Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd
This case discusses the trajectory taken by a Singapore-based entrepreneur who embarked on a multimillion business venture to turn food waste into energy. The brainchild of Edwin Khew, a veteran in the waste management business, IUT Global was formed in 2005 to set up and operate Singapore's first organic waste treatment plant. IUT's bio-methanisation plant was an ambitious project. Budgeted at $60 million, the plant was designed to process 800 tonnes of food waste and produce 10 megawatts of electricity most of which would be sold to Singapore's national electricity grid. Investors were optimistic that with their state of the art process technology and a ready customer, the plant would generate a steady income stream once it was set up and running. However, from the start of production although less than 10% of food waste in Singapore was being recycled, IUT encountered problems in the collection of food waste needed to feed its plant. It was unable to collect enough food waste and those collected contained a higher percentage of contaminants than projected. Furthermore, food operators resisted the need to separate food waste from solid waste. Unable to meet its production targets, and after three years of losses, in 2011, IUT entered into liquidation, and with it the closure of Singapore's first large scale food waste-to-energy facility. The case explores the following topics: First mover pitfalls in a sustainable energy venture; Analysis of new venture business plans; Implementation challenges for start-ups; Assumption testing/sensitivity analysis in costing of new ventures.
Swot Analysis of "Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd" written by Beng Geok Wee, Priya Subramanian, Thiruneeran Murugavel, Stephanie Tan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Waste Iut facing as an external strategic factors. Some of the topics covered in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd casestudy better are - – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Waste Iut, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Waste Iut 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd can be done for the following purposes –
1. Strategic planning using facts provided in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd case study
2. Improving business portfolio management of Waste Iut
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 Waste Iut
Strengths Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Waste Iut in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd Harvard Business Review case study are -
Diverse revenue streams
– Waste Iut is present in almost all the verticals within the industry. This has provided firm in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd firm has clearly differentiated products in the market place. This has enabled Waste Iut to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Waste Iut to invest into research and development (R&D) and innovation.
Analytics focus
– Waste Iut 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 Beng Geok Wee, Priya Subramanian, Thiruneeran Murugavel, Stephanie Tan 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.
Low bargaining power of suppliers
– Suppliers of Waste Iut in the sector have low bargaining power. Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Waste Iut to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Waste Iut 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 Waste Iut is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Waste Iut is one of the most innovative firm in sector. Manager in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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
– Waste Iut has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Waste Iut to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Waste Iut 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd - 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 Waste Iut in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Waste Iut has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Waste Iut 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.
Organizational Resilience of Waste Iut
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Waste Iut does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Waste Iut has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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.
Weaknesses Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd are -
No frontier risks strategy
– After analyzing the HBR case study Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, 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 cash cycle compare to competitors
Waste Iut 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Waste Iut needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Waste Iut has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Waste Iut 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, is just above the industry average. Waste Iut 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 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 Waste Iut supply chain. Even after few cautionary changes mentioned in the HBR case study - Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Waste Iut vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Waste Iut is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Waste Iut needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Waste Iut to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Waste Iut 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, in the dynamic environment Waste Iut has struggled to respond to the nimble upstart competition. Waste Iut 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 Waste Iut products
– To increase the profitability and margins on the products, Waste Iut needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd | 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd are -
Manufacturing automation
– Waste Iut 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Waste Iut is facing challenges because of the dominance of functional experts in the organization. Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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.
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 Waste Iut in the consumer business. Now Waste Iut can target international markets with far fewer capital restrictions requirements than the existing system.
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. Waste Iut can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Waste Iut has opened avenues for new revenue streams for the organization in the industry. This can help Waste Iut to build a more holistic ecosystem as suggested in the Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd case study. Waste Iut 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, Waste Iut 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, Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Waste Iut 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.
Building a culture of innovation
– managers at Waste Iut 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.
Leveraging digital technologies
– Waste Iut 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 Waste Iut 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.
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. Waste Iut 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. Waste Iut 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.
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. Waste Iut can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Waste Iut can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd are -
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. Waste Iut 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.
Increasing wage structure of Waste Iut
– 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 Waste Iut.
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.
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 Waste Iut 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 Waste Iut with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Waste Iut.
Regulatory challenges
– Waste Iut 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.
Stagnating economy with rate increase
– Waste Iut 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.
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 Waste Iut business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Waste Iut 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Waste Iut 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd .
Consumer confidence and its impact on Waste Iut 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Recycling Food Waste to Energy - First Mover Pitfalls: IUT Global Pte Ltd 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 Waste Iut needs to make to build a sustainable competitive advantage.