Case Study Description of MuMate B-1: Confidential for Maxwell
MuMate, a fictional cult beverage company, requires capital to fund national expansion. Its cofounders, who have bootstrapped to this point, are now negotiating with venture capital firms to raise a $3 million funding round. The case describes MuMate's inception, early history, business model, and factors that have fueled its rapid recent growth. As the case ends, the cofounders are debating whether to raise funds from VCs, angels, or asset-based lenders. The cofounders share their concerns about valuation and whether investors will seek to change the company's strategy and organizational culture.
Swot Analysis of "MuMate B-1: Confidential for Maxwell" written by Thomas R. Eisenmann, Alex Godden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cofounders Mumate facing as an external strategic factors. Some of the topics covered in MuMate B-1: Confidential for Maxwell case study are - Strategic Management Strategies, Financial analysis, Growth strategy, Negotiations and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the MuMate B-1: Confidential for Maxwell casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing transportation and logistics costs,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of MuMate B-1: Confidential for Maxwell
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MuMate B-1: Confidential for Maxwell case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cofounders Mumate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cofounders Mumate 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 MuMate B-1: Confidential for Maxwell can be done for the following purposes –
1. Strategic planning using facts provided in MuMate B-1: Confidential for Maxwell case study
2. Improving business portfolio management of Cofounders Mumate
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 Cofounders Mumate
Strengths MuMate B-1: Confidential for Maxwell | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cofounders Mumate in MuMate B-1: Confidential for Maxwell Harvard Business Review case study are -
Highly skilled collaborators
– Cofounders Mumate 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 MuMate B-1: Confidential for Maxwell HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Innovation & Entrepreneurship field
– Cofounders Mumate 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 Cofounders Mumate in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Cofounders Mumate 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.
Training and development
– Cofounders Mumate has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MuMate B-1: Confidential for Maxwell 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.
Operational resilience
– The operational resilience strategy in the MuMate B-1: Confidential for Maxwell 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Cofounders Mumate digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cofounders Mumate 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.
Innovation driven organization
– Cofounders Mumate is one of the most innovative firm in sector. Manager in MuMate B-1: Confidential for Maxwell Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– MuMate B-1: Confidential for Maxwell firm has clearly differentiated products in the market place. This has enabled Cofounders Mumate to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Cofounders Mumate to invest into research and development (R&D) and innovation.
Strong track record of project management
– Cofounders Mumate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Cofounders Mumate 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 Cofounders Mumate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MuMate B-1: Confidential for Maxwell Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Cofounders Mumate 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 MuMate B-1: Confidential for Maxwell - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Cofounders Mumate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cofounders Mumate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses MuMate B-1: Confidential for Maxwell | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MuMate B-1: Confidential for Maxwell are -
Workers concerns about automation
– As automation is fast increasing in the segment, Cofounders Mumate 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.
Products dominated business model
– Even though Cofounders Mumate has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - MuMate B-1: Confidential for Maxwell should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Cofounders Mumate 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 MuMate B-1: Confidential for Maxwell HBR case study mentions - Cofounders Mumate 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MuMate B-1: Confidential for Maxwell, in the dynamic environment Cofounders Mumate has struggled to respond to the nimble upstart competition. Cofounders Mumate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Cofounders Mumate supply chain. Even after few cautionary changes mentioned in the HBR case study - MuMate B-1: Confidential for Maxwell, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cofounders Mumate vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MuMate B-1: Confidential for Maxwell 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 Cofounders Mumate has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cofounders Mumate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study MuMate B-1: Confidential for Maxwell can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Cofounders Mumate 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. Cofounders Mumate 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.
High operating costs
– Compare to the competitors, firm in the HBR case study MuMate B-1: Confidential for Maxwell 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 Cofounders Mumate 's lucrative customers.
Aligning sales with marketing
– It come across in the case study MuMate B-1: Confidential for Maxwell 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 MuMate B-1: Confidential for Maxwell can leverage the sales team experience to cultivate customer relationships as Cofounders Mumate is planning to shift buying processes online.
Opportunities MuMate B-1: Confidential for Maxwell | 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 MuMate B-1: Confidential for Maxwell are -
Buying journey improvements
– Cofounders Mumate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. MuMate B-1: Confidential for Maxwell 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.
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 Cofounders Mumate in the consumer business. Now Cofounders Mumate can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Cofounders Mumate can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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 Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Cofounders Mumate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cofounders Mumate is facing challenges because of the dominance of functional experts in the organization. MuMate B-1: Confidential for Maxwell 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.
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. Cofounders Mumate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cofounders Mumate 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 Cofounders Mumate to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Cofounders Mumate 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
– Cofounders Mumate 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.
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 Cofounders Mumate 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.
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. Cofounders Mumate 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. Cofounders Mumate 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cofounders Mumate 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cofounders Mumate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats MuMate B-1: Confidential for Maxwell External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MuMate B-1: Confidential for Maxwell are -
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. Cofounders Mumate needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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. Cofounders Mumate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Cofounders Mumate 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.
Stagnating economy with rate increase
– Cofounders Mumate 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cofounders Mumate with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cofounders Mumate 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 MuMate B-1: Confidential for Maxwell .
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 Cofounders Mumate in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Cofounders Mumate 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. Cofounders Mumate can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Cofounders Mumate business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study MuMate B-1: Confidential for Maxwell, Cofounders Mumate 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cofounders Mumate 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.
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.
Shortening product life cycle
– it is one of the major threat that Cofounders Mumate is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of MuMate B-1: Confidential for Maxwell 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 MuMate B-1: Confidential for Maxwell 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 MuMate B-1: Confidential for Maxwell 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 MuMate B-1: Confidential for Maxwell 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 MuMate B-1: Confidential for Maxwell 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 Cofounders Mumate needs to make to build a sustainable competitive advantage.