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 - – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing energy prices,
increasing commodity prices, central banks are concerned over increasing inflation, 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 -
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.
Successful track record of launching new products
– Kickstarter Hanson has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kickstarter Hanson 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.
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.
Highly skilled collaborators
– Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Kickstarter Hanson in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Kickstarter Hanson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Crowdfunding: A Tale of Two Campaigns 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.
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.
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.
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.
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.
Diverse revenue streams
– Kickstarter Hanson is present in almost all the verticals within the industry. This has provided firm in Crowdfunding: A Tale of Two Campaigns 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Crowdfunding: A Tale of Two Campaigns firm has clearly differentiated products in the market place. This has enabled Kickstarter Hanson to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Kickstarter Hanson to invest into research and development (R&D) and innovation.
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 -
Products dominated business model
– Even though Kickstarter Hanson 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 - Crowdfunding: A Tale of Two Campaigns 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 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrew Zacharakis, Gabriel Quintana, Tommy Ripke suggests that, Kickstarter Hanson 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Crowdfunding: A Tale of Two Campaigns, in the dynamic environment Kickstarter Hanson has struggled to respond to the nimble upstart competition. Kickstarter Hanson has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Skills based hiring
– The stress on hiring functional specialists at Kickstarter Hanson 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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kickstarter Hanson can use these opportunities to build new business models that can help the communities that Kickstarter Hanson operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Kickstarter Hanson 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kickstarter Hanson is facing challenges because of the dominance of functional experts in the organization. Crowdfunding: A Tale of Two Campaigns 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.
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.
Using analytics as competitive advantage
– Kickstarter Hanson 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 Crowdfunding: A Tale of Two Campaigns - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kickstarter Hanson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Kickstarter Hanson 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.
Building a culture of innovation
– managers at Kickstarter Hanson 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.
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. Kickstarter Hanson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 -
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.
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.
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.
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.
Consumer confidence and its impact on Kickstarter Hanson 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. 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.
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.
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 Kickstarter Hanson business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 .
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.
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 .
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.
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.
