Term Sheet Negotiations for Trendsetter, Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Term Sheet Negotiations for Trendsetter, Inc.
Describes two aspiring entrepreneurs who have just received offering documents for venture funding (known as term sheets) from two venture capital firms. Neither of the entrepreneurs have experience in raising capital and they are wondering how to compare the two proposals and which one to choose. They need to make a decision fast. The documents contain two complete term sheets which are similar in structure but different in important ways. Both term sheets have advantages and disadvantages for the entrepreneurs. Choosing one over the other requires a careful analysis as well as a certain set of assumptions about the growth of Trendsetter, Inc.
Swot Analysis of "Term Sheet Negotiations for Trendsetter, Inc." written by Walter Kuemmerle, William J. Coughlin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Trendsetter Sheets facing as an external strategic factors. Some of the topics covered in Term Sheet Negotiations for Trendsetter, Inc. case study are - Strategic Management Strategies, Decision making, Regulation, Technology, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Term Sheet Negotiations for Trendsetter, Inc. casestudy better are - – technology disruption, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Term Sheet Negotiations for Trendsetter, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Term Sheet Negotiations for Trendsetter, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Trendsetter Sheets, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Trendsetter Sheets 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 Term Sheet Negotiations for Trendsetter, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Term Sheet Negotiations for Trendsetter, Inc. case study
2. Improving business portfolio management of Trendsetter Sheets
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 Trendsetter Sheets
Strengths Term Sheet Negotiations for Trendsetter, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Trendsetter Sheets in Term Sheet Negotiations for Trendsetter, Inc. Harvard Business Review case study are -
Diverse revenue streams
– Trendsetter Sheets is present in almost all the verticals within the industry. This has provided firm in Term Sheet Negotiations for Trendsetter, Inc. 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.
Ability to recruit top talent
– Trendsetter Sheets is one of the leading recruiters in the industry. Managers in the Term Sheet Negotiations for Trendsetter, Inc. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Trendsetter Sheets
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Trendsetter Sheets does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Trendsetter Sheets has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Trendsetter Sheets to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Trendsetter Sheets 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Trendsetter Sheets digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Trendsetter Sheets 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 lead change in Innovation & Entrepreneurship field
– Trendsetter Sheets 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 Trendsetter Sheets 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 Term Sheet Negotiations for Trendsetter, Inc. 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.
Effective Research and Development (R&D)
– Trendsetter Sheets 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 Term Sheet Negotiations for Trendsetter, Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Trendsetter Sheets in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Trendsetter Sheets is one of the most innovative firm in sector. Manager in Term Sheet Negotiations for Trendsetter, Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Trendsetter Sheets is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Term Sheet Negotiations for Trendsetter, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Term Sheet Negotiations for Trendsetter, Inc. are -
High operating costs
– Compare to the competitors, firm in the HBR case study Term Sheet Negotiations for Trendsetter, Inc. 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 Trendsetter Sheets 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Trendsetter Sheets, firm in the HBR case study Term Sheet Negotiations for Trendsetter, Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Term Sheet Negotiations for Trendsetter, Inc. 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 Term Sheet Negotiations for Trendsetter, Inc. can leverage the sales team experience to cultivate customer relationships as Trendsetter Sheets is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Trendsetter Sheets is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Trendsetter Sheets needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Trendsetter Sheets to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Term Sheet Negotiations for Trendsetter, Inc. 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 Trendsetter Sheets has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Term Sheet Negotiations for Trendsetter, Inc., 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Walter Kuemmerle, William J. Coughlin suggests that, Trendsetter Sheets 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.
Capital Spending Reduction
– Even during the low interest decade, Trendsetter Sheets 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Term Sheet Negotiations for Trendsetter, Inc., in the dynamic environment Trendsetter Sheets has struggled to respond to the nimble upstart competition. Trendsetter Sheets has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Trendsetter Sheets products
– To increase the profitability and margins on the products, Trendsetter Sheets needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Trendsetter Sheets 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.
Opportunities Term Sheet Negotiations for Trendsetter, Inc. | 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 Term Sheet Negotiations for Trendsetter, Inc. are -
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. Trendsetter Sheets can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Trendsetter Sheets 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, Trendsetter Sheets can use these opportunities to build new business models that can help the communities that Trendsetter Sheets operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Trendsetter Sheets 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, Term Sheet Negotiations for Trendsetter, Inc., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Trendsetter Sheets 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
– Trendsetter Sheets 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 Term Sheet Negotiations for Trendsetter, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Trendsetter Sheets to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Trendsetter Sheets to increase its market reach. Trendsetter Sheets 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.
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 Trendsetter Sheets 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.
Leveraging digital technologies
– Trendsetter Sheets 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.
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 Trendsetter Sheets in the consumer business. Now Trendsetter Sheets can target international markets with far fewer capital restrictions requirements than the existing system.
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. Trendsetter Sheets 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. Trendsetter Sheets 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Trendsetter Sheets 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 Trendsetter Sheets to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Trendsetter Sheets is facing challenges because of the dominance of functional experts in the organization. Term Sheet Negotiations for Trendsetter, Inc. 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.
Threats Term Sheet Negotiations for Trendsetter, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Term Sheet Negotiations for Trendsetter, Inc. are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Trendsetter Sheets 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 Term Sheet Negotiations for Trendsetter, Inc. .
Consumer confidence and its impact on Trendsetter Sheets 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.
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 Trendsetter Sheets in the Innovation & Entrepreneurship 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.
Regulatory challenges
– Trendsetter Sheets 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.
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. Trendsetter Sheets can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Trendsetter Sheets.
Environmental challenges
– Trendsetter Sheets 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. Trendsetter Sheets can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Shortening product life cycle
– it is one of the major threat that Trendsetter Sheets is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Trendsetter Sheets has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Trendsetter Sheets 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. Trendsetter Sheets 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
– Trendsetter Sheets 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Trendsetter Sheets 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.
Weighted SWOT Analysis of Term Sheet Negotiations for Trendsetter, Inc. 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 Term Sheet Negotiations for Trendsetter, Inc. 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 Term Sheet Negotiations for Trendsetter, Inc. 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 Term Sheet Negotiations for Trendsetter, Inc. 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 Term Sheet Negotiations for Trendsetter, Inc. 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 Trendsetter Sheets needs to make to build a sustainable competitive advantage.
