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 - – supply chains are disrupted by pandemic , technology disruption, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, 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 -
Superior customer experience
– The customer experience strategy of Social Enterprises in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Cross disciplinary teams
– Horizontal connected teams at the Social Enterprises 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.
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.
Low bargaining power of suppliers
– Suppliers of Social Enterprises in the sector have low bargaining power. New Life: Scaling Up Social Enterprise Start-Ups has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Social Enterprises to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Ability to recruit top talent
– Social Enterprises is one of the leading recruiters in the industry. Managers in the New Life: Scaling Up Social Enterprise Start-Ups are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Social Enterprises 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 New Life: Scaling Up Social Enterprise Start-Ups HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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 -
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.
Lack of clear differentiation of Social Enterprises products
– To increase the profitability and margins on the products, Social Enterprises needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Social Enterprises 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 - New Life: Scaling Up Social Enterprise Start-Ups should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study New Life: Scaling Up Social Enterprise Start-Ups, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space 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.
Capital Spending Reduction
– Even during the low interest decade, Social Enterprises 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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Social Enterprises is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Social Enterprises needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Social Enterprises to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Social Enterprises 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.
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.
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 -
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.
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.
Leveraging digital technologies
– Social Enterprises 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.
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.
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.
Creating value in data economy
– The success of analytics program of Social Enterprises has opened avenues for new revenue streams for the organization in the industry. This can help Social Enterprises to build a more holistic ecosystem as suggested in the New Life: Scaling Up Social Enterprise Start-Ups case study. Social Enterprises can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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. Social Enterprises can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 Social Enterprises 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Social Enterprises 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Social Enterprises 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 Social Enterprises to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects 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.
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 -
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 Social Enterprises in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
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.
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.
Regulatory challenges
– Social Enterprises 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
– 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.
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.
Environmental challenges
– Social Enterprises 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. Social Enterprises can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 .
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.
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 .
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.
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.