Circles: Lifecycle of a New Venture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Circles: Lifecycle of a New Venture
In the tenth year of their business, Circles' co-founders, Janet Kraus and Kathy Sherbrooke, had completed a successful exit for their company. They had worked closely for years, building their early venture into a leading provider of concierge services with over $40 million in annual revenues. In preparing the company for exit, the two not only had to package the business for sale, but also prepare themselves for the next phases of their careers. Sherbrooke would move on to a corporate role with the acquirer, Sodexho, as the CEO of Circles, and Kraus would take on leading an early stage company, Spire, a Circles spinoff. The transition would not be just one for the company, but also one for their relationship as co-founders and true business partners.
Authors :: Garth Saloner, Jim Ellis, Amanda Silverman
Swot Analysis of "Circles: Lifecycle of a New Venture" written by Garth Saloner, Jim Ellis, Amanda Silverman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Circles Kraus facing as an external strategic factors. Some of the topics covered in Circles: Lifecycle of a New Venture case study are - Strategic Management Strategies, Entrepreneurship, Mergers & acquisitions, Professional transitions, Succession planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Circles: Lifecycle of a New Venture casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, etc
Introduction to SWOT Analysis of Circles: Lifecycle of a New Venture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Circles: Lifecycle of a New Venture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Circles Kraus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Circles Kraus 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 Circles: Lifecycle of a New Venture can be done for the following purposes –
1. Strategic planning using facts provided in Circles: Lifecycle of a New Venture case study
2. Improving business portfolio management of Circles Kraus
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 Circles Kraus
Strengths Circles: Lifecycle of a New Venture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Circles Kraus in Circles: Lifecycle of a New Venture Harvard Business Review case study are -
High brand equity
– Circles Kraus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Circles Kraus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Circles Kraus is one of the leading recruiters in the industry. Managers in the Circles: Lifecycle of a New Venture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Circles: Lifecycle of a New Venture 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.
Strong track record of project management
– Circles Kraus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Circles Kraus is one of the most innovative firm in sector. Manager in Circles: Lifecycle of a New Venture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Innovation & Entrepreneurship field
– Circles Kraus 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 Circles Kraus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Circles Kraus 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 Garth Saloner, Jim Ellis, Amanda Silverman 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.
Training and development
– Circles Kraus has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Circles: Lifecycle of a New Venture 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.
Superior customer experience
– The customer experience strategy of Circles Kraus in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Circles Kraus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Circles Kraus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Circles Kraus 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.
Effective Research and Development (R&D)
– Circles Kraus 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 Circles: Lifecycle of a New Venture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Circles: Lifecycle of a New Venture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Circles: Lifecycle of a New Venture are -
Capital Spending Reduction
– Even during the low interest decade, Circles Kraus has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Garth Saloner, Jim Ellis, Amanda Silverman suggests that, Circles Kraus 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 Circles Kraus, firm in the HBR case study Circles: Lifecycle of a New Venture needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Circles Kraus 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.
Aligning sales with marketing
– It come across in the case study Circles: Lifecycle of a New Venture that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Circles: Lifecycle of a New Venture can leverage the sales team experience to cultivate customer relationships as Circles Kraus is planning to shift buying processes online.
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 Circles Kraus supply chain. Even after few cautionary changes mentioned in the HBR case study - Circles: Lifecycle of a New Venture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Circles Kraus vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Circles Kraus 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 - Circles: Lifecycle of a New Venture should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Circles: Lifecycle of a New Venture 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 Circles Kraus 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Circles: Lifecycle of a New Venture, is just above the industry average. Circles Kraus 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 Circles: Lifecycle of a New Venture, 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.
Interest costs
– Compare to the competition, Circles Kraus has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Circles: Lifecycle of a New Venture | 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 Circles: Lifecycle of a New Venture are -
Using analytics as competitive advantage
– Circles Kraus 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 Circles: Lifecycle of a New Venture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Circles Kraus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Circles Kraus 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, Circles: Lifecycle of a New Venture, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Circles Kraus can use these opportunities to build new business models that can help the communities that Circles Kraus operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Circles Kraus 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 Circles Kraus to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Circles Kraus 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Circles Kraus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Circles Kraus in the consumer business. Now Circles Kraus can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Circles Kraus is facing challenges because of the dominance of functional experts in the organization. Circles: Lifecycle of a New Venture 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.
Creating value in data economy
– The success of analytics program of Circles Kraus has opened avenues for new revenue streams for the organization in the industry. This can help Circles Kraus to build a more holistic ecosystem as suggested in the Circles: Lifecycle of a New Venture case study. Circles Kraus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Circles Kraus 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.
Developing new processes and practices
– Circles Kraus 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.
Better consumer reach
– The expansion of the 5G network will help Circles Kraus to increase its market reach. Circles Kraus 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.
Buying journey improvements
– Circles Kraus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Circles: Lifecycle of a New Venture 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 Circles: Lifecycle of a New Venture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Circles: Lifecycle of a New Venture are -
Stagnating economy with rate increase
– Circles Kraus 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.
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 Circles Kraus in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Circles Kraus is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Circles Kraus 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 Circles: Lifecycle of a New Venture .
Environmental challenges
– Circles Kraus 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. Circles Kraus can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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. Circles Kraus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Circles: Lifecycle of a New Venture, Circles Kraus 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 .
Increasing wage structure of Circles Kraus
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Circles Kraus.
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 Circles Kraus business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Circles Kraus needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 Circles Kraus.
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.
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. Circles Kraus 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 Circles: Lifecycle of a New Venture 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 Circles: Lifecycle of a New Venture 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 Circles: Lifecycle of a New Venture 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 Circles: Lifecycle of a New Venture 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 Circles: Lifecycle of a New Venture 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 Circles Kraus needs to make to build a sustainable competitive advantage.