Crowdfunding: A Tale of Two Campaigns SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Crowdfunding: A Tale of Two Campaigns
Crowdfunding is considered an alternative to traditional angel and venture capital funding that has helped get many business ventures off the ground. The basic idea of crowdfunding centers on pitching a business idea to a large group of people and seeking financial support. Although crowdfunding has existed for hundreds of years, it has recently gone to online platforms. The most successful platforms to date have been Kickstarter and Indiegogo, which have helped many ventures raise initial funding. This case is concerned with two different startups, one started by a twin sister duo (Marla and Annie) and the other by a Babson College student (Hanson). Enerchi Bites is a startup featuring a new food product that was developed out of a passion for fitness and yoga. Identical twin sisters (Marla and Annie Feldman) started experimenting with different combinations of foods with a chia-seed base. Once they had developed three different flavors, they began distributing their products at various yoga conventions. They quickly built some buzz about their new products and were faced with the problem of scaling their new venture. They decided to try a Kickstarter campaign where they would attempt to raise $10,000. They figured this was the amount they needed to help scale up their operations. After the completion of the Kickstarter campaign, the sisters found the final results disappointing as they netted only about $5,000 after expenses from advertising and the rewards that were due to the campaign backers. Think Board is the creation of a Babson student, Hanson Grant. This business venture was born out of one of Hanson's earlier ideas. He had created white board t-shirts. He found that the t-shirt idea was not going to work and was thinking through how to use this to his advantage until his friends connected the dots for him. If he put pieces of the material together, he ended up with an oversized dry-erase board that could be printed to feature any pattern. With the interest from his friends, Hanson thought that he could use Kickstarter to gauge the market and the opportunity. He planned to raise $10,000, but his intent was more focused on marketing his new product. He successfully raised the money and more important than that, his focused marketing paid off as he was contacted by a news station to give an interview. The publicity made the campaign worthwhile for Hanson.
Authors :: Andrew Zacharakis, Gabriel Quintana, Tommy Ripke
Swot Analysis of "Crowdfunding: A Tale of Two Campaigns" written by Andrew Zacharakis, Gabriel Quintana, Tommy Ripke includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kickstarter Hanson facing as an external strategic factors. Some of the topics covered in Crowdfunding: A Tale of Two Campaigns case study are - Strategic Management Strategies, Marketing, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Crowdfunding: A Tale of Two Campaigns casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, wage bills are increasing, increasing commodity prices, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Crowdfunding: A Tale of Two Campaigns
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Crowdfunding: A Tale of Two Campaigns case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kickstarter Hanson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns can be done for the following purposes –
1. Strategic planning using facts provided in Crowdfunding: A Tale of Two Campaigns case study
2. Improving business portfolio management of Kickstarter Hanson
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 Kickstarter Hanson
Strengths Crowdfunding: A Tale of Two Campaigns | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kickstarter Hanson in Crowdfunding: A Tale of Two Campaigns Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Kickstarter Hanson 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.
High switching costs
– The high switching costs that Kickstarter Hanson has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns - 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
– Kickstarter Hanson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kickstarter Hanson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Kickstarter Hanson 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 Kickstarter Hanson 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 Kickstarter Hanson digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kickstarter Hanson 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.
Learning organization
- Kickstarter Hanson 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 Kickstarter Hanson is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Crowdfunding: A Tale of Two Campaigns Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Kickstarter Hanson is one of the most innovative firm in sector. Manager in Crowdfunding: A Tale of Two Campaigns Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Kickstarter Hanson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kickstarter Hanson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Kickstarter Hanson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Kickstarter Hanson 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 Andrew Zacharakis, Gabriel Quintana, Tommy Ripke 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.
Ability to recruit top talent
– Kickstarter Hanson is one of the leading recruiters in the industry. Managers in the Crowdfunding: A Tale of Two Campaigns are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Crowdfunding: A Tale of Two Campaigns | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Crowdfunding: A Tale of Two Campaigns are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Crowdfunding: A Tale of Two Campaigns 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 Kickstarter Hanson has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Kickstarter Hanson is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Kickstarter Hanson needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kickstarter Hanson to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Kickstarter Hanson 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 strategic competitive environment developments
– As Crowdfunding: A Tale of Two Campaigns HBR case study mentions - Kickstarter Hanson 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.
Lack of clear differentiation of Kickstarter Hanson products
– To increase the profitability and margins on the products, Kickstarter Hanson needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kickstarter Hanson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Crowdfunding: A Tale of Two Campaigns 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 Kickstarter Hanson supply chain. Even after few cautionary changes mentioned in the HBR case study - Crowdfunding: A Tale of Two Campaigns, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kickstarter Hanson vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Kickstarter Hanson 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Crowdfunding: A Tale of Two Campaigns, it seems that the employees of Kickstarter Hanson 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.
Capital Spending Reduction
– Even during the low interest decade, Kickstarter Hanson has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Crowdfunding: A Tale of Two Campaigns, 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.
Opportunities Crowdfunding: A Tale of Two Campaigns | 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 Crowdfunding: A Tale of Two Campaigns are -
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 Kickstarter Hanson 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.
Learning at scale
– Online learning technologies has now opened space for Kickstarter Hanson 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.
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. Kickstarter Hanson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Kickstarter Hanson 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.
Creating value in data economy
– The success of analytics program of Kickstarter Hanson has opened avenues for new revenue streams for the organization in the industry. This can help Kickstarter Hanson to build a more holistic ecosystem as suggested in the Crowdfunding: A Tale of Two Campaigns case study. Kickstarter Hanson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Kickstarter Hanson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Crowdfunding: A Tale of Two Campaigns 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.
Leveraging digital technologies
– Kickstarter Hanson 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kickstarter Hanson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Kickstarter Hanson 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. Kickstarter Hanson 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kickstarter Hanson 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kickstarter Hanson 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 Kickstarter Hanson 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, Kickstarter Hanson 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, Crowdfunding: A Tale of Two Campaigns, 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 Kickstarter Hanson in the consumer business. Now Kickstarter Hanson can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Crowdfunding: A Tale of Two Campaigns External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Crowdfunding: A Tale of Two Campaigns are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kickstarter Hanson 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.
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. Kickstarter Hanson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Kickstarter Hanson 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns .
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 Kickstarter Hanson.
Technology acceleration in Forth Industrial Revolution
– Kickstarter Hanson has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Kickstarter Hanson 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 Kickstarter Hanson is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Crowdfunding: A Tale of Two Campaigns, Kickstarter Hanson may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kickstarter Hanson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Kickstarter Hanson 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. Kickstarter Hanson can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Stagnating economy with rate increase
– Kickstarter Hanson 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.
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. Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns 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 Crowdfunding: A Tale of Two Campaigns 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 Crowdfunding: A Tale of Two Campaigns 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 Crowdfunding: A Tale of Two Campaigns 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 Crowdfunding: A Tale of Two Campaigns 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 Kickstarter Hanson needs to make to build a sustainable competitive advantage.