Off Grid Electric: Strategic Financing for Growth SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Off Grid Electric: Strategic Financing for Growth
The Off Grid Electric case focuses on the creation, growth, and financing of the company from 2011 through the middle of 2014. The three cofounders saw an opportunity to provide solar electricity to much of Africa through their solar-as-a-service solution, which they launched in Tanzania in 2012. The Off Grid Electric business model was very capital intensive, and the new venture had several risks from the perspective of investors: market, business model, human resources, technology, and exit. As such, CEO Xavier Helgesen needed to think strategically about how-and when-to raise money in order to grow the business. In addition, the executive team needed to be in agreement on the company's growth plan. Should Off Grid Electric focus on rapid growth? Should they emphasize generating cash? What would these choices imply for Off Grid Electric's financing needs? At the end of the case, Helgesen receives two term sheets for a potential Series D financing. One is from Zouk Capital, a financial investor, and another is from Solar City, a strategic investor who had previously invested in Off Grid Electric. Students are asked to evaluate the term sheets from Helgesen's perspective, as well as to analyze an investment in Off Grid Electric from the perspective of an investor.
Swot Analysis of "Off Grid Electric: Strategic Financing for Growth" written by Russell Siegelman, Emily McAteer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Grid Electric facing as an external strategic factors. Some of the topics covered in Off Grid Electric: Strategic Financing for Growth case study are - Strategic Management Strategies, Emerging markets, Financial analysis, Financial management, Growth strategy, Social enterprise, Technology and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Off Grid Electric: Strategic Financing for Growth casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, wage bills are increasing, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Off Grid Electric: Strategic Financing for Growth
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Off Grid Electric: Strategic Financing for Growth case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Grid Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Grid Electric 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 Off Grid Electric: Strategic Financing for Growth can be done for the following purposes –
1. Strategic planning using facts provided in Off Grid Electric: Strategic Financing for Growth case study
2. Improving business portfolio management of Grid Electric
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 Grid Electric
Strengths Off Grid Electric: Strategic Financing for Growth | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Grid Electric in Off Grid Electric: Strategic Financing for Growth Harvard Business Review case study are -
Organizational Resilience of Grid Electric
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Grid Electric does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Grid Electric 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 Off Grid Electric: Strategic Financing for Growth - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Grid Electric is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Grid Electric 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.
High brand equity
– Grid Electric has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Grid Electric to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Grid Electric is present in almost all the verticals within the industry. This has provided firm in Off Grid Electric: Strategic Financing for Growth 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
– Grid Electric is one of the leading recruiters in the industry. Managers in the Off Grid Electric: Strategic Financing for Growth are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Grid Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Grid Electric 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 Off Grid Electric: Strategic Financing for Growth 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Off Grid Electric: Strategic Financing for Growth firm has clearly differentiated products in the market place. This has enabled Grid Electric to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Grid Electric to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Grid Electric 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 Grid Electric in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Grid Electric 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 Grid Electric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Off Grid Electric: Strategic Financing for Growth Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Off Grid Electric: Strategic Financing for Growth | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Off Grid Electric: Strategic Financing for Growth are -
Low market penetration in new markets
– Outside its home market of Grid Electric, firm in the HBR case study Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth 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 Grid Electric has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Russell Siegelman, Emily McAteer suggests that, Grid Electric 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.
Slow decision making process
– As mentioned earlier in the report, Grid Electric 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. Grid Electric 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.
No frontier risks strategy
– After analyzing the HBR case study Off Grid Electric: Strategic Financing for Growth, 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.
Skills based hiring
– The stress on hiring functional specialists at Grid Electric 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, Grid Electric 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.
Slow to strategic competitive environment developments
– As Off Grid Electric: Strategic Financing for Growth HBR case study mentions - Grid Electric takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 Grid Electric supply chain. Even after few cautionary changes mentioned in the HBR case study - Off Grid Electric: Strategic Financing for Growth, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Grid Electric vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth can leverage the sales team experience to cultivate customer relationships as Grid Electric is planning to shift buying processes online.
Need for greater diversity
– Grid Electric 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.
Opportunities Off Grid Electric: Strategic Financing for Growth | 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 Off Grid Electric: Strategic Financing for Growth are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Grid Electric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Grid Electric 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, Off Grid Electric: Strategic Financing for Growth, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Grid Electric 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. Grid Electric can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Grid Electric 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Grid Electric 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.
Leveraging digital technologies
– Grid Electric 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.
Better consumer reach
– The expansion of the 5G network will help Grid Electric to increase its market reach. Grid Electric 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, Grid Electric can use these opportunities to build new business models that can help the communities that Grid Electric operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Grid Electric can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Off Grid Electric: Strategic Financing for Growth 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.
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 Grid Electric 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.
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. Grid Electric can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Grid Electric in the consumer business. Now Grid Electric can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Off Grid Electric: Strategic Financing for Growth External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Off Grid Electric: Strategic Financing for Growth are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Grid Electric 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.
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. Grid Electric 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.
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. Grid Electric can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Grid Electric 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 Off Grid Electric: Strategic Financing for Growth .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Off Grid Electric: Strategic Financing for Growth, Grid Electric 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 .
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 Grid Electric business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Grid Electric
– 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 Grid Electric.
Technology acceleration in Forth Industrial Revolution
– Grid Electric has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Grid Electric 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.
Stagnating economy with rate increase
– Grid Electric 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Grid Electric 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Grid Electric with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Grid Electric needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth 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 Off Grid Electric: Strategic Financing for Growth 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 Grid Electric needs to make to build a sustainable competitive advantage.