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 inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, there is backlash against globalization,
increasing energy prices, central banks are concerned over increasing inflation, 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 -
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.
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Raipur Start digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Raipur Start 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.
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.
Learning organization
- Raipur Start 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 Raipur Start is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Applied Mobile Labs: Valuation of a Start-Up Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Diverse revenue streams
– Raipur Start is present in almost all the verticals within the industry. This has provided firm in Applied Mobile Labs: Valuation of a 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.
Ability to recruit top talent
– Raipur Start is one of the leading recruiters in the industry. Managers in the Applied Mobile Labs: Valuation of a 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.
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.
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.
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 -
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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Applied Mobile Labs: Valuation of a 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 Raipur Start has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Raipur Start 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.
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.
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.
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.
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 Raipur Start supply chain. Even after few cautionary changes mentioned in the HBR case study - Applied Mobile Labs: Valuation of a 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 Raipur Start 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 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.
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 -
Leveraging digital technologies
– Raipur Start 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.
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.
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.
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 Raipur Start in the consumer business. Now Raipur Start can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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. Raipur Start can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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. Raipur Start can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Developing new processes and practices
– Raipur Start 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.
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.
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 -
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.
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.
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.
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.
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.
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.
Environmental challenges
– Raipur Start 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. Raipur Start can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Raipur Start in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Raipur Start
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Raipur Start.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Raipur Start 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 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.