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 transportation and logistics costs, technology disruption, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing energy prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
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.
Strong track record of project management
– Underserved Startups is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Underserved Startups in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
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.
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.
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.
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.
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.
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.
Lack of clear differentiation of Underserved Startups products
– To increase the profitability and margins on the products, Underserved Startups needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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 Underserved Startups supply chain. Even after few cautionary changes mentioned in the HBR case study - 500 Startups (B): Expanding the Footprint in 2016, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Underserved Startups vulnerable to further global disruptions in South East Asia.
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.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Underserved Startups 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 Underserved Startups to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Underserved Startups 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, 500 Startups (B): Expanding the Footprint in 2016, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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.
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 -
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.
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 .
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 .
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.