VC Decision-Making in India: Aavishkaar and Milk Mantra (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of VC Decision-Making in India: Aavishkaar and Milk Mantra (B)
The case profiles the protagonist, Vineet Rai, managing partner of Aavishkaar Venture Management Services (an Indian, early stage VC firm with a focus on rural, underserved regions and sectors), as he seeks to build on the initial traction of his first venture fund and strives to raise a second, larger, and more ambitious fund. The case discusses Rai's "lessons learned" from his first fund (profiled in Case A), and discusses how such lessons have informed a changed approach to the Aavishkaar thesis and fund structure. It also provides a series of snapshots from prospective LPs in the fund being raised.
Swot Analysis of "VC Decision-Making in India: Aavishkaar and Milk Mantra (B)" written by Justin Randolph, Ilya Strebulaev includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aavishkaar Fund facing as an external strategic factors. Some of the topics covered in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) case study are - Strategic Management Strategies, Financial management, Marketing and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the VC Decision-Making in India: Aavishkaar and Milk Mantra (B) casestudy better are - – increasing household debt because of falling income levels, increasing commodity prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , there is increasing trade war between United States & China,
cloud computing is disrupting traditional business models, geopolitical disruptions, etc
Introduction to SWOT Analysis of VC Decision-Making in India: Aavishkaar and Milk Mantra (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aavishkaar Fund, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aavishkaar Fund 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) can be done for the following purposes –
1. Strategic planning using facts provided in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) case study
2. Improving business portfolio management of Aavishkaar Fund
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 Aavishkaar Fund
Strengths VC Decision-Making in India: Aavishkaar and Milk Mantra (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aavishkaar Fund in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) Harvard Business Review case study are -
Training and development
– Aavishkaar Fund has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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.
Low bargaining power of suppliers
– Suppliers of Aavishkaar Fund in the sector have low bargaining power. VC Decision-Making in India: Aavishkaar and Milk Mantra (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aavishkaar Fund to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Aavishkaar Fund 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 Aavishkaar Fund is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in VC Decision-Making in India: Aavishkaar and Milk Mantra (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the VC Decision-Making in India: Aavishkaar and Milk Mantra (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Aavishkaar Fund 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Aavishkaar Fund 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Aavishkaar Fund digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aavishkaar Fund 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.
High switching costs
– The high switching costs that Aavishkaar Fund 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.
Analytics focus
– Aavishkaar Fund 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 Justin Randolph, Ilya Strebulaev 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.
Cross disciplinary teams
– Horizontal connected teams at the Aavishkaar Fund 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– VC Decision-Making in India: Aavishkaar and Milk Mantra (B) firm has clearly differentiated products in the market place. This has enabled Aavishkaar Fund to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Aavishkaar Fund to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Aavishkaar Fund is one of the leading recruiters in the industry. Managers in the VC Decision-Making in India: Aavishkaar and Milk Mantra (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses VC Decision-Making in India: Aavishkaar and Milk Mantra (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VC Decision-Making in India: Aavishkaar and Milk Mantra (B) are -
Slow decision making process
– As mentioned earlier in the report, Aavishkaar Fund 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. Aavishkaar Fund 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B), in the dynamic environment Aavishkaar Fund has struggled to respond to the nimble upstart competition. Aavishkaar Fund has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Aavishkaar Fund 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.
Interest costs
– Compare to the competition, Aavishkaar Fund 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B), is just above the industry average. Aavishkaar Fund 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B), it seems that the employees of Aavishkaar Fund 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aavishkaar Fund is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Aavishkaar Fund 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.
Low market penetration in new markets
– Outside its home market of Aavishkaar Fund, firm in the HBR case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As VC Decision-Making in India: Aavishkaar and Milk Mantra (B) HBR case study mentions - Aavishkaar Fund 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 bargaining power of channel partners
– Because of the regulatory requirements, Justin Randolph, Ilya Strebulaev suggests that, Aavishkaar Fund 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.
Opportunities VC Decision-Making in India: Aavishkaar and Milk Mantra (B) | 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) are -
Buying journey improvements
– Aavishkaar Fund can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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.
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. Aavishkaar Fund 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. Aavishkaar Fund 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aavishkaar Fund is facing challenges because of the dominance of functional experts in the organization. VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 Aavishkaar Fund in the consumer business. Now Aavishkaar Fund can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Aavishkaar Fund has opened avenues for new revenue streams for the organization in the industry. This can help Aavishkaar Fund to build a more holistic ecosystem as suggested in the VC Decision-Making in India: Aavishkaar and Milk Mantra (B) case study. Aavishkaar Fund can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aavishkaar Fund 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 Aavishkaar Fund to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Aavishkaar Fund 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.
Leveraging digital technologies
– Aavishkaar Fund 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.
Loyalty marketing
– Aavishkaar Fund has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aavishkaar Fund 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aavishkaar Fund can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Aavishkaar Fund 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 Aavishkaar Fund 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.
Threats VC Decision-Making in India: Aavishkaar and Milk Mantra (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B) are -
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 Aavishkaar Fund business can come under increasing regulations regarding data privacy, data security, etc.
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. Aavishkaar Fund needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Aavishkaar Fund 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.
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 Aavishkaar Fund.
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.
High dependence on third party suppliers
– Aavishkaar Fund 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. Aavishkaar Fund can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Aavishkaar Fund 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.
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 Aavishkaar Fund in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Aavishkaar Fund has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Aavishkaar Fund needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study VC Decision-Making in India: Aavishkaar and Milk Mantra (B), Aavishkaar Fund 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 .
Shortening product life cycle
– it is one of the major threat that Aavishkaar Fund is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 VC Decision-Making in India: Aavishkaar and Milk Mantra (B) 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 Aavishkaar Fund needs to make to build a sustainable competitive advantage.
