Finding Its Niche: Community Development Venture Capital SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Finding Its Niche: Community Development Venture Capital
Underserved urban and rural areas have found venture capital support via U.S. Community Development Venture Capital institutions, which numbered 68 and managed $870 million as of 2008. Suitable for MBA, undergraduate, and executive learners studying venture capital, urban development, and private equity, this stand-alone backgrounder is also an excellent companion to cases about specific venture capital organizations. CDVCs face challenges unique in the field of private equity, including where they operate and how much lower their rates of return and compensation are.
Swot Analysis of "Finding Its Niche: Community Development Venture Capital" written by Gregory Fairchild, Wilson Brissett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Venture Capital facing as an external strategic factors. Some of the topics covered in Finding Its Niche: Community Development Venture Capital case study are - Strategic Management Strategies, Financial management, Public relations, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Finding Its Niche: Community Development Venture Capital casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, supply chains are disrupted by pandemic , increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, technology disruption, etc
Introduction to SWOT Analysis of Finding Its Niche: Community Development Venture Capital
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Finding Its Niche: Community Development Venture Capital case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Venture Capital, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Venture Capital 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 Finding Its Niche: Community Development Venture Capital can be done for the following purposes –
1. Strategic planning using facts provided in Finding Its Niche: Community Development Venture Capital case study
2. Improving business portfolio management of Venture Capital
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Venture Capital
Strengths Finding Its Niche: Community Development Venture Capital | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Venture Capital in Finding Its Niche: Community Development Venture Capital Harvard Business Review case study are -
Effective Research and Development (R&D)
– Venture Capital 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 Finding Its Niche: Community Development Venture Capital - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Venture Capital digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Venture Capital 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 Venture Capital in the sector have low bargaining power. Finding Its Niche: Community Development Venture Capital has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Venture Capital to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Venture Capital is one of the leading recruiters in the industry. Managers in the Finding Its Niche: Community Development Venture Capital are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Venture Capital is one of the most innovative firm in sector. Manager in Finding Its Niche: Community Development Venture Capital Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Finding Its Niche: Community Development Venture Capital 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.
Highly skilled collaborators
– Venture Capital 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 Finding Its Niche: Community Development Venture Capital HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Venture Capital 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.
Organizational Resilience of Venture Capital
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Venture Capital does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Venture Capital has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Finding Its Niche: Community Development Venture Capital 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.
Superior customer experience
– The customer experience strategy of Venture Capital in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Venture Capital has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Venture Capital to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Finding Its Niche: Community Development Venture Capital | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Finding Its Niche: Community Development Venture Capital are -
Products dominated business model
– Even though Venture Capital 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 - Finding Its Niche: Community Development Venture Capital should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Finding Its Niche: Community Development Venture Capital 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 Venture Capital 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Finding Its Niche: Community Development Venture Capital 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 Venture Capital has relatively successful track record of launching new products.
Lack of clear differentiation of Venture Capital products
– To increase the profitability and margins on the products, Venture Capital needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Venture Capital is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Venture Capital needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Venture Capital to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Venture Capital 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregory Fairchild, Wilson Brissett suggests that, Venture Capital 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.
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 Venture Capital supply chain. Even after few cautionary changes mentioned in the HBR case study - Finding Its Niche: Community Development Venture Capital, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Venture Capital vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Venture Capital 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 Finding Its Niche: Community Development Venture Capital, in the dynamic environment Venture Capital has struggled to respond to the nimble upstart competition. Venture Capital has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Finding Its Niche: Community Development Venture Capital, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Opportunities Finding Its Niche: Community Development Venture Capital | 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 Finding Its Niche: Community Development Venture Capital are -
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. Venture Capital can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Venture Capital can use these opportunities to build new business models that can help the communities that Venture Capital operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Manufacturing automation
– Venture Capital can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Better consumer reach
– The expansion of the 5G network will help Venture Capital to increase its market reach. Venture Capital 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.
Building a culture of innovation
– managers at Venture Capital 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 Finance & Accounting segment.
Buying journey improvements
– Venture Capital can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Finding Its Niche: Community Development Venture Capital 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Venture Capital in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Venture Capital 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 Venture Capital to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Venture Capital 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 Finding Its Niche: Community Development Venture Capital - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Venture Capital to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Venture Capital has opened avenues for new revenue streams for the organization in the industry. This can help Venture Capital to build a more holistic ecosystem as suggested in the Finding Its Niche: Community Development Venture Capital case study. Venture Capital can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Venture Capital 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, Finding Its Niche: Community Development Venture Capital, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Venture Capital 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Venture Capital 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. Venture Capital 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.
Threats Finding Its Niche: Community Development Venture Capital External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Finding Its Niche: Community Development Venture Capital are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Venture Capital 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 Finding Its Niche: Community Development Venture Capital .
Consumer confidence and its impact on Venture Capital 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.
Technology acceleration in Forth Industrial Revolution
– Venture Capital has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Venture Capital needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Venture Capital business can come under increasing regulations regarding data privacy, data security, etc.
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 Venture Capital in the Finance & Accounting sector and impact the bottomline of the organization.
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 Venture Capital.
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. Venture Capital needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Venture Capital 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.
Stagnating economy with rate increase
– Venture Capital 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.
Regulatory challenges
– Venture Capital needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Finding Its Niche: Community Development Venture Capital, Venture Capital may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Venture Capital
– 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 Venture Capital.
Weighted SWOT Analysis of Finding Its Niche: Community Development Venture Capital 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 Finding Its Niche: Community Development Venture Capital 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 Finding Its Niche: Community Development Venture Capital 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 Finding Its Niche: Community Development Venture Capital 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 Finding Its Niche: Community Development Venture Capital 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 Venture Capital needs to make to build a sustainable competitive advantage.
