Water Funds: Financing Nature's Ability to Protect Water Supplies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Water Funds: Financing Nature's Ability to Protect Water Supplies
Nature plays an important role in maintaining the flow and purity of water. Human activities often degrade the quality and/or quantity of water flowing to downstream users, but the maintenance of natural ecosystems and the sound conservation management by those living upstream in watersheds can help provide a clean, reliable supply of water for downstream water users. Water funds are a way for downstream water users to preserve their water supply, by paying to restore and conserve natural ecosystems. They also enable upstream and downstream communities to work together for mutual benefit, preserving or restoring nature's ability to improve water quality and reliable flow while providing economic opportunities for upstream communities. This case introduces the concept of ecosystem services (the role that natural ecosystems play in sustaining and fulfilling human life) and payment for ecosystem services (PES), in which stakeholders pay in order to preserve or restore the ability of nature to provide these services. It describes water funds and other PES arrangements, as well as some of the challenges that water funds face. Several examples are provided of water funds and other PES programs.
Authors :: Erica Plambeck, Gretchen Daily, David W. Hoyt
Swot Analysis of "Water Funds: Financing Nature's Ability to Protect Water Supplies" written by Erica Plambeck, Gretchen Daily, David W. Hoyt includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Water Pes facing as an external strategic factors. Some of the topics covered in Water Funds: Financing Nature's Ability to Protect Water Supplies case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Water Funds: Financing Nature's Ability to Protect Water Supplies casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing commodity prices,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Water Funds: Financing Nature's Ability to Protect Water Supplies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Water Funds: Financing Nature's Ability to Protect Water Supplies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Water Pes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Water Pes 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 Water Funds: Financing Nature's Ability to Protect Water Supplies can be done for the following purposes –
1. Strategic planning using facts provided in Water Funds: Financing Nature's Ability to Protect Water Supplies case study
2. Improving business portfolio management of Water Pes
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 Water Pes
Strengths Water Funds: Financing Nature's Ability to Protect Water Supplies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Water Pes in Water Funds: Financing Nature's Ability to Protect Water Supplies Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Water Pes in the sector have low bargaining power. Water Funds: Financing Nature's Ability to Protect Water Supplies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Water Pes to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Water Pes is one of the leading recruiters in the industry. Managers in the Water Funds: Financing Nature's Ability to Protect Water Supplies are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Water Pes 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 Erica Plambeck, Gretchen Daily, David W. Hoyt 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Water Funds: Financing Nature's Ability to Protect Water Supplies firm has clearly differentiated products in the market place. This has enabled Water Pes to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Water Pes to invest into research and development (R&D) and innovation.
Learning organization
- Water Pes 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 Water Pes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Water Funds: Financing Nature's Ability to Protect Water Supplies Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Water Pes is present in almost all the verticals within the industry. This has provided firm in Water Funds: Financing Nature's Ability to Protect Water Supplies 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.
Strong track record of project management
– Water Pes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Water Pes digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Water Pes 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 Water Pes 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.
Successful track record of launching new products
– Water Pes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Water Pes 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.
Training and development
– Water Pes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Water Funds: Financing Nature's Ability to Protect Water Supplies 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.
Innovation driven organization
– Water Pes is one of the most innovative firm in sector. Manager in Water Funds: Financing Nature's Ability to Protect Water Supplies Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Water Funds: Financing Nature's Ability to Protect Water Supplies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Water Funds: Financing Nature's Ability to Protect Water Supplies are -
High operating costs
– Compare to the competitors, firm in the HBR case study Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Pes 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Water Pes 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.
Lack of clear differentiation of Water Pes products
– To increase the profitability and margins on the products, Water Pes 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 Water Pes supply chain. Even after few cautionary changes mentioned in the HBR case study - Water Funds: Financing Nature's Ability to Protect Water Supplies, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Water Pes vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Water Pes has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Need for greater diversity
– Water Pes 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.
Slow to strategic competitive environment developments
– As Water Funds: Financing Nature's Ability to Protect Water Supplies HBR case study mentions - Water Pes 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Water Funds: Financing Nature's Ability to Protect Water Supplies, it seems that the employees of Water Pes 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Water Funds: Financing Nature's Ability to Protect Water Supplies, is just above the industry average. Water Pes 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.
Low market penetration in new markets
– Outside its home market of Water Pes, firm in the HBR case study Water Funds: Financing Nature's Ability to Protect Water Supplies needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Water Pes has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Water Funds: Financing Nature's Ability to Protect Water Supplies | 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 Water Funds: Financing Nature's Ability to Protect Water Supplies are -
Using analytics as competitive advantage
– Water Pes 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 Water Funds: Financing Nature's Ability to Protect Water Supplies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Water Pes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Water Pes 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. Water Pes 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.
Better consumer reach
– The expansion of the 5G network will help Water Pes to increase its market reach. Water Pes 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.
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 Water Pes in the consumer business. Now Water Pes can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Water Pes 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, Water Funds: Financing Nature's Ability to Protect Water Supplies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Water Pes 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Water Pes 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, Water Pes 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Water Pes 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 Water Pes to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Water Pes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Water Pes can use these opportunities to build new business models that can help the communities that Water Pes operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Water Pes 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
– Water Pes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Funds: Financing Nature's Ability to Protect Water Supplies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Water Funds: Financing Nature's Ability to Protect Water Supplies are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Water Pes 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 Water Funds: Financing Nature's Ability to Protect Water Supplies .
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. Water Pes needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Water Pes 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Water Pes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Consumer confidence and its impact on Water Pes 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.
Regulatory challenges
– Water Pes 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.
Increasing wage structure of Water Pes
– 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 Water Pes.
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 Water Pes in the Finance & Accounting sector and impact the bottomline of the organization.
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. Water Pes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Water Pes 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 Water Funds: Financing Nature's Ability to Protect Water Supplies, Water Pes 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 .
Environmental challenges
– Water Pes 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. Water Pes can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Weighted SWOT Analysis of Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Funds: Financing Nature's Ability to Protect Water Supplies 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 Water Pes needs to make to build a sustainable competitive advantage.
