrismart Agrismart's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Agrismart Agrismart's can develop new processes and procedures in Global Business 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Agrismart Agrismart's 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 Agrismart Agrismart's to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Agrismart Agrismart's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Agrismart Agrismart's 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.
Creating value in data economy
– The success of analytics program of Agrismart Agrismart's has opened avenues for new revenue streams for the organization in the industry. This can help Agrismart Agrismart's to build a more holistic ecosystem as suggested in the AgriSmart: Funding New Corporate Ventures case study. Agrismart Agrismart's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Agrismart Agrismart's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AgriSmart: Funding New Corporate Ventures suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats AgriSmart: Funding New Corporate Ventures External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AgriSmart: Funding New Corporate Ventures 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. Agrismart Agrismart's 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.
Regulatory challenges
– Agrismart Agrismart's 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 Global Business industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Agrismart Agrismart's in the Global Business industry. The Global Business 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.
Environmental challenges
– Agrismart Agrismart's 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. Agrismart Agrismart's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology acceleration in Forth Industrial Revolution
– Agrismart Agrismart's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Agrismart Agrismart's needs to keep up with the evolution of technology in the Global Business 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.
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 Agrismart Agrismart's in the Global Business sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Agrismart Agrismart's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Agrismart Agrismart's
– 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 Agrismart Agrismart's.
Stagnating economy with rate increase
– Agrismart Agrismart's 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.
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 Agrismart Agrismart's.
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 Agrismart Agrismart's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Agrismart Agrismart's 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.
Weighted SWOT Analysis of AgriSmart: Funding New Corporate Ventures 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 AgriSmart: Funding New Corporate Ventures 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 AgriSmart: Funding New Corporate Ventures 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 AgriSmart: Funding New Corporate Ventures 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 AgriSmart: Funding New Corporate Ventures 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 Agrismart Agrismart's needs to make to build a sustainable competitive advantage.