Nuru Energy (A): Financing a Social Enterprise SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nuru Energy (A): Financing a Social Enterprise
Case A describes the creation and growth of Nuru Energy. Starting from nothing, the founder 'bootstraps' a social venture with the goal of providing affordable and effective lighting solutions for 800 million people without access to the electricity grid in sub-Saharan Africa and India. The case narrates the challenges involved in developing a social enterprise with a dual aim of turning a profit and making a social impact. It focuses in particular on the finanical challenge and provides a context to discuss difference financing options and their implications. It looks at the different business model alternatives - market-based and donor-based. The central theme is to assess the merits and drawbacks of the different funding alternatives. Case B is an update that explains what financing option the founder chose and its implications. It sets the stage for a discussion about trade-offs in the geographical expansion of social ventures.
Swot Analysis of "Nuru Energy (A): Financing a Social Enterprise" written by Anne-Marie Carrick, Filipe Santos includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nuru Social facing as an external strategic factors. Some of the topics covered in Nuru Energy (A): Financing a Social Enterprise case study are - Strategic Management Strategies, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Nuru Energy (A): Financing a Social Enterprise casestudy better are - – challanges to central banks by blockchain based private currencies, increasing energy prices, there is backlash against globalization, geopolitical disruptions, technology disruption, there is increasing trade war between United States & China, wage bills are increasing,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Nuru Energy (A): Financing a Social Enterprise
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nuru Energy (A): Financing a Social Enterprise case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nuru Social, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nuru Social 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 Nuru Energy (A): Financing a Social Enterprise can be done for the following purposes –
1. Strategic planning using facts provided in Nuru Energy (A): Financing a Social Enterprise case study
2. Improving business portfolio management of Nuru Social
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nuru Social
Strengths Nuru Energy (A): Financing a Social Enterprise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nuru Social in Nuru Energy (A): Financing a Social Enterprise Harvard Business Review case study are -
Effective Research and Development (R&D)
– Nuru Social 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 Nuru Energy (A): Financing a Social Enterprise - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Nuru Social has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nuru Social 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Nuru Energy (A): Financing a Social Enterprise firm has clearly differentiated products in the market place. This has enabled Nuru Social to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Nuru Social to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Nuru Social is one of the leading recruiters in the industry. Managers in the Nuru Energy (A): Financing a Social Enterprise are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Nuru Social 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 Nuru Social 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.
Highly skilled collaborators
– Nuru Social has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nuru Energy (A): Financing a Social Enterprise HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Nuru Social in the sector have low bargaining power. Nuru Energy (A): Financing a Social Enterprise has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nuru Social to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Nuru Social has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nuru Energy (A): Financing a Social Enterprise 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.
Analytics focus
– Nuru Social 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 Anne-Marie Carrick, Filipe Santos 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.
Superior customer experience
– The customer experience strategy of Nuru Social in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Nuru Social
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nuru Social does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Nuru Energy (A): Financing a Social Enterprise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nuru Energy (A): Financing a Social Enterprise are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nuru Energy (A): Financing a Social Enterprise, it seems that the employees of Nuru Social 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.
Increasing silos among functional specialists
– The organizational structure of Nuru Social is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Nuru Social needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nuru Social to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Nuru Social, firm in the HBR case study Nuru Energy (A): Financing a Social Enterprise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Nuru Social 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.
Capital Spending Reduction
– Even during the low interest decade, Nuru Social 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.
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 Nuru Social supply chain. Even after few cautionary changes mentioned in the HBR case study - Nuru Energy (A): Financing a Social Enterprise, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nuru Social vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise can leverage the sales team experience to cultivate customer relationships as Nuru Social is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Nuru Energy (A): Financing a Social Enterprise HBR case study mentions - Nuru Social 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 star products
– The top 2 products and services of the firm as mentioned in the Nuru Energy (A): Financing a Social Enterprise 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 Nuru Social has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nuru Energy (A): Financing a Social Enterprise, is just above the industry average. Nuru Social 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.
Need for greater diversity
– Nuru Social 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 Nuru Energy (A): Financing a Social Enterprise | 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 Nuru Energy (A): Financing a Social Enterprise are -
Loyalty marketing
– Nuru Social 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.
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 Nuru Social in the consumer business. Now Nuru Social can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nuru Social 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.
Building a culture of innovation
– managers at Nuru Social 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 Innovation & Entrepreneurship segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nuru Social can use these opportunities to build new business models that can help the communities that Nuru Social operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Nuru Social 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Nuru Social can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nuru Social 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. Nuru Social 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nuru Social 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, Nuru Energy (A): Financing a Social Enterprise, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nuru Social is facing challenges because of the dominance of functional experts in the organization. Nuru Energy (A): Financing a Social Enterprise 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.
Creating value in data economy
– The success of analytics program of Nuru Social has opened avenues for new revenue streams for the organization in the industry. This can help Nuru Social to build a more holistic ecosystem as suggested in the Nuru Energy (A): Financing a Social Enterprise case study. Nuru Social can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Nuru Social 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 Nuru Energy (A): Financing a Social Enterprise - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nuru Social to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Nuru Social can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nuru Energy (A): Financing a Social Enterprise are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nuru Social 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 Nuru Energy (A): Financing a Social Enterprise .
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. Nuru Social 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. Nuru Social needs to understand the core reasons impacting the Innovation & Entrepreneurship 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 Nuru Social 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nuru Social in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Stagnating economy with rate increase
– Nuru Social 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.
High dependence on third party suppliers
– Nuru Social 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.
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.
Increasing wage structure of Nuru Social
– 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 Nuru Social.
Technology acceleration in Forth Industrial Revolution
– Nuru Social has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Nuru Social needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Nuru Social is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Nuru Social.
Weighted SWOT Analysis of Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise 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 Nuru Energy (A): Financing a Social Enterprise 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 Nuru Social needs to make to build a sustainable competitive advantage.