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 - – cloud computing is disrupting traditional business models, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, 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 -
Effective Research and Development (R&D)
– Solar Kathryn 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 American Solar, Inc.: An Innovative Solar Start Up - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Solar Kathryn in the sector have low bargaining power. American Solar, Inc.: An Innovative Solar Start Up has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Solar Kathryn to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Solar Kathryn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Solar Kathryn 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.
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.
Operational resilience
– The operational resilience strategy in the American Solar, Inc.: An Innovative Solar Start Up 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 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.
Innovation driven organization
– Solar Kathryn is one of the most innovative firm in sector. Manager in American Solar, Inc.: An Innovative Solar Start Up Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Ability to recruit top talent
– Solar Kathryn is one of the leading recruiters in the industry. Managers in the American Solar, Inc.: An Innovative Solar Start Up are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses 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 -
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.
Capital Spending Reduction
– Even during the low interest decade, Solar Kathryn 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 cash cycle compare to competitors
Solar Kathryn 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.
No frontier risks strategy
– After analyzing the HBR case study American Solar, Inc.: An Innovative Solar Start Up, 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.
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 Solar Kathryn supply chain. Even after few cautionary changes mentioned in the HBR case study - American Solar, Inc.: An Innovative Solar Start Up, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Solar Kathryn vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study American Solar, Inc.: An Innovative Solar Start Up, in the dynamic environment Solar Kathryn has struggled to respond to the nimble upstart competition. Solar Kathryn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Solar Kathryn 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.
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.
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.
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 -
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.
Building a culture of innovation
– managers at Solar Kathryn 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Solar Kathryn is facing challenges because of the dominance of functional experts in the organization. American Solar, Inc.: An Innovative Solar Start Up 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.
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.
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.
Buying journey improvements
– Solar Kathryn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. American Solar, Inc.: An Innovative Solar Start Up 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Solar Kathryn can use these opportunities to build new business models that can help the communities that Solar Kathryn operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Solar Kathryn 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, American Solar, Inc.: An Innovative Solar Start Up, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Solar Kathryn 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. Solar Kathryn 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 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 -
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 Solar Kathryn.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Solar Kathryn with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 .
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. Solar Kathryn needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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.
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.