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 - – cloud computing is disrupting traditional business models, increasing commodity prices, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, technology disruption, 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 -
Ability to recruit top talent
– Posts Ecopost is one of the leading recruiters in the industry. Managers in the EcoPost: Financing a Green Startup in Africa are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Innovation & Entrepreneurship field
– Posts Ecopost 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 Posts Ecopost in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Posts Ecopost
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Posts Ecopost does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Posts Ecopost 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 Posts Ecopost is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in EcoPost: Financing a Green Startup in Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Posts Ecopost in the sector have low bargaining power. EcoPost: Financing a Green Startup in Africa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Posts Ecopost to manage not only supply disruptions but also source products at highly competitive prices.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– EcoPost: Financing a Green Startup in Africa firm has clearly differentiated products in the market place. This has enabled Posts Ecopost to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Posts Ecopost to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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.
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 -
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.
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 Posts Ecopost supply chain. Even after few cautionary changes mentioned in the HBR case study - EcoPost: Financing a Green Startup in Africa, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Posts Ecopost vulnerable to further global disruptions in South East Asia.
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.
Interest costs
– Compare to the competition, Posts Ecopost 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.
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.
Increasing silos among functional specialists
– The organizational structure of Posts Ecopost is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Posts Ecopost needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Posts Ecopost to focus more on services rather than just following the product oriented approach.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study EcoPost: Financing a Green Startup in Africa, is just above the industry average. Posts Ecopost 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.
Lack of clear differentiation of Posts Ecopost products
– To increase the profitability and margins on the products, Posts Ecopost needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Posts Ecopost has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - EcoPost: Financing a Green Startup in Africa should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Posts Ecopost, firm in the HBR case study EcoPost: Financing a Green Startup in Africa needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
Using analytics as competitive advantage
– Posts Ecopost 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 EcoPost: Financing a Green Startup in Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Posts Ecopost to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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. Posts Ecopost 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. Posts Ecopost 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Posts Ecopost can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Posts Ecopost can use these opportunities to build new business models that can help the communities that Posts Ecopost operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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.
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.
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.
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.
Building a culture of innovation
– managers at Posts Ecopost 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.
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.
Creating value in data economy
– The success of analytics program of Posts Ecopost has opened avenues for new revenue streams for the organization in the industry. This can help Posts Ecopost to build a more holistic ecosystem as suggested in the EcoPost: Financing a Green Startup in Africa case study. Posts Ecopost can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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 -
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 dependence on third party suppliers
– Posts Ecopost 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Posts Ecopost with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study EcoPost: Financing a Green Startup in Africa, Posts Ecopost 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 .
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 .
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.
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.
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.
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.
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.
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.
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.
