Case Study Description of Incept LLC and Confluent Surgical (A)
To maximize their effectiveness, color cases should be printed in color.A venture capitalist must decide whether to invest in a medical technology company that licenses intellectual property from a privately held IP holding company based on a platform technology. Entrepreneurs Amar Sawhney and Fred Khosravi founded Incept LLC to commercialize their multi-use hydrogel technology. The pair then spun off Confluent Surgical to develop some, but not all, of Incept's IP. The specifics of which IP Confluent would develop were described by a licensing agreement between Incept and Confluent. Venture capitalist Charles Warden of Schroder Ventures Life Sciences was deciding whether to invest in a Series A financing round in Confluent. Initially very excited about the deal, Warden becomes concerned about Confluent's valuation and its ability to succeed as a business when he learns about restrictions placed upon Confluent by the licensing agreement. The case describes Incept's business model and its approach to managing risk in early stage ventures. The case also addresses issues such as diversification and options preservation as well as the importance of trust and long-term relationships in decision-making in entrepreneurial arenas.
Authors :: Bhaskar Chakravorti, Toby Stuart, James Weber
Swot Analysis of "Incept LLC and Confluent Surgical (A)" written by Bhaskar Chakravorti, Toby Stuart, James Weber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Confluent Incept facing as an external strategic factors. Some of the topics covered in Incept LLC and Confluent Surgical (A) case study are - Strategic Management Strategies, Entrepreneurship, Intellectual property, IT, Joint ventures, Leadership, Negotiations and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Incept LLC and Confluent Surgical (A) casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, geopolitical disruptions, increasing household debt because of falling income levels, there is backlash against globalization, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Incept LLC and Confluent Surgical (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Incept LLC and Confluent Surgical (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Confluent Incept, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Confluent Incept 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 Incept LLC and Confluent Surgical (A) can be done for the following purposes –
1. Strategic planning using facts provided in Incept LLC and Confluent Surgical (A) case study
2. Improving business portfolio management of Confluent Incept
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 Confluent Incept
Strengths Incept LLC and Confluent Surgical (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Confluent Incept in Incept LLC and Confluent Surgical (A) Harvard Business Review case study are -
Organizational Resilience of Confluent Incept
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Confluent Incept does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Confluent Incept is present in almost all the verticals within the industry. This has provided firm in Incept LLC and Confluent Surgical (A) 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Confluent Incept digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Confluent Incept 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.
Ability to lead change in Innovation & Entrepreneurship field
– Confluent Incept 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 Confluent Incept in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Incept LLC and Confluent Surgical (A) firm has clearly differentiated products in the market place. This has enabled Confluent Incept to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Confluent Incept to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Confluent Incept 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 Incept LLC and Confluent Surgical (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Confluent Incept in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Confluent Incept in the sector have low bargaining power. Incept LLC and Confluent Surgical (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Confluent Incept to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Confluent Incept 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 Incept LLC and Confluent Surgical (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Confluent Incept 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 Bhaskar Chakravorti, Toby Stuart, James Weber 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.
Training and development
– Confluent Incept has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Incept LLC and Confluent Surgical (A) 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.
Successful track record of launching new products
– Confluent Incept has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Confluent Incept 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.
Weaknesses Incept LLC and Confluent Surgical (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Incept LLC and Confluent Surgical (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Incept LLC and Confluent Surgical (A), is just above the industry average. Confluent Incept 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
– Confluent Incept 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.
Skills based hiring
– The stress on hiring functional specialists at Confluent Incept 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Incept LLC and Confluent Surgical (A) 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 Confluent Incept has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Confluent Incept is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Confluent Incept needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Confluent Incept to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Confluent Incept products
– To increase the profitability and margins on the products, Confluent Incept needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Incept LLC and Confluent Surgical (A), it seems that the employees of Confluent Incept 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.
Slow to strategic competitive environment developments
– As Incept LLC and Confluent Surgical (A) HBR case study mentions - Confluent Incept 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 bargaining power of channel partners
– Because of the regulatory requirements, Bhaskar Chakravorti, Toby Stuart, James Weber suggests that, Confluent Incept 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Confluent Incept needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Confluent Incept 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 Incept LLC and Confluent Surgical (A) | 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 Incept LLC and Confluent Surgical (A) are -
Building a culture of innovation
– managers at Confluent Incept 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.
Developing new processes and practices
– Confluent Incept can develop new processes and procedures in Innovation & Entrepreneurship 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Confluent Incept can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Confluent Incept 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 Confluent Incept 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 Confluent Incept to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Confluent Incept 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.
Better consumer reach
– The expansion of the 5G network will help Confluent Incept to increase its market reach. Confluent Incept 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.
Creating value in data economy
– The success of analytics program of Confluent Incept has opened avenues for new revenue streams for the organization in the industry. This can help Confluent Incept to build a more holistic ecosystem as suggested in the Incept LLC and Confluent Surgical (A) case study. Confluent Incept can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Confluent Incept 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.
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 Confluent Incept 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.
Buying journey improvements
– Confluent Incept can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Incept LLC and Confluent Surgical (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Confluent Incept in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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. Confluent Incept can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Incept LLC and Confluent Surgical (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Incept LLC and Confluent Surgical (A) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Incept LLC and Confluent Surgical (A), Confluent Incept may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Confluent Incept can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Confluent Incept with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Confluent Incept.
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.
Stagnating economy with rate increase
– Confluent Incept 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Confluent Incept 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 Incept LLC and Confluent Surgical (A) .
Shortening product life cycle
– it is one of the major threat that Confluent Incept is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Confluent Incept 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 Innovation & Entrepreneurship industry regulations.
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 Confluent Incept in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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. Confluent Incept needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Confluent Incept 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.
Weighted SWOT Analysis of Incept LLC and Confluent Surgical (A) 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 Incept LLC and Confluent Surgical (A) 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 Incept LLC and Confluent Surgical (A) 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 Incept LLC and Confluent Surgical (A) 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 Incept LLC and Confluent Surgical (A) 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 Confluent Incept needs to make to build a sustainable competitive advantage.