Case Study Description of Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture
EFL provides credit-scoring services in developing countries using psychometric assessment, but the potential loss of a large customer makes them reconsider their scaling narrative.
Authors :: Joan Farre-Mensa, William R. Kerr, Alexis Brownell
Swot Analysis of "Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture" written by Joan Farre-Mensa, William R. Kerr, Alexis Brownell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Scaling Psychometric facing as an external strategic factors. Some of the topics covered in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture case study are - Strategic Management Strategies, Entrepreneurship, Financial management, Growth strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture casestudy better are - – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, wage bills are increasing, supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scaling Psychometric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scaling Psychometric 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture can be done for the following purposes –
1. Strategic planning using facts provided in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture case study
2. Improving business portfolio management of Scaling Psychometric
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 Scaling Psychometric
Strengths Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Scaling Psychometric in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture Harvard Business Review case study are -
Effective Research and Development (R&D)
– Scaling Psychometric 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Scaling Psychometric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Scaling Psychometric 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.
Ability to recruit top talent
– Scaling Psychometric is one of the leading recruiters in the industry. Managers in the Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Scaling Psychometric in the sector have low bargaining power. Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Scaling Psychometric to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Scaling Psychometric 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Scaling Psychometric 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 Scaling Psychometric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture firm has clearly differentiated products in the market place. This has enabled Scaling Psychometric to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Scaling Psychometric to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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
– Scaling Psychometric is present in almost all the verticals within the industry. This has provided firm in Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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.
Analytics focus
– Scaling Psychometric 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 Joan Farre-Mensa, William R. Kerr, Alexis Brownell 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.
Organizational Resilience of Scaling Psychometric
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Scaling Psychometric does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Scaling Psychometric in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture are -
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 Scaling Psychometric supply chain. Even after few cautionary changes mentioned in the HBR case study - Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Scaling Psychometric vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Scaling Psychometric 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.
High cash cycle compare to competitors
Scaling Psychometric 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.
Capital Spending Reduction
– Even during the low interest decade, Scaling Psychometric 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.
No frontier risks strategy
– After analyzing the HBR case study Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture, 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.
Lack of clear differentiation of Scaling Psychometric products
– To increase the profitability and margins on the products, Scaling Psychometric needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Scaling Psychometric is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Scaling Psychometric 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.
Low market penetration in new markets
– Outside its home market of Scaling Psychometric, firm in the HBR case study Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture, is just above the industry average. Scaling Psychometric 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.
Need for greater diversity
– Scaling Psychometric 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.
Opportunities Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture | 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Scaling Psychometric 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 Scaling Psychometric to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Scaling Psychometric can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Scaling Psychometric can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Scaling Psychometric can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Scaling Psychometric 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.
Loyalty marketing
– Scaling Psychometric 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.
Buying journey improvements
– Scaling Psychometric can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Scaling Psychometric 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Scaling Psychometric is facing challenges because of the dominance of functional experts in the organization. Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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.
Using analytics as competitive advantage
– Scaling Psychometric has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scaling Psychometric to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Scaling Psychometric has opened avenues for new revenue streams for the organization in the industry. This can help Scaling Psychometric to build a more holistic ecosystem as suggested in the Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture case study. Scaling Psychometric can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Scaling Psychometric 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.
Manufacturing automation
– Scaling Psychometric 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.
Threats Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Scaling Psychometric in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Scaling Psychometric has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Scaling Psychometric 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.
Stagnating economy with rate increase
– Scaling Psychometric can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Scaling Psychometric 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture .
Shortening product life cycle
– it is one of the major threat that Scaling Psychometric is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Scaling Psychometric 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. Scaling Psychometric can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Regulatory challenges
– Scaling Psychometric 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.
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. Scaling Psychometric 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.
Consumer confidence and its impact on Scaling Psychometric 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.
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. Scaling Psychometric can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Scaling Psychometric 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.
Weighted SWOT Analysis of Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture 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 Scaling Psychometric needs to make to build a sustainable competitive advantage.
