Location Choice for New Ventures: Choices within Cities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Location Choice for New Ventures: Choices within Cities
This note describes location choice decisions for start-up companies within a city: for instance, what to look for in a facility and the economics of clusters.
Swot Analysis of "Location Choice for New Ventures: Choices within Cities" written by William R. Kerr, Alexis Brownell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Location Choice facing as an external strategic factors. Some of the topics covered in Location Choice for New Ventures: Choices within Cities case study are - Strategic Management Strategies, Entrepreneurship, Operations management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Location Choice for New Ventures: Choices within Cities casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing, cloud computing is disrupting traditional business models,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Location Choice for New Ventures: Choices within Cities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Location Choice for New Ventures: Choices within Cities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Location Choice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Location Choice 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 Location Choice for New Ventures: Choices within Cities can be done for the following purposes –
1. Strategic planning using facts provided in Location Choice for New Ventures: Choices within Cities case study
2. Improving business portfolio management of Location Choice
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 Location Choice
Strengths Location Choice for New Ventures: Choices within Cities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Location Choice in Location Choice for New Ventures: Choices within Cities Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Location Choice in the sector have low bargaining power. Location Choice for New Ventures: Choices within Cities has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Location Choice to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Location Choice 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 Location Choice for New Ventures: Choices within Cities - 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 brand equity
– Location Choice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Location Choice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Location Choice 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 Location Choice is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Location Choice for New Ventures: Choices within Cities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Location Choice is one of the most innovative firm in sector. Manager in Location Choice for New Ventures: Choices within Cities Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Location Choice 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 Location Choice for New Ventures: Choices within Cities HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Location Choice for New Ventures: Choices within Cities 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Location Choice for New Ventures: Choices within Cities firm has clearly differentiated products in the market place. This has enabled Location Choice to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Location Choice to invest into research and development (R&D) and innovation.
Analytics focus
– Location Choice 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 William R. Kerr, Alexis Brownell 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.
Cross disciplinary teams
– Horizontal connected teams at the Location Choice 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.
Ability to recruit top talent
– Location Choice is one of the leading recruiters in the industry. Managers in the Location Choice for New Ventures: Choices within Cities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Location Choice digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Location Choice 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.
Weaknesses Location Choice for New Ventures: Choices within Cities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Location Choice for New Ventures: Choices within Cities are -
Increasing silos among functional specialists
– The organizational structure of Location Choice is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Location Choice needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Location Choice to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, William R. Kerr, Alexis Brownell suggests that, Location Choice 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.
Low market penetration in new markets
– Outside its home market of Location Choice, firm in the HBR case study Location Choice for New Ventures: Choices within Cities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Location Choice supply chain. Even after few cautionary changes mentioned in the HBR case study - Location Choice for New Ventures: Choices within Cities, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Location Choice vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Location Choice for New Ventures: Choices within Cities HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Location Choice has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Location Choice for New Ventures: Choices within Cities 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 Location Choice 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Location Choice 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.
Skills based hiring
– The stress on hiring functional specialists at Location Choice 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Location Choice for New Ventures: Choices within Cities, is just above the industry average. Location Choice 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Location Choice 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 decision making process
– As mentioned earlier in the report, Location Choice 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. Location Choice 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.
Opportunities Location Choice for New Ventures: Choices within Cities | 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 Location Choice for New Ventures: Choices within Cities are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Location Choice is facing challenges because of the dominance of functional experts in the organization. Location Choice for New Ventures: Choices within Cities 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Location Choice 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.
Creating value in data economy
– The success of analytics program of Location Choice has opened avenues for new revenue streams for the organization in the industry. This can help Location Choice to build a more holistic ecosystem as suggested in the Location Choice for New Ventures: Choices within Cities case study. Location Choice can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Location Choice 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.
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 Location Choice in the consumer business. Now Location Choice can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Location Choice 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 Location Choice for New Ventures: Choices within Cities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Location Choice to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Location Choice can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Location Choice can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Location Choice for New Ventures: Choices within Cities 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Location Choice 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
– Location Choice 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.
Manufacturing automation
– Location Choice 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.
Better consumer reach
– The expansion of the 5G network will help Location Choice to increase its market reach. Location Choice 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, Location Choice can use these opportunities to build new business models that can help the communities that Location Choice operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Location Choice for New Ventures: Choices within Cities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Location Choice for New Ventures: Choices within Cities are -
Consumer confidence and its impact on Location Choice 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Location Choice 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 Location Choice for New Ventures: Choices within Cities .
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 Location Choice.
Technology acceleration in Forth Industrial Revolution
– Location Choice has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Location Choice 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.
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. Location Choice 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.
High dependence on third party suppliers
– Location Choice 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.
Regulatory challenges
– Location Choice 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.
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. Location Choice can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Location Choice 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.
Shortening product life cycle
– it is one of the major threat that Location Choice is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Location Choice 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
– Location Choice 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.
Weighted SWOT Analysis of Location Choice for New Ventures: Choices within Cities 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 Location Choice for New Ventures: Choices within Cities 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 Location Choice for New Ventures: Choices within Cities 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 Location Choice for New Ventures: Choices within Cities 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 Location Choice for New Ventures: Choices within Cities 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 Location Choice needs to make to build a sustainable competitive advantage.
