New Life: Scaling Up Social Enterprise Start-Ups SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of New Life: Scaling Up Social Enterprise Start-Ups
New Life Psychiatric Rehabilitation Association has been pursuing its social enterprise initiative since 1994 to create employment and training opportunities for former mental patients in Hong Kong. As of mid-2008, 18 social enterprises have been launched, including a supply chain of organic foods with a farm, two restaurants and five retail shops. Despite success in its social mission, the social enterprises are only partially self-sustaining. The management also faces the challenges of increasing business complexities, keen market competition and more stringent government regulations on food safety. The ability of New Life to tackle these issues is constrained by the fact that the majority of its management staff come from social work or other non-business backgrounds. To scale up its business and to achieve self-sustainability, it is imperative for the organization to revisit its management and human resources strategies, and find ways to improve the financial performance of its social enterprises.
Swot Analysis of "New Life: Scaling Up Social Enterprise Start-Ups" written by Gilbert Wong, Saimond Ip, Penelope Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Social Enterprises facing as an external strategic factors. Some of the topics covered in New Life: Scaling Up Social Enterprise Start-Ups case study are - Strategic Management Strategies, Ethics, Growth strategy, Operations management, Social enterprise and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the New Life: Scaling Up Social Enterprise Start-Ups casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of New Life: Scaling Up Social Enterprise Start-Ups
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New Life: Scaling Up Social Enterprise Start-Ups case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Social Enterprises, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups can be done for the following purposes –
1. Strategic planning using facts provided in New Life: Scaling Up Social Enterprise Start-Ups case study
2. Improving business portfolio management of Social Enterprises
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 Social Enterprises
Strengths New Life: Scaling Up Social Enterprise Start-Ups | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Social Enterprises in New Life: Scaling Up Social Enterprise Start-Ups Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the New Life: Scaling Up Social Enterprise Start-Ups 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.
Successful track record of launching new products
– Social Enterprises has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Social Enterprises 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Social Enterprises digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Social Enterprises 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.
High brand equity
– Social Enterprises has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Social Enterprises to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Social Enterprises has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New Life: Scaling Up Social Enterprise Start-Ups 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.
Ability to lead change in Innovation & Entrepreneurship field
– Social Enterprises 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 Social Enterprises in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Social Enterprises has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Social Enterprises is present in almost all the verticals within the industry. This has provided firm in New Life: Scaling Up Social Enterprise Start-Ups 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
– Social Enterprises is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Social Enterprises is one of the most innovative firm in sector. Manager in New Life: Scaling Up Social Enterprise Start-Ups Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Social Enterprises
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Social Enterprises does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses New Life: Scaling Up Social Enterprise Start-Ups | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New Life: Scaling Up Social Enterprise Start-Ups are -
Interest costs
– Compare to the competition, Social Enterprises 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gilbert Wong, Saimond Ip, Penelope Chan suggests that, Social Enterprises 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study New Life: Scaling Up Social Enterprise Start-Ups, is just above the industry average. Social Enterprises 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.
Slow to strategic competitive environment developments
– As New Life: Scaling Up Social Enterprise Start-Ups HBR case study mentions - Social Enterprises 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 operating costs
– Compare to the competitors, firm in the HBR case study New Life: Scaling Up Social Enterprise Start-Ups 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 Social Enterprises 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study New Life: Scaling Up Social Enterprise Start-Ups, in the dynamic environment Social Enterprises has struggled to respond to the nimble upstart competition. Social Enterprises has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Social Enterprises, firm in the HBR case study New Life: Scaling Up Social Enterprise Start-Ups needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study New Life: Scaling Up Social Enterprise Start-Ups, it seems that the employees of Social Enterprises 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the New Life: Scaling Up Social Enterprise Start-Ups 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 Social Enterprises has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study New Life: Scaling Up Social Enterprise Start-Ups 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 New Life: Scaling Up Social Enterprise Start-Ups can leverage the sales team experience to cultivate customer relationships as Social Enterprises is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Social Enterprises is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study New Life: Scaling Up Social Enterprise Start-Ups can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities New Life: Scaling Up Social Enterprise Start-Ups | 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 New Life: Scaling Up Social Enterprise Start-Ups are -
Loyalty marketing
– Social Enterprises 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Social Enterprises can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Social Enterprises to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Social Enterprises is facing challenges because of the dominance of functional experts in the organization. New Life: Scaling Up Social Enterprise Start-Ups 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.
Developing new processes and practices
– Social Enterprises 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.
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. Social Enterprises 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. Social Enterprises 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Social Enterprises can use these opportunities to build new business models that can help the communities that Social Enterprises operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Social Enterprises can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. New Life: Scaling Up Social Enterprise Start-Ups 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.
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. Social Enterprises can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Social Enterprises 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Social Enterprises 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, New Life: Scaling Up Social Enterprise Start-Ups, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Social Enterprises 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.
Better consumer reach
– The expansion of the 5G network will help Social Enterprises to increase its market reach. Social Enterprises 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.
Threats New Life: Scaling Up Social Enterprise Start-Ups External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New Life: Scaling Up Social Enterprise Start-Ups are -
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 Social Enterprises.
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. Social Enterprises can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study New Life: Scaling Up Social Enterprise Start-Ups, Social Enterprises 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 .
Technology acceleration in Forth Industrial Revolution
– Social Enterprises has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Social Enterprises 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.
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. Social Enterprises 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.
Consumer confidence and its impact on Social Enterprises 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.
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. Social Enterprises needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups .
Stagnating economy with rate increase
– Social Enterprises 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 Social Enterprises with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Social Enterprises is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups 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 New Life: Scaling Up Social Enterprise Start-Ups 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 New Life: Scaling Up Social Enterprise Start-Ups 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 New Life: Scaling Up Social Enterprise Start-Ups 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 New Life: Scaling Up Social Enterprise Start-Ups 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 Social Enterprises needs to make to build a sustainable competitive advantage.
