Case Study Description of Passion Connect: Turning Passion into Profit
In February 2017, the co-founders of Passion Connect were considering potential monetization strategies for their company. Passion Connect was an online platform based in Bangalore, India, that helped people identify, nurture, and live their passions. The company provided users with curated content, events, and connections related to their passions-from painting and music to travel and food. Passion Connect aimed to raise a Series A round of venture capital financing by the end of 2017. The co-founders had to find an effective monetization strategy before approaching potential investors. They had to consider both qualitative and quantitative outcomes for each strategy, the fit with the business's goals, and the impact on profitability, feasibility, and user experience.
Swot Analysis of "Passion Connect: Turning Passion into Profit" written by Dominic Lim, Monique Tuin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Passion Connect facing as an external strategic factors. Some of the topics covered in Passion Connect: Turning Passion into Profit case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Passion Connect: Turning Passion into Profit casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, technology disruption,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Passion Connect: Turning Passion into Profit
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Passion Connect: Turning Passion into Profit case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Passion Connect, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Passion Connect 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 Passion Connect: Turning Passion into Profit can be done for the following purposes –
1. Strategic planning using facts provided in Passion Connect: Turning Passion into Profit case study
2. Improving business portfolio management of Passion Connect
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 Passion Connect
Strengths Passion Connect: Turning Passion into Profit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Passion Connect in Passion Connect: Turning Passion into Profit Harvard Business Review case study are -
Effective Research and Development (R&D)
– Passion Connect 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 Passion Connect: Turning Passion into Profit - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Innovation & Entrepreneurship field
– Passion Connect 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 Passion Connect in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Passion Connect has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Passion Connect to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Passion Connect 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 Dominic Lim, Monique Tuin 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.
Highly skilled collaborators
– Passion Connect 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 Passion Connect: Turning Passion into Profit HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Passion Connect is one of the leading recruiters in the industry. Managers in the Passion Connect: Turning Passion into Profit are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Passion Connect in the sector have low bargaining power. Passion Connect: Turning Passion into Profit has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Passion Connect to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Passion Connect is present in almost all the verticals within the industry. This has provided firm in Passion Connect: Turning Passion into Profit 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
– Passion Connect: Turning Passion into Profit firm has clearly differentiated products in the market place. This has enabled Passion Connect to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Passion Connect to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Passion Connect in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Passion Connect
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Passion Connect does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Passion Connect has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Passion Connect 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.
Weaknesses Passion Connect: Turning Passion into Profit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Passion Connect: Turning Passion into Profit are -
High bargaining power of channel partners
– Because of the regulatory requirements, Dominic Lim, Monique Tuin suggests that, Passion Connect 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Passion Connect: Turning Passion into Profit, in the dynamic environment Passion Connect has struggled to respond to the nimble upstart competition. Passion Connect has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Passion Connect 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. Passion Connect 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.
Need for greater diversity
– Passion Connect 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.
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 Passion Connect supply chain. Even after few cautionary changes mentioned in the HBR case study - Passion Connect: Turning Passion into Profit, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Passion Connect vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Passion Connect 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Passion Connect: Turning Passion into Profit 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 Passion Connect 's lucrative customers.
Interest costs
– Compare to the competition, Passion Connect 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.
Products dominated business model
– Even though Passion Connect 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 - Passion Connect: Turning Passion into Profit should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Passion Connect, firm in the HBR case study Passion Connect: Turning Passion into Profit needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Passion Connect 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 Passion Connect: Turning Passion into Profit | 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 Passion Connect: Turning Passion into Profit are -
Leveraging digital technologies
– Passion Connect 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Passion Connect can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Passion Connect 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.
Developing new processes and practices
– Passion Connect 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
– Passion Connect 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 Passion Connect: Turning Passion into Profit - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Passion Connect to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Passion Connect 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Passion Connect can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Passion Connect can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Passion Connect 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. Passion Connect 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Passion Connect 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 Passion Connect to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Passion Connect is facing challenges because of the dominance of functional experts in the organization. Passion Connect: Turning Passion into Profit 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Passion Connect in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Buying journey improvements
– Passion Connect can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Passion Connect: Turning Passion into Profit 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 Passion Connect: Turning Passion into Profit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Passion Connect: Turning Passion into Profit are -
Stagnating economy with rate increase
– Passion Connect 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.
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. Passion Connect needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Passion Connect 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.
Consumer confidence and its impact on Passion Connect 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.
Increasing wage structure of Passion Connect
– 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 Passion Connect.
Shortening product life cycle
– it is one of the major threat that Passion Connect is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Passion Connect: Turning Passion into Profit, Passion Connect 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 .
Regulatory challenges
– Passion Connect 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.
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 Passion Connect in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Passion Connect can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Passion Connect 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 Passion Connect: Turning Passion into Profit .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Passion Connect with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Passion Connect business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Passion Connect: Turning Passion into Profit 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 Passion Connect: Turning Passion into Profit 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 Passion Connect: Turning Passion into Profit 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 Passion Connect: Turning Passion into Profit 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 Passion Connect: Turning Passion into Profit 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 Passion Connect needs to make to build a sustainable competitive advantage.
