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 - – challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing household debt because of falling income levels,
increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Underserved Startups digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Underserved Startups 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.
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.
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.
Highly skilled collaborators
– Underserved Startups 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 500 Startups (B): Expanding the Footprint in 2016 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Organizational Resilience of Underserved Startups
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Underserved Startups does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Analytics focus
– Underserved Startups is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert Siegel can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the 500 Startups (B): Expanding the Footprint in 2016 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.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Underserved Startups 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Underserved Startups is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study 500 Startups (B): Expanding the Footprint in 2016 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study 500 Startups (B): Expanding the Footprint in 2016, 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.
Capital Spending Reduction
– Even during the low interest decade, Underserved Startups has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study 500 Startups (B): Expanding the Footprint in 2016, is just above the industry average. Underserved Startups needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
Need for greater diversity
– Underserved Startups 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 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.
Interest costs
– Compare to the competition, Underserved Startups 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.
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.
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 -
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.
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 Underserved Startups in the consumer business. Now Underserved Startups can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
Buying journey improvements
– Underserved Startups can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. 500 Startups (B): Expanding the Footprint in 2016 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Underserved Startups 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Underserved Startups to increase its market reach. Underserved Startups 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.
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. Underserved Startups 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. Underserved Startups 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.
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 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.
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.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Underserved Startups 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.
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.
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.
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.
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 Underserved Startups.
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.
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. Underserved Startups 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
– 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.
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 Underserved Startups business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Underserved Startups 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.
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.