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 - – 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, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels,
technology disruption, challanges to central banks by blockchain based private currencies, 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 -
High brand equity
– Solar Kathryn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Solar Kathryn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study American Solar, Inc.: An Innovative Solar Start Up 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 Solar Kathryn 's lucrative customers.
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.
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.
Need for greater diversity
– Solar Kathryn 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study American Solar, Inc.: An Innovative Solar Start Up, it seems that the employees of Solar Kathryn don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
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.
Products dominated business model
– Even though Solar Kathryn 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 - American Solar, Inc.: An Innovative Solar Start Up should strive to include more intangible value offerings along with its core products and services.
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.
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 -
Leveraging digital technologies
– Solar Kathryn 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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Solar Kathryn in the consumer business. Now Solar Kathryn can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 Solar Kathryn in the Finance & Accounting sector and impact the bottomline 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 .
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.
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.
Environmental challenges
– Solar Kathryn needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Solar Kathryn can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Solar Kathryn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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 .
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.
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.
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.