Applied Mobile Labs: Valuation of a Start-Up SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Applied Mobile Labs: Valuation of a Start-Up
An angel investor had invested seed capital in a start-up company that aggregated and sold value-added services for mobile telecommunications in India. The company had done well since its inception in 2009, but the revenue growth figures reported for 2014 were concerning. According to the performance report, the start-up had grown 12 per cent in 2014-less than half of the estimated industry revenue growth figure for mobile value-added services. The investor wondered if his investment was profitable despite the negative cash flows and significant lifetime company losses incurred during the first three years of operation. Should the investor stay invested with, or divest from, the start-up? What would the company's exit value be? Jaslene Kaur Bawa is affiliated with Indian Institute of Management Raipur. Vinay Goyal is affiliated with Indian Institute of Management Raipur. S. K. Mitra is affiliated with Indian Institute of Management Raipur.
Swot Analysis of "Applied Mobile Labs: Valuation of a Start-Up" written by Jaslene Kaur Bawa, Vinay Goyal, S.K. Mitra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Raipur Start facing as an external strategic factors. Some of the topics covered in Applied Mobile Labs: Valuation of a Start-Up case study are - Strategic Management Strategies, Financial management, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Applied Mobile Labs: Valuation of a Start-Up casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , wage bills are increasing,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Applied Mobile Labs: Valuation of a Start-Up
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Applied Mobile Labs: Valuation of a Start-Up case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Raipur Start, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Raipur Start 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 Applied Mobile Labs: Valuation of a Start-Up can be done for the following purposes –
1. Strategic planning using facts provided in Applied Mobile Labs: Valuation of a Start-Up case study
2. Improving business portfolio management of Raipur Start
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 Raipur Start
Strengths Applied Mobile Labs: Valuation of a Start-Up | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Raipur Start in Applied Mobile Labs: Valuation of a Start-Up Harvard Business Review case study are -
Training and development
– Raipur Start has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Applied Mobile Labs: Valuation of a 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.
High switching costs
– The high switching costs that Raipur Start 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Applied Mobile Labs: Valuation of a Start-Up firm has clearly differentiated products in the market place. This has enabled Raipur Start to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Raipur Start to invest into research and development (R&D) and innovation.
Organizational Resilience of Raipur Start
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Raipur Start does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Raipur Start 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 Applied Mobile Labs: Valuation of a 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.
Innovation driven organization
– Raipur Start is one of the most innovative firm in sector. Manager in Applied Mobile Labs: Valuation of a Start-Up Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Raipur Start 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.
Operational resilience
– The operational resilience strategy in the Applied Mobile Labs: Valuation of a 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.
Ability to lead change in Finance & Accounting field
– Raipur Start 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 Raipur Start in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Raipur Start has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Raipur Start to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Raipur Start in the sector have low bargaining power. Applied Mobile Labs: Valuation of a Start-Up has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Raipur Start to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Raipur Start is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Applied Mobile Labs: Valuation of a Start-Up | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Applied Mobile Labs: Valuation of a Start-Up are -
Need for greater diversity
– Raipur Start has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Jaslene Kaur Bawa, Vinay Goyal, S.K. Mitra suggests that, Raipur Start 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.
Products dominated business model
– Even though Raipur Start 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 - Applied Mobile Labs: Valuation of a 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, Raipur Start 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. Raipur Start 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Applied Mobile Labs: Valuation of a Start-Up, it seems that the employees of Raipur Start 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.
Aligning sales with marketing
– It come across in the case study Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a Start-Up can leverage the sales team experience to cultivate customer relationships as Raipur Start is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Raipur Start, firm in the HBR case study Applied Mobile Labs: Valuation of a Start-Up needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Applied Mobile Labs: Valuation of a Start-Up, is just above the industry average. Raipur Start 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.
Increasing silos among functional specialists
– The organizational structure of Raipur Start is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Raipur Start needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Raipur Start to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Applied Mobile Labs: Valuation of a Start-Up, in the dynamic environment Raipur Start has struggled to respond to the nimble upstart competition. Raipur Start has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Raipur Start products
– To increase the profitability and margins on the products, Raipur Start needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a Start-Up are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Raipur Start can use these opportunities to build new business models that can help the communities that Raipur Start operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Using analytics as competitive advantage
– Raipur Start 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 Applied Mobile Labs: Valuation of a Start-Up - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Raipur Start to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Raipur Start can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Applied Mobile Labs: Valuation of a 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Raipur Start 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Raipur Start is facing challenges because of the dominance of functional experts in the organization. Applied Mobile Labs: Valuation of a 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Raipur Start 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, Applied Mobile Labs: Valuation of a 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.
Loyalty marketing
– Raipur Start 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Raipur Start can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Raipur Start 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.
Building a culture of innovation
– managers at Raipur Start 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.
Learning at scale
– Online learning technologies has now opened space for Raipur Start 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Raipur Start 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 Raipur Start to hire the very best people irrespective of their geographical location.
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. Raipur Start 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. Raipur Start 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 Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a Start-Up are -
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. Raipur Start can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Raipur Start 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.
High dependence on third party suppliers
– Raipur Start 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Applied Mobile Labs: Valuation of a Start-Up, Raipur Start 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 .
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 Raipur Start.
Consumer confidence and its impact on Raipur Start 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
– Raipur Start has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Raipur Start 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Raipur Start 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 Applied Mobile Labs: Valuation of a Start-Up .
Stagnating economy with rate increase
– Raipur Start 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.
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. Raipur Start 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.
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. Raipur Start needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Raipur Start business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Raipur Start with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a 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 Applied Mobile Labs: Valuation of a 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 Raipur Start needs to make to build a sustainable competitive advantage.