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 - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing energy prices, increasing commodity prices, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
cloud computing is disrupting traditional business models, wage bills are increasing, 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 -
Innovation driven organization
– Agrismart Agrismart's is one of the most innovative firm in sector. Manager in AgriSmart: Funding New Corporate Ventures Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Ability to lead change in Global Business field
– Agrismart Agrismart's 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 Agrismart Agrismart's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Agrismart Agrismart's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Agrismart Agrismart's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Highly skilled collaborators
– Agrismart Agrismart's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in AgriSmart: Funding New Corporate Ventures HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
High switching costs
– The high switching costs that Agrismart Agrismart's 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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Agrismart Agrismart's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As AgriSmart: Funding New Corporate Ventures HBR case study mentions - Agrismart Agrismart's 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 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.
Low market penetration in new markets
– Outside its home market of Agrismart Agrismart's, firm in the HBR case study AgriSmart: Funding New Corporate Ventures needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study AgriSmart: Funding New Corporate Ventures 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 AgriSmart: Funding New Corporate Ventures can leverage the sales team experience to cultivate customer relationships as Agrismart Agrismart's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Agrismart Agrismart's 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AgriSmart: Funding New Corporate Ventures, is just above the industry average. Agrismart Agrismart's 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.
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 -
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 Agrismart Agrismart's 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.
Manufacturing automation
– Agrismart Agrismart's can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Agrismart Agrismart's 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. Agrismart Agrismart's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Agrismart Agrismart's 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 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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Agrismart Agrismart's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
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.
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 -
High dependence on third party suppliers
– Agrismart Agrismart's 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AgriSmart: Funding New Corporate Ventures, Agrismart Agrismart's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Agrismart Agrismart's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agrismart Agrismart's 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 AgriSmart: Funding New Corporate Ventures .
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.
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.
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.
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.
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.
