New Enterprise Associates in India: The Agile International Venture Capital Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of New Enterprise Associates in India: The Agile International Venture Capital Firm
A swelling current account deficit, ballooning interest rates, and a plunging currency: These were just some of the worrisome trends in India that Krishna 'Kittu' Kolluri contemplated on his 20-hour return flight from Mumbai to Silicon Valley in September 2013. The U.S-based general partner co-leading India investments at New Enterprise Associates (NEA) reflected on how the American venture capital firm just 18 months earlier had set aside US$200 million of its US$2.6 billion world fund for investments in the sub-continent. Now Kolluri was mulling over whether to recommend changes to NEA's India strategy at the VC firm's quarterly general partner meeting in Washington, DC in October and the potential for missing out on lucrative investment opportunities in India if NEA played it too safe. This case closely examines how a venture capital firm creates and implements a strategy to invest outside the United States. It presents U.S. venture capital firm NEA's response to globalization and a contracting U.S. venture capital industry via an innovative global fund strategy that emphasizes agility in investment decision-making across and within geographies and sectors. The case focuses specifically on NEA's activities in India to illustrate the various elements of this strategy. It asks students to analyze the advantages and challenges of investing in an emerging market located half a world away both logistically and culturally, through a large, U.S.-based, multi-country venture fund. Students evaluate NEA's global fund strategy and determine the best investment strategy to follow in India given the country's deteriorating macro-economic situation at the time. They examine NEA's decision-making processes, communication channels, and incentive systems for its India practice. They gain a deeper understanding of what a U.S. venture capital firm like NEA expects from portfolio companies in emerging markets and what those portfolio companies receive in return.
Swot Analysis of "New Enterprise Associates in India: The Agile International Venture Capital Firm" written by Pamela Yatsko, Peter Ziebelman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nea's Nea facing as an external strategic factors. Some of the topics covered in New Enterprise Associates in India: The Agile International Venture Capital Firm case study are - Strategic Management Strategies, Decision making, Financial management, Globalization, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the New Enterprise Associates in India: The Agile International Venture Capital Firm casestudy better are - – increasing transportation and logistics costs, technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , wage bills are increasing, etc
Introduction to SWOT Analysis of New Enterprise Associates in India: The Agile International Venture Capital Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New Enterprise Associates in India: The Agile International Venture Capital Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nea's Nea, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nea's Nea 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 New Enterprise Associates in India: The Agile International Venture Capital Firm can be done for the following purposes –
1. Strategic planning using facts provided in New Enterprise Associates in India: The Agile International Venture Capital Firm case study
2. Improving business portfolio management of Nea's Nea
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 Nea's Nea
Strengths New Enterprise Associates in India: The Agile International Venture Capital Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nea's Nea in New Enterprise Associates in India: The Agile International Venture Capital Firm Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the New Enterprise Associates in India: The Agile International Venture Capital Firm 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.
Superior customer experience
– The customer experience strategy of Nea's Nea in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Nea's Nea
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nea's Nea does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Nea's Nea 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 Nea's Nea is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in New Enterprise Associates in India: The Agile International Venture Capital Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Nea's Nea 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 Pamela Yatsko, Peter Ziebelman 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.
Highly skilled collaborators
– Nea's Nea 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 New Enterprise Associates in India: The Agile International Venture Capital Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Nea's Nea has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nea's Nea 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.
Effective Research and Development (R&D)
– Nea's Nea 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 New Enterprise Associates in India: The Agile International Venture Capital Firm - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Innovation & Entrepreneurship field
– Nea's Nea 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 Nea's Nea in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Nea's Nea digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nea's Nea 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.
Cross disciplinary teams
– Horizontal connected teams at the Nea's Nea 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.
Training and development
– Nea's Nea has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New Enterprise Associates in India: The Agile International Venture Capital Firm 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.
Weaknesses New Enterprise Associates in India: The Agile International Venture Capital Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New Enterprise Associates in India: The Agile International Venture Capital Firm are -
High cash cycle compare to competitors
Nea's Nea has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Nea's Nea 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 Nea's Nea products
– To increase the profitability and margins on the products, Nea's Nea needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Pamela Yatsko, Peter Ziebelman suggests that, Nea's Nea 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study New Enterprise Associates in India: The Agile International Venture Capital Firm, in the dynamic environment Nea's Nea has struggled to respond to the nimble upstart competition. Nea's Nea has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Nea's Nea, firm in the HBR case study New Enterprise Associates in India: The Agile International Venture Capital Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Nea's Nea 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.
High operating costs
– Compare to the competitors, firm in the HBR case study New Enterprise Associates in India: The Agile International Venture Capital Firm 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 Nea's Nea 's lucrative customers.
Products dominated business model
– Even though Nea's Nea 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 - New Enterprise Associates in India: The Agile International Venture Capital Firm should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study New Enterprise Associates in India: The Agile International Venture Capital Firm, 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 Nea's Nea supply chain. Even after few cautionary changes mentioned in the HBR case study - New Enterprise Associates in India: The Agile International Venture Capital Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nea's Nea vulnerable to further global disruptions in South East Asia.
Opportunities New Enterprise Associates in India: The Agile International Venture Capital Firm | 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 New Enterprise Associates in India: The Agile International Venture Capital Firm are -
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. Nea's Nea 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. Nea's Nea 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nea's Nea is facing challenges because of the dominance of functional experts in the organization. New Enterprise Associates in India: The Agile International Venture Capital Firm 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.
Developing new processes and practices
– Nea's Nea can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nea's Nea can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Nea's Nea can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. New Enterprise Associates in India: The Agile International Venture Capital Firm 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.
Creating value in data economy
– The success of analytics program of Nea's Nea has opened avenues for new revenue streams for the organization in the industry. This can help Nea's Nea to build a more holistic ecosystem as suggested in the New Enterprise Associates in India: The Agile International Venture Capital Firm case study. Nea's Nea can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Nea's Nea 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 Nea's Nea 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 Nea's Nea to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nea's Nea 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, New Enterprise Associates in India: The Agile International Venture Capital Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Nea's Nea can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nea's Nea can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Nea's Nea 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nea's Nea 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.
Threats New Enterprise Associates in India: The Agile International Venture Capital Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New Enterprise Associates in India: The Agile International Venture Capital Firm are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nea's Nea 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 New Enterprise Associates in India: The Agile International Venture Capital Firm .
Stagnating economy with rate increase
– Nea's Nea 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.
Regulatory challenges
– Nea's Nea 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 acceleration in Forth Industrial Revolution
– Nea's Nea has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Nea's Nea 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.
Shortening product life cycle
– it is one of the major threat that Nea's Nea is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Nea's Nea needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Nea's Nea business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Nea's Nea high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Nea's Nea
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Nea's Nea.
Consumer confidence and its impact on Nea's Nea 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.
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. Nea's Nea 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.
Weighted SWOT Analysis of New Enterprise Associates in India: The Agile International Venture Capital Firm 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 New Enterprise Associates in India: The Agile International Venture Capital Firm 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 New Enterprise Associates in India: The Agile International Venture Capital Firm 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 New Enterprise Associates in India: The Agile International Venture Capital Firm 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 New Enterprise Associates in India: The Agile International Venture Capital Firm 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 Nea's Nea needs to make to build a sustainable competitive advantage.
