Devil in the Details: Designing a Social Impact Bond Agreement in Medellin SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
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Case Study SWOT Analysis Solution
Case Study Description of Devil in the Details: Designing a Social Impact Bond Agreement in Medellin
In July 2012, three freshly-minted Harvard Kennedy School graduates bought one-way tickets to Medellin, Colombia, to launch a nonprofit startup they called Instiglio. Their idea: to bring Social Impact Bonds, still experimental even in affluent nations, to Colombia and other low to middle income countries. This statistics case-one of two nearly identical HKS cases about Instiglio-provides background about the SIB model (a financing mechanism for experimental social programs, with private investors shouldering the financial risk of failure) and tracks the early experience of the HKS graduates in Colombia. The case includes a summary of the issues the group faced in designing a first draft SIB agreement, including several questions about evaluation design and tricky issues in structuring a payment system. The other HKS Instiglio case, HKS case number 2026.0, "Betting Private Capital on Fixing Public Ills: Instiglio Brings Social Impact Bonds to Colombia," intended for a policy analysis course, emphasizes the process of selecting a project, given limited information and political complexities. Case number 2043.0
Swot Analysis of "Devil in the Details: Designing a Social Impact Bond Agreement in Medellin" written by Dan Levy, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Instiglio Colombia facing as an external strategic factors. Some of the topics covered in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin case study are - Strategic Management Strategies, Innovation and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Devil in the Details: Designing a Social Impact Bond Agreement in Medellin casestudy better are - – supply chains are disrupted by pandemic , technology disruption, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Devil in the Details: Designing a Social Impact Bond Agreement in Medellin
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Instiglio Colombia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Instiglio Colombia 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin can be done for the following purposes –
1. Strategic planning using facts provided in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin case study
2. Improving business portfolio management of Instiglio Colombia
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 Instiglio Colombia
Strengths Devil in the Details: Designing a Social Impact Bond Agreement in Medellin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Instiglio Colombia in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin Harvard Business Review case study are -
Ability to recruit top talent
– Instiglio Colombia is one of the leading recruiters in the industry. Managers in the Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Instiglio Colombia in the sector have low bargaining power. Devil in the Details: Designing a Social Impact Bond Agreement in Medellin has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Instiglio Colombia to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Instiglio Colombia is present in almost all the verticals within the industry. This has provided firm in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Effective Research and Development (R&D)
– Instiglio Colombia 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Instiglio Colombia 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
– Instiglio Colombia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Instiglio Colombia 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Devil in the Details: Designing a Social Impact Bond Agreement in Medellin firm has clearly differentiated products in the market place. This has enabled Instiglio Colombia to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Instiglio Colombia to invest into research and development (R&D) and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Instiglio Colombia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Instiglio Colombia 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.
Training and development
– Instiglio Colombia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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.
Learning organization
- Instiglio Colombia 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 Instiglio Colombia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Devil in the Details: Designing a Social Impact Bond Agreement in Medellin Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Instiglio Colombia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Instiglio Colombia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Instiglio Colombia 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 Dan Levy, Pamela Varley 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Devil in the Details: Designing a Social Impact Bond Agreement in Medellin are -
Lack of clear differentiation of Instiglio Colombia products
– To increase the profitability and margins on the products, Instiglio Colombia needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin can leverage the sales team experience to cultivate customer relationships as Instiglio Colombia is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Instiglio Colombia 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Instiglio Colombia 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Instiglio Colombia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Devil in the Details: Designing a Social Impact Bond Agreement in Medellin can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Instiglio Colombia supply chain. Even after few cautionary changes mentioned in the HBR case study - Devil in the Details: Designing a Social Impact Bond Agreement in Medellin, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Instiglio Colombia vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Devil in the Details: Designing a Social Impact Bond Agreement in Medellin, it seems that the employees of Instiglio Colombia 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.
Low market penetration in new markets
– Outside its home market of Instiglio Colombia, firm in the HBR case study Devil in the Details: Designing a Social Impact Bond Agreement in Medellin needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Instiglio Colombia is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Instiglio Colombia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Instiglio Colombia to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Instiglio Colombia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Instiglio Colombia even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Instiglio Colombia 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.
Opportunities Devil in the Details: Designing a Social Impact Bond Agreement in Medellin | 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin are -
Learning at scale
– Online learning technologies has now opened space for Instiglio Colombia 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.
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 Instiglio Colombia 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.
Developing new processes and practices
– Instiglio Colombia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Instiglio Colombia 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.
Buying journey improvements
– Instiglio Colombia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Instiglio Colombia 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, Devil in the Details: Designing a Social Impact Bond Agreement in Medellin, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Instiglio Colombia in the consumer business. Now Instiglio Colombia can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Instiglio Colombia 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.
Loyalty marketing
– Instiglio Colombia 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.
Using analytics as competitive advantage
– Instiglio Colombia 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Instiglio Colombia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Instiglio Colombia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Instiglio Colombia 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. Instiglio Colombia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Instiglio Colombia 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 Instiglio Colombia to hire the very best people irrespective of their geographical location.
Threats Devil in the Details: Designing a Social Impact Bond Agreement in Medellin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Devil in the Details: Designing a Social Impact Bond Agreement in Medellin are -
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. Instiglio Colombia 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Instiglio Colombia 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin .
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 Instiglio Colombia in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Instiglio Colombia is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Instiglio Colombia 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.
Stagnating economy with rate increase
– Instiglio Colombia 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.
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 Instiglio Colombia.
Technology acceleration in Forth Industrial Revolution
– Instiglio Colombia has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Instiglio Colombia 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.
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 Instiglio Colombia business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Instiglio Colombia 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.
Regulatory challenges
– Instiglio Colombia 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.
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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Devil in the Details: Designing a Social Impact Bond Agreement in Medellin 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 Instiglio Colombia needs to make to build a sustainable competitive advantage.
