500 Startups (B): Expanding the Footprint in 2016 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of 500 Startups (B): Expanding the Footprint in 2016
Supplement to case E528. 500 Startups continued its expansion of accelerators and venture capital to cover a global footprint for underserved entrepreneurial markets between 2014 and 2016. As investment returns began to occur, the organization looked to grow and expand beyond Silicon Valley and increase its presence in locations that were underserved by traditional venture capital. The case tells of the activities of McClure and the leadership team as they spread their activities across Asia and the Middle East, and became increasingly active in the venture and accelerator landscape.
Swot Analysis of "500 Startups (B): Expanding the Footprint in 2016" written by Robert Siegel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Underserved Startups facing as an external strategic factors. Some of the topics covered in 500 Startups (B): Expanding the Footprint in 2016 case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Leadership, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the 500 Startups (B): Expanding the Footprint in 2016 casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing energy prices, talent flight as more people leaving formal jobs,
increasing commodity prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of 500 Startups (B): Expanding the Footprint in 2016
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in 500 Startups (B): Expanding the Footprint in 2016 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Underserved Startups, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 can be done for the following purposes –
1. Strategic planning using facts provided in 500 Startups (B): Expanding the Footprint in 2016 case study
2. Improving business portfolio management of Underserved Startups
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 Underserved Startups
Strengths 500 Startups (B): Expanding the Footprint in 2016 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Underserved Startups in 500 Startups (B): Expanding the Footprint in 2016 Harvard Business Review case study are -
Training and development
– Underserved Startups has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in 500 Startups (B): Expanding the Footprint in 2016 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.
High switching costs
– The high switching costs that Underserved Startups 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.
Low bargaining power of suppliers
– Suppliers of Underserved Startups in the sector have low bargaining power. 500 Startups (B): Expanding the Footprint in 2016 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Underserved Startups to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Underserved Startups is one of the most innovative firm in sector. Manager in 500 Startups (B): Expanding the Footprint in 2016 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Underserved Startups 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
– Underserved Startups is present in almost all the verticals within the industry. This has provided firm in 500 Startups (B): Expanding the Footprint in 2016 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.
High brand equity
– Underserved Startups has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Underserved Startups to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Underserved Startups 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 Underserved Startups in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Underserved Startups 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 Underserved Startups is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in 500 Startups (B): Expanding the Footprint in 2016 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Underserved Startups has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Underserved Startups 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– 500 Startups (B): Expanding the Footprint in 2016 firm has clearly differentiated products in the market place. This has enabled Underserved Startups to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Underserved Startups to invest into research and development (R&D) and innovation.
Weaknesses 500 Startups (B): Expanding the Footprint in 2016 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 500 Startups (B): Expanding the Footprint in 2016 are -
Low market penetration in new markets
– Outside its home market of Underserved Startups, firm in the HBR case study 500 Startups (B): Expanding the Footprint in 2016 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study 500 Startups (B): Expanding the Footprint in 2016 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 500 Startups (B): Expanding the Footprint in 2016 can leverage the sales team experience to cultivate customer relationships as Underserved Startups is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Underserved Startups is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Underserved Startups needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 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 Underserved Startups 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study 500 Startups (B): Expanding the Footprint in 2016, it seems that the employees of Underserved Startups don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Underserved Startups 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 to strategic competitive environment developments
– As 500 Startups (B): Expanding the Footprint in 2016 HBR case study mentions - Underserved Startups 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.
Slow decision making process
– As mentioned earlier in the report, Underserved Startups 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. Underserved Startups 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert Siegel suggests that, Underserved Startups 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.
Products dominated business model
– Even though Underserved Startups 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 - 500 Startups (B): Expanding the Footprint in 2016 should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the 500 Startups (B): Expanding the Footprint in 2016 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 Underserved Startups has relatively successful track record of launching new products.
Opportunities 500 Startups (B): Expanding the Footprint in 2016 | 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 500 Startups (B): Expanding the Footprint in 2016 are -
Learning at scale
– Online learning technologies has now opened space for Underserved Startups to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Underserved Startups to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Underserved Startups is facing challenges because of the dominance of functional experts in the organization. 500 Startups (B): Expanding the Footprint in 2016 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.
Building a culture of innovation
– managers at Underserved Startups can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Creating value in data economy
– The success of analytics program of Underserved Startups has opened avenues for new revenue streams for the organization in the industry. This can help Underserved Startups to build a more holistic ecosystem as suggested in the 500 Startups (B): Expanding the Footprint in 2016 case study. Underserved Startups 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 Underserved Startups 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.
Manufacturing automation
– Underserved Startups 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.
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. Underserved Startups 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. Underserved Startups 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, Underserved Startups can use these opportunities to build new business models that can help the communities that Underserved Startups operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Underserved Startups 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Underserved Startups 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.
Leveraging digital technologies
– Underserved Startups 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.
Threats 500 Startups (B): Expanding the Footprint in 2016 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study 500 Startups (B): Expanding the Footprint in 2016 are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 .
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. Underserved Startups 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.
Environmental challenges
– Underserved Startups 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. Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016, Underserved Startups 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 .
Regulatory challenges
– Underserved Startups 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.
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.
High dependence on third party suppliers
– Underserved Startups 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.
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 Underserved Startups in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Underserved Startups with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Underserved Startups
– 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 Underserved Startups.
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. Underserved Startups needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Underserved Startups is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Underserved Startups 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.
Weighted SWOT Analysis of 500 Startups (B): Expanding the Footprint in 2016 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 500 Startups (B): Expanding the Footprint in 2016 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 500 Startups (B): Expanding the Footprint in 2016 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 500 Startups (B): Expanding the Footprint in 2016 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 500 Startups (B): Expanding the Footprint in 2016 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 Underserved Startups needs to make to build a sustainable competitive advantage.
