These three vignettes present various issues around the strategy and management of venture capital and private equity firms. In one, the general partners must decide whether to invest in an intriguing opportunity that lies outside the firm's carefully developed investment strategy; in the second, a new associate must decide whether or not to keep a promising but under-performing investment in the portfolio and in the third, a minority investor in an Chinese company considers removing a politically connected but ineffective controller
Authors :: Josh Lerner, G. Felda Hardymon, Matthew Rhodes-Kropf, Ann Leamon
Swot Analysis of "VCPE Strategy Vignettes" written by Josh Lerner, G. Felda Hardymon, Matthew Rhodes-Kropf, Ann Leamon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vignettes Vcpe facing as an external strategic factors. Some of the topics covered in VCPE Strategy Vignettes case study are - Strategic Management Strategies, Joint ventures, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the VCPE Strategy Vignettes casestudy better are - – increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, geopolitical disruptions, supply chains are disrupted by pandemic , technology disruption,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of VCPE Strategy Vignettes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VCPE Strategy Vignettes case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vignettes Vcpe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vignettes Vcpe 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 VCPE Strategy Vignettes can be done for the following purposes –
1. Strategic planning using facts provided in VCPE Strategy Vignettes case study
2. Improving business portfolio management of Vignettes Vcpe
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 Vignettes Vcpe
Strengths VCPE Strategy Vignettes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vignettes Vcpe in VCPE Strategy Vignettes Harvard Business Review case study are -
Ability to lead change in Innovation & Entrepreneurship field
– Vignettes Vcpe 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 Vignettes Vcpe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Vignettes Vcpe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vignettes Vcpe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Vignettes Vcpe 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 Vignettes Vcpe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in VCPE Strategy Vignettes Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the VCPE Strategy Vignettes 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.
Diverse revenue streams
– Vignettes Vcpe is present in almost all the verticals within the industry. This has provided firm in VCPE Strategy Vignettes 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.
Effective Research and Development (R&D)
– Vignettes Vcpe 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 VCPE Strategy Vignettes - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Vignettes Vcpe is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Vignettes Vcpe has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VCPE Strategy Vignettes 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Vignettes Vcpe digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vignettes Vcpe 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.
Innovation driven organization
– Vignettes Vcpe is one of the most innovative firm in sector. Manager in VCPE Strategy Vignettes Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Vignettes Vcpe 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 Josh Lerner, G. Felda Hardymon, Matthew Rhodes-Kropf, Ann Leamon 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.
Ability to recruit top talent
– Vignettes Vcpe is one of the leading recruiters in the industry. Managers in the VCPE Strategy Vignettes 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 VCPE Strategy Vignettes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VCPE Strategy Vignettes are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the VCPE Strategy Vignettes 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 Vignettes Vcpe has relatively successful track record of launching new products.
Need for greater diversity
– Vignettes Vcpe 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.
Slow to strategic competitive environment developments
– As VCPE Strategy Vignettes HBR case study mentions - Vignettes Vcpe 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.
No frontier risks strategy
– After analyzing the HBR case study VCPE Strategy Vignettes, 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 bargaining power of channel partners
– Because of the regulatory requirements, Josh Lerner, G. Felda Hardymon, Matthew Rhodes-Kropf, Ann Leamon suggests that, Vignettes Vcpe 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.
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 Vignettes Vcpe supply chain. Even after few cautionary changes mentioned in the HBR case study - VCPE Strategy Vignettes, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vignettes Vcpe vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Vignettes Vcpe 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.
Increasing silos among functional specialists
– The organizational structure of Vignettes Vcpe is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Vignettes Vcpe needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vignettes Vcpe to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study VCPE Strategy Vignettes 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 VCPE Strategy Vignettes can leverage the sales team experience to cultivate customer relationships as Vignettes Vcpe is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Vignettes Vcpe 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study VCPE Strategy Vignettes, in the dynamic environment Vignettes Vcpe has struggled to respond to the nimble upstart competition. Vignettes Vcpe has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities VCPE Strategy Vignettes | 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 VCPE Strategy Vignettes are -
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. Vignettes Vcpe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Vignettes Vcpe 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.
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. Vignettes Vcpe 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. Vignettes Vcpe 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.
Manufacturing automation
– Vignettes Vcpe 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.
Building a culture of innovation
– managers at Vignettes Vcpe 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.
Buying journey improvements
– Vignettes Vcpe can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. VCPE Strategy Vignettes 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.
Developing new processes and practices
– Vignettes Vcpe 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vignettes Vcpe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vignettes Vcpe 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 Vignettes Vcpe to hire the very best people irrespective of their geographical location.
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 Vignettes Vcpe in the consumer business. Now Vignettes Vcpe 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 Vignettes Vcpe has opened avenues for new revenue streams for the organization in the industry. This can help Vignettes Vcpe to build a more holistic ecosystem as suggested in the VCPE Strategy Vignettes case study. Vignettes Vcpe can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vignettes Vcpe 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.
Learning at scale
– Online learning technologies has now opened space for Vignettes Vcpe 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.
Threats VCPE Strategy Vignettes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VCPE Strategy Vignettes are -
Increasing wage structure of Vignettes Vcpe
– 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 Vignettes Vcpe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vignettes Vcpe 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vignettes Vcpe 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 VCPE Strategy Vignettes .
Environmental challenges
– Vignettes Vcpe 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. Vignettes Vcpe can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vignettes Vcpe with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Vignettes Vcpe is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Vignettes Vcpe 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
– Vignettes Vcpe 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.
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 Vignettes Vcpe.
Consumer confidence and its impact on Vignettes Vcpe 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High 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. Vignettes Vcpe needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of VCPE Strategy Vignettes 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 VCPE Strategy Vignettes 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 VCPE Strategy Vignettes 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 VCPE Strategy Vignettes 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 VCPE Strategy Vignettes 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 Vignettes Vcpe needs to make to build a sustainable competitive advantage.