Location Choice for New Ventures: 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: Cities
Location choice is a critical decision for entrepreneurs. This note explores how entrepreneurs should think about different city options through a systematic framework that encompasses professional and personal issues. We use the intellectual frameworks of the cluster and industry agglomeration literatures to organize these factors. We then provide some tactical advice and worksheets for entrepreneurs to consider when selecting the location for their new venture.
Swot Analysis of "Location Choice for New Ventures: Cities" written by William R. Kerr, Ramana Nanda includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Location Entrepreneurs facing as an external strategic factors. Some of the topics covered in Location Choice for New Ventures: Cities case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Operations management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Location Choice for New Ventures: Cities casestudy better are - – technology disruption, increasing commodity prices, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, there is backlash against globalization, geopolitical disruptions,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Location Choice for New Ventures: 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: Cities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Location Entrepreneurs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Location Entrepreneurs 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: Cities can be done for the following purposes –
1. Strategic planning using facts provided in Location Choice for New Ventures: Cities case study
2. Improving business portfolio management of Location Entrepreneurs
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 Entrepreneurs
Strengths Location Choice for New Ventures: Cities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Location Entrepreneurs in Location Choice for New Ventures: Cities Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Location Entrepreneurs in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Location Choice for New Ventures: Cities firm has clearly differentiated products in the market place. This has enabled Location Entrepreneurs to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Location Entrepreneurs to invest into research and development (R&D) and innovation.
High brand equity
– Location Entrepreneurs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Location Entrepreneurs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Location Entrepreneurs is present in almost all the verticals within the industry. This has provided firm in Location Choice for New Ventures: Cities 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.
Analytics focus
– Location Entrepreneurs 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, Ramana Nanda 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.
Successful track record of launching new products
– Location Entrepreneurs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Location Entrepreneurs 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.
Strong track record of project management
– Location Entrepreneurs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Location Entrepreneurs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Location Choice for New Ventures: Cities 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.
Innovation driven organization
– Location Entrepreneurs is one of the most innovative firm in sector. Manager in Location Choice for New Ventures: Cities Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Location Entrepreneurs in the sector have low bargaining power. Location Choice for New Ventures: Cities has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Location Entrepreneurs to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Location Entrepreneurs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Location Entrepreneurs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Location Entrepreneurs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Location Entrepreneurs 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: Cities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Location Choice for New Ventures: Cities are -
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 Entrepreneurs supply chain. Even after few cautionary changes mentioned in the HBR case study - Location Choice for New Ventures: 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 Entrepreneurs vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Location Entrepreneurs 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: Cities, is just above the industry average. Location Entrepreneurs 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.
No frontier risks strategy
– After analyzing the HBR case study Location Choice for New Ventures: Cities, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Location Choice for New Ventures: Cities, in the dynamic environment Location Entrepreneurs has struggled to respond to the nimble upstart competition. Location Entrepreneurs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Location Entrepreneurs has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Location Entrepreneurs 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 Entrepreneurs 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Location Choice for New Ventures: 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 Entrepreneurs has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Location Entrepreneurs, firm in the HBR case study Location Choice for New Ventures: Cities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Location Choice for New Ventures: Cities HBR case study mentions - Location Entrepreneurs 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.
Products dominated business model
– Even though Location Entrepreneurs 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 - Location Choice for New Ventures: Cities should strive to include more intangible value offerings along with its core products and services.
Opportunities Location Choice for New Ventures: 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: Cities are -
Buying journey improvements
– Location Entrepreneurs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Location Choice for New Ventures: 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.
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 Entrepreneurs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Location Entrepreneurs to increase its market reach. Location Entrepreneurs 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.
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 Entrepreneurs in the consumer business. Now Location Entrepreneurs can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Location Entrepreneurs 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.
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 Entrepreneurs can use these opportunities to build new business models that can help the communities that Location Entrepreneurs operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Location Entrepreneurs 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.
Using analytics as competitive advantage
– Location Entrepreneurs 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: Cities - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Location Entrepreneurs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Location Entrepreneurs 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.
Learning at scale
– Online learning technologies has now opened space for Location Entrepreneurs 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.
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. Location Entrepreneurs 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. Location Entrepreneurs 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Location Entrepreneurs 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.
Developing new processes and practices
– Location Entrepreneurs 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.
Threats Location Choice for New Ventures: 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: Cities are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Location Entrepreneurs 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.
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. Location Entrepreneurs needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Location Entrepreneurs is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Location Entrepreneurs 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.
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 Entrepreneurs.
Stagnating economy with rate increase
– Location Entrepreneurs 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.
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.
Regulatory challenges
– Location Entrepreneurs 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.
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 Location Entrepreneurs business can come under increasing regulations regarding data privacy, data security, 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. Location Entrepreneurs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Location Entrepreneurs in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Environmental challenges
– Location Entrepreneurs 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. Location Entrepreneurs can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Location Entrepreneurs 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.
Weighted SWOT Analysis of Location Choice for New Ventures: 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: 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: 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: 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: 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 Entrepreneurs needs to make to build a sustainable competitive advantage.
