Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business
Optima Environment S.A., a biotech startup in Switzerland, has developed a environmentally safe alternative to chemicals used in the water treatment industry using a plant based extract. Subsequent research has led to discoveries of proteins with medicinal properties and an oil extract with several cosmetics applications. With limited resources and promising opportunities in multiple industries, the company must attempt to break into markets where it has no prior experience and generate a revenue stream to keep it afloat through the complex sales cycle in introducing (potentially) disruptive technologies in existing industries. The case study discusses elements of entrepreneurship, business strategy, and new product development within mature industries as well as the importance of developing strategic alliances to enter new markets.
Swot Analysis of "Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business" written by Jean-Philippe Deschamps, Benoit Leleux, Atul Pahwa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Optima Extract facing as an external strategic factors. Some of the topics covered in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business case study are - Strategic Management Strategies, Entrepreneurship and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, geopolitical disruptions, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing commodity prices,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Optima Extract, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Optima Extract 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business can be done for the following purposes –
1. Strategic planning using facts provided in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business case study
2. Improving business portfolio management of Optima Extract
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 Optima Extract
Strengths Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Optima Extract in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business Harvard Business Review case study are -
Successful track record of launching new products
– Optima Extract has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Optima Extract 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
– Optima Extract has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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.
Organizational Resilience of Optima Extract
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Optima Extract does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Optima Extract 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 Optima Extract is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Optima Extract is one of the leading recruiters in the industry. Managers in the Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business firm has clearly differentiated products in the market place. This has enabled Optima Extract to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Optima Extract to invest into research and development (R&D) and innovation.
Strong track record of project management
– Optima Extract is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Optima Extract 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.
Cross disciplinary teams
– Horizontal connected teams at the Optima Extract 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.
Highly skilled collaborators
– Optima Extract 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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
– Optima Extract 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 Optima Extract in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Optima Extract is present in almost all the verticals within the industry. This has provided firm in Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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.
Weaknesses Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Extract supply chain. Even after few cautionary changes mentioned in the HBR case study - Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Optima Extract vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Optima Extract has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Optima Extract 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. Optima Extract 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.
Low market penetration in new markets
– Outside its home market of Optima Extract, firm in the HBR case study Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Optima Extract 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 - Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Optima Extract 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Extract has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business, it seems that the employees of Optima Extract 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business, in the dynamic environment Optima Extract has struggled to respond to the nimble upstart competition. Optima Extract has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Optima Extract is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Optima Extract needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Optima Extract to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Extract 's lucrative customers.
Opportunities Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business | 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Optima Extract 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Optima Extract 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.
Manufacturing automation
– Optima Extract 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.
Loyalty marketing
– Optima Extract 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.
Buying journey improvements
– Optima Extract can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Optima Extract 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 Optima Extract to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Optima Extract has opened avenues for new revenue streams for the organization in the industry. This can help Optima Extract to build a more holistic ecosystem as suggested in the Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business case study. Optima Extract can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Optima Extract 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.
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 Optima Extract in the consumer business. Now Optima Extract can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Optima Extract 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, Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Optima Extract 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.
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. Optima Extract 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. Optima Extract 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.
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. Optima Extract can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business are -
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 Optima Extract business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Optima Extract is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Optima Extract 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
– Optima Extract 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.
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 wage structure of Optima Extract
– 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 Optima Extract.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Optima Extract with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Optima Extract in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Optima Extract 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.
Technology acceleration in Forth Industrial Revolution
– Optima Extract has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Optima Extract 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.
Stagnating economy with rate increase
– Optima Extract 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.
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 Optima Extract.
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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Environment S.A.: Turning a Wonder Tree Into an Eco-Business 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 Optima Extract needs to make to build a sustainable competitive advantage.
