Better Ventures: Backing Entrepreneurs Building a Better World SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Better Ventures: Backing Entrepreneurs Building a Better World
This case centers on BV as it seeks to raise $20 million for its first standalone fund between 2014 and 2016. Wes Selke and Rick Moss, the two BV co-founders, had built their experience in impact investing when they founded and managed Hub Ventures (HV) (a smaller accelerator-type fund of $500,000) immediately prior to founding BV. Encouraged by the economic return and social impact from those early-stage, mission-driven HV investments, both Selke and Moss decided in late 2014 to raise a separate and much larger fund called Better Ventures Fund II (BVFII). This new fund would allow BV to make larger initial investments in its early stage portfolio companies and provide the needed capital to make add-on investments in subsequent financing rounds. The case discusses the challenges of raising capital for this new fund as well as BV's investment and impact theses, deal sourcing, and post-investment approach. The case eventually explores the next steps for BV, after successfully raising this first-time fund.
Swot Analysis of "Better Ventures: Backing Entrepreneurs Building a Better World" written by Jennifer Walske, Laura D. Tyson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bv Fund facing as an external strategic factors. Some of the topics covered in Better Ventures: Backing Entrepreneurs Building a Better World case study are - Strategic Management Strategies, Social enterprise, Sustainability, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Better Ventures: Backing Entrepreneurs Building a Better World casestudy better are - – technology disruption, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Better Ventures: Backing Entrepreneurs Building a Better World
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Better Ventures: Backing Entrepreneurs Building a Better World case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bv Fund, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bv Fund operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Better Ventures: Backing Entrepreneurs Building a Better World can be done for the following purposes –
1. Strategic planning using facts provided in Better Ventures: Backing Entrepreneurs Building a Better World case study
2. Improving business portfolio management of Bv Fund
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bv Fund
Strengths Better Ventures: Backing Entrepreneurs Building a Better World | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bv Fund in Better Ventures: Backing Entrepreneurs Building a Better World Harvard Business Review case study are -
High brand equity
– Bv Fund has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bv Fund to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Better Ventures: Backing Entrepreneurs Building a Better World firm has clearly differentiated products in the market place. This has enabled Bv Fund to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Bv Fund to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Bv Fund is one of the leading recruiters in the industry. Managers in the Better Ventures: Backing Entrepreneurs Building a Better World are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Bv Fund in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Bv Fund is one of the most innovative firm in sector. Manager in Better Ventures: Backing Entrepreneurs Building a Better World Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Bv Fund has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Better Ventures: Backing Entrepreneurs Building a Better World 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.
Effective Research and Development (R&D)
– Bv Fund has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Better Ventures: Backing Entrepreneurs Building a Better World - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Bv Fund digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bv Fund has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Bv Fund
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bv Fund does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Bv Fund has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bv Fund 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.
Low bargaining power of suppliers
– Suppliers of Bv Fund in the sector have low bargaining power. Better Ventures: Backing Entrepreneurs Building a Better World has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bv Fund to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Bv Fund is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jennifer Walske, Laura D. Tyson 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.
Weaknesses Better Ventures: Backing Entrepreneurs Building a Better World | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Better Ventures: Backing Entrepreneurs Building a Better World are -
High operating costs
– Compare to the competitors, firm in the HBR case study Better Ventures: Backing Entrepreneurs Building a Better World 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 Bv Fund 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Bv Fund is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Bv Fund needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bv Fund to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Better Ventures: Backing Entrepreneurs Building a Better World HBR case study mentions - Bv Fund takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Better Ventures: Backing Entrepreneurs Building a Better World, in the dynamic environment Bv Fund has struggled to respond to the nimble upstart competition. Bv Fund has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Bv Fund 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 Better Ventures: Backing Entrepreneurs Building a Better World, 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 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 Bv Fund supply chain. Even after few cautionary changes mentioned in the HBR case study - Better Ventures: Backing Entrepreneurs Building a Better World, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bv Fund vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Jennifer Walske, Laura D. Tyson suggests that, Bv Fund is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Bv Fund has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Bv Fund 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.
Lack of clear differentiation of Bv Fund products
– To increase the profitability and margins on the products, Bv Fund needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Better Ventures: Backing Entrepreneurs Building a Better World | 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 Better Ventures: Backing Entrepreneurs Building a Better World are -
Leveraging digital technologies
– Bv Fund can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– Bv Fund 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 Better Ventures: Backing Entrepreneurs Building a Better World - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bv Fund to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bv Fund to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bv Fund to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Bv Fund can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Better consumer reach
– The expansion of the 5G network will help Bv Fund to increase its market reach. Bv Fund 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bv Fund can use these opportunities to build new business models that can help the communities that Bv Fund operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Bv Fund can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bv Fund can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 Bv Fund 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.
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. Bv Fund can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Bv Fund 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.
Loyalty marketing
– Bv Fund has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for Bv Fund to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Bv Fund can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Better Ventures: Backing Entrepreneurs Building a Better World External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Better Ventures: Backing Entrepreneurs Building a Better World are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Better Ventures: Backing Entrepreneurs Building a Better World, Bv Fund may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Stagnating economy with rate increase
– Bv Fund can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bv Fund with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Bv Fund in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Bv Fund 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. Bv Fund can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Shortening product life cycle
– it is one of the major threat that Bv Fund 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. Bv Fund can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Bv Fund.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Bv Fund has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Bv Fund needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Bv Fund 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.
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 Bv Fund business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Bv Fund needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Weighted SWOT Analysis of Better Ventures: Backing Entrepreneurs Building a Better World 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 Better Ventures: Backing Entrepreneurs Building a Better World 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 Better Ventures: Backing Entrepreneurs Building a Better World 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 Better Ventures: Backing Entrepreneurs Building a Better World 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 Better Ventures: Backing Entrepreneurs Building a Better World 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 Bv Fund needs to make to build a sustainable competitive advantage.
