Case Study Description of Accel Partners' European Launch
In spring 2001, with the venture market crashing all around, the London office of Accel Partners, a major west coast venture capital firm, needs to make a decision about investing in an Irish software company. As the first investment of the new European operation, the decision will serve as a proof of concept for the process that the organization has set up. This case presents Accel's strategy in moving into Europe and staying there even as many other firms shuttered or reduced their overseas' operations. In addition, the protagonists must decide how to structure a term sheet and whether to include another venture firm in the deal.
Authors :: G. Felda Hardymon, Josh Lerner, Ann Leamon
Swot Analysis of "Accel Partners' European Launch" written by G. Felda Hardymon, Josh Lerner, Ann Leamon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Accel Accel's facing as an external strategic factors. Some of the topics covered in Accel Partners' European Launch case study are - Strategic Management Strategies, Decision making, Financial management, Growth strategy, International business, Joint ventures, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Accel Partners' European Launch casestudy better are - – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, geopolitical disruptions,
increasing transportation and logistics costs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Accel Partners' European Launch
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Accel Partners' European Launch case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Accel Accel's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Accel Accel's 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 Accel Partners' European Launch can be done for the following purposes –
1. Strategic planning using facts provided in Accel Partners' European Launch case study
2. Improving business portfolio management of Accel Accel's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Accel Accel's
Strengths Accel Partners' European Launch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Accel Accel's in Accel Partners' European Launch Harvard Business Review case study are -
Strong track record of project management
– Accel Accel's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Accel Accel's in the sector have low bargaining power. Accel Partners' European Launch has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Accel Accel's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Accel Accel's 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 Accel Partners' European Launch - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Accel Accel's 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 Accel Partners' European Launch HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Accel Accel's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Accel Accel's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Accel Accel's 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 Accel Accel's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Accel Partners' European Launch 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.
Cross disciplinary teams
– Horizontal connected teams at the Accel Accel's 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
– Accel Accel's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Accel Partners' European Launch 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Accel Accel's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Accel Accel's 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 recruit top talent
– Accel Accel's is one of the leading recruiters in the industry. Managers in the Accel Partners' European Launch are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Accel Accel's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Accel Accel's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Accel Partners' European Launch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Accel Partners' European Launch are -
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 Accel Accel's supply chain. Even after few cautionary changes mentioned in the HBR case study - Accel Partners' European Launch, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Accel Accel's vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Accel Partners' European Launch 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 Accel Partners' European Launch can leverage the sales team experience to cultivate customer relationships as Accel Accel's is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Accel Accel's 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.
Interest costs
– Compare to the competition, Accel Accel's 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Accel Partners' European Launch 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 Accel Accel's has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Accel Partners' European Launch HBR case study mentions - Accel Accel's 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.
Products dominated business model
– Even though Accel Accel's 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 - Accel Partners' European Launch should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Accel Partners' European Launch, in the dynamic environment Accel Accel's has struggled to respond to the nimble upstart competition. Accel Accel's 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 Accel Accel's, firm in the HBR case study Accel Partners' European Launch needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Accel Partners' European Launch, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Accel Partners' European Launch 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 Accel Accel's 's lucrative customers.
Opportunities Accel Partners' European Launch | 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 Accel Partners' European Launch are -
Creating value in data economy
– The success of analytics program of Accel Accel's has opened avenues for new revenue streams for the organization in the industry. This can help Accel Accel's to build a more holistic ecosystem as suggested in the Accel Partners' European Launch case study. Accel Accel's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Accel Accel's to increase its market reach. Accel Accel's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Accel Accel's is facing challenges because of the dominance of functional experts in the organization. Accel Partners' European Launch 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.
Loyalty marketing
– Accel Accel's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Accel Accel's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Accel Accel's 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, Accel Partners' European Launch, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Accel Accel's in the consumer business. Now Accel Accel's can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Accel Accel's can develop new processes and procedures in Finance & Accounting 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.
Using analytics as competitive advantage
– Accel Accel's 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 Accel Partners' European Launch - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Accel Accel's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Accel Accel's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Accel Accel's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Accel Partners' European Launch 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Accel Accel's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Accel Accel's 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 Accel Accel's to hire the very best people irrespective of their geographical location.
Threats Accel Partners' European Launch External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Accel Partners' European Launch are -
Technology acceleration in Forth Industrial Revolution
– Accel Accel's has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Accel Accel's needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Accel Accel's is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Accel Partners' European Launch, Accel Accel's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Accel Accel's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Accel Accel's.
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. Accel Accel's 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.
Stagnating economy with rate increase
– Accel Accel's 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.
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 Accel Accel's in the Finance & Accounting sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Accel Accel's 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 Accel Partners' European Launch .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Accel Accel's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Accel Accel's 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.
Environmental challenges
– Accel Accel's 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. Accel Accel's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Weighted SWOT Analysis of Accel Partners' European Launch 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 Accel Partners' European Launch 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 Accel Partners' European Launch 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 Accel Partners' European Launch 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 Accel Partners' European Launch 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 Accel Accel's needs to make to build a sustainable competitive advantage.
