EcoPost: Financing a Green Startup in Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of EcoPost: Financing a Green Startup in Africa
Based in Nairobi, Kenya, EcoPost manufactures construction posts out of the thousands of tons of plastic waste produced daily by the city. The posts, which are manufactured using second-hand industrial equipment, are frequently used to build fences, park benches, and other objects. Because lumber is very scarce in Kenya, and subject to theft and termite damage, the posts sell very well, and the company has trouble keeping up with demand. The company's directors are seeking financing to purchase new equipment and scale and diversify their production. However, they face many obstacles overcoming skepticism from investors, largely because of their relatively poor financial record keeping.
Authors :: Jesper Sorensen, Michael Kennedy, Gina Jorasch
Swot Analysis of "EcoPost: Financing a Green Startup in Africa" written by Jesper Sorensen, Michael Kennedy, Gina Jorasch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Posts Ecopost facing as an external strategic factors. Some of the topics covered in EcoPost: Financing a Green Startup in Africa case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Financial management, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the EcoPost: Financing a Green Startup in Africa casestudy better are - – technology disruption, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing energy prices, increasing commodity prices,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of EcoPost: Financing a Green Startup in Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in EcoPost: Financing a Green Startup in Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Posts Ecopost, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa can be done for the following purposes –
1. Strategic planning using facts provided in EcoPost: Financing a Green Startup in Africa case study
2. Improving business portfolio management of Posts Ecopost
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 Posts Ecopost
Strengths EcoPost: Financing a Green Startup in Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Posts Ecopost in EcoPost: Financing a Green Startup in Africa Harvard Business Review case study are -
Highly skilled collaborators
– Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Posts Ecopost is present in almost all the verticals within the industry. This has provided firm in EcoPost: Financing a Green Startup in Africa 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.
Superior customer experience
– The customer experience strategy of Posts Ecopost in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the EcoPost: Financing a Green Startup in Africa 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.
Training and development
– Posts Ecopost has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in EcoPost: Financing a Green Startup in Africa 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 Posts Ecopost digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Posts Ecopost 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.
Strong track record of project management
– Posts Ecopost is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Posts Ecopost has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Posts Ecopost 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.
High brand equity
– Posts Ecopost has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Posts Ecopost to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Posts Ecopost 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.
Effective Research and Development (R&D)
– Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Posts Ecopost 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.
Weaknesses EcoPost: Financing a Green Startup in Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EcoPost: Financing a Green Startup in Africa are -
Workers concerns about automation
– As automation is fast increasing in the segment, Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa 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 Posts Ecopost has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study EcoPost: Financing a Green Startup in Africa, it seems that the employees of Posts Ecopost 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jesper Sorensen, Michael Kennedy, Gina Jorasch suggests that, Posts Ecopost 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.
Need for greater diversity
– Posts Ecopost 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.
Aligning sales with marketing
– It come across in the case study EcoPost: Financing a Green Startup in Africa 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 EcoPost: Financing a Green Startup in Africa can leverage the sales team experience to cultivate customer relationships as Posts Ecopost is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa, in the dynamic environment Posts Ecopost has struggled to respond to the nimble upstart competition. Posts Ecopost has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Posts Ecopost is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study EcoPost: Financing a Green Startup in Africa can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study EcoPost: Financing a Green Startup in Africa, 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 operating costs
– Compare to the competitors, firm in the HBR case study EcoPost: Financing a Green Startup in Africa has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Posts Ecopost 's lucrative customers.
Opportunities EcoPost: Financing a Green Startup in Africa | 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 EcoPost: Financing a Green Startup in Africa are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Posts Ecopost 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 Posts Ecopost to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Posts Ecopost 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.
Developing new processes and practices
– Posts Ecopost 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.
Buying journey improvements
– Posts Ecopost can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. EcoPost: Financing a Green Startup in Africa 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.
Loyalty marketing
– Posts Ecopost 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.
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 Posts Ecopost in the consumer business. Now Posts Ecopost can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Posts Ecopost is facing challenges because of the dominance of functional experts in the organization. EcoPost: Financing a Green Startup in Africa 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.
Manufacturing automation
– Posts Ecopost 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Posts Ecopost 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.
Better consumer reach
– The expansion of the 5G network will help Posts Ecopost to increase its market reach. Posts Ecopost will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Posts Ecopost 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.
Learning at scale
– Online learning technologies has now opened space for Posts Ecopost 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Posts Ecopost 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, EcoPost: Financing a Green Startup in Africa, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats EcoPost: Financing a Green Startup in Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study EcoPost: Financing a Green Startup in Africa are -
Regulatory challenges
– Posts Ecopost 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.
Environmental challenges
– Posts Ecopost 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. Posts Ecopost can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Posts Ecopost.
Technology acceleration in Forth Industrial Revolution
– Posts Ecopost has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Posts Ecopost 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
– Posts Ecopost 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.
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. Posts Ecopost 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.
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 Posts Ecopost in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa .
Shortening product life cycle
– it is one of the major threat that Posts Ecopost is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Posts Ecopost can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Posts Ecopost needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Posts Ecopost 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.
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 Posts Ecopost business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of EcoPost: Financing a Green Startup in Africa 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 EcoPost: Financing a Green Startup in Africa 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 EcoPost: Financing a Green Startup in Africa 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 EcoPost: Financing a Green Startup in Africa 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 EcoPost: Financing a Green Startup in Africa 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 Posts Ecopost needs to make to build a sustainable competitive advantage.