American Solar, Inc.: An Innovative Solar Start Up SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of American Solar, Inc.: An Innovative Solar Start Up
American Solar was a small Virginia start up, providing firms with solar thermal energy though new roofing installations. The firm's owners, John Archibald and Kathryn McGeehan, wanted to sell their solar thermal roofing as cost effective systems, not dependent on tax credits to make them economical as was the case with solar photovoltaic electric (PV electric) generation. Kathryn and John competed for a small niche in an already niche market and were working to prove that their system could stand alone as an energy efficient, cost effective heating system. They were battling the high upfront cost of a solar roof and working to sell the long term energy efficiency that solar thermal roofs provided. Kathryn and John knew that a hotel chain-Hannover Inns-was going out asking for bids from roofing companies to replace their roofs. If they could land this contract, it would be their largest commercial contract to date. They wanted to prepare a quote for replacing the roofs along with a presentation, based on cost savings, that could help take their firm to a higher sales level.
Swot Analysis of "American Solar, Inc.: An Innovative Solar Start Up" written by Susan V. White, Karen Hallows includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Solar Kathryn facing as an external strategic factors. Some of the topics covered in American Solar, Inc.: An Innovative Solar Start Up case study are - Strategic Management Strategies, Entrepreneurial finance and Finance & Accounting.
Some of the macro environment factors that can be used to understand the American Solar, Inc.: An Innovative Solar Start Up casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of American Solar, Inc.: An Innovative Solar Start Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in American Solar, Inc.: An Innovative Solar Start Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Solar Kathryn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up can be done for the following purposes –
1. Strategic planning using facts provided in American Solar, Inc.: An Innovative Solar Start Up case study
2. Improving business portfolio management of Solar Kathryn
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 Solar Kathryn
Strengths American Solar, Inc.: An Innovative Solar Start Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Solar Kathryn in American Solar, Inc.: An Innovative Solar Start Up Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Solar Kathryn 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 Solar Kathryn in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Solar Kathryn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Solar Kathryn 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
– Solar Kathryn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Solar Kathryn 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.
Highly skilled collaborators
– Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Solar Kathryn 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 Solar Kathryn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in American Solar, Inc.: An Innovative Solar Start Up Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Solar Kathryn 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.
Strong track record of project management
– Solar Kathryn is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Solar Kathryn has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in American Solar, Inc.: An Innovative Solar Start Up 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.
Diverse revenue streams
– Solar Kathryn is present in almost all the verticals within the industry. This has provided firm in American Solar, Inc.: An Innovative Solar Start Up 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.
Cross disciplinary teams
– Horizontal connected teams at the Solar Kathryn are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Solar Kathryn 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 Susan V. White, Karen Hallows 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.
Sustainable margins compare to other players in Finance & Accounting industry
– American Solar, Inc.: An Innovative Solar Start Up firm has clearly differentiated products in the market place. This has enabled Solar Kathryn to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Solar Kathryn to invest into research and development (R&D) and innovation.
Weaknesses American Solar, Inc.: An Innovative Solar Start Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of American Solar, Inc.: An Innovative Solar Start Up are -
Interest costs
– Compare to the competition, Solar Kathryn 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the American Solar, Inc.: An Innovative Solar Start Up 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 Solar Kathryn has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Solar Kathryn 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, Susan V. White, Karen Hallows suggests that, Solar Kathryn 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.
Aligning sales with marketing
– It come across in the case study American Solar, Inc.: An Innovative Solar Start Up 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 American Solar, Inc.: An Innovative Solar Start Up can leverage the sales team experience to cultivate customer relationships as Solar Kathryn is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Solar Kathryn is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Solar Kathryn needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Solar Kathryn to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Solar Kathryn 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. Solar Kathryn 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.
Slow to strategic competitive environment developments
– As American Solar, Inc.: An Innovative Solar Start Up HBR case study mentions - Solar Kathryn 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.
Low market penetration in new markets
– Outside its home market of Solar Kathryn, firm in the HBR case study American Solar, Inc.: An Innovative Solar Start Up needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Solar Kathryn products
– To increase the profitability and margins on the products, Solar Kathryn needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study American Solar, Inc.: An Innovative Solar Start Up, is just above the industry average. Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up | 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 American Solar, Inc.: An Innovative Solar Start Up are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Solar Kathryn 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 Solar Kathryn has opened avenues for new revenue streams for the organization in the industry. This can help Solar Kathryn to build a more holistic ecosystem as suggested in the American Solar, Inc.: An Innovative Solar Start Up case study. Solar Kathryn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Solar Kathryn 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.
Better consumer reach
– The expansion of the 5G network will help Solar Kathryn to increase its market reach. Solar Kathryn 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Solar Kathryn can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Solar Kathryn 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 Solar Kathryn to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Solar Kathryn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Solar Kathryn 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.
Loyalty marketing
– Solar Kathryn 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. Solar Kathryn can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Solar Kathryn 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.
Developing new processes and practices
– Solar Kathryn can develop new processes and procedures in Finance & Accounting 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Solar Kathryn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats American Solar, Inc.: An Innovative Solar Start Up External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study American Solar, Inc.: An Innovative Solar Start Up are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up .
High dependence on third party suppliers
– Solar Kathryn 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.
Stagnating economy with rate increase
– Solar Kathryn 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.
Consumer confidence and its impact on Solar Kathryn demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Solar Kathryn business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Solar Kathryn has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Solar Kathryn 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.
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 American Solar, Inc.: An Innovative Solar Start Up, Solar Kathryn 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 .
Regulatory challenges
– Solar Kathryn 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Solar Kathryn in the Finance & Accounting industry. The Finance & Accounting 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.
Shortening product life cycle
– it is one of the major threat that Solar Kathryn is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Solar Kathryn 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.
Weighted SWOT Analysis of American Solar, Inc.: An Innovative Solar Start Up 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 American Solar, Inc.: An Innovative Solar Start Up 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 American Solar, Inc.: An Innovative Solar Start Up 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 American Solar, Inc.: An Innovative Solar Start Up 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 American Solar, Inc.: An Innovative Solar Start Up 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 Solar Kathryn needs to make to build a sustainable competitive advantage.