La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?
This case presents a social enterprise considering whether a for-profit model might be an effective way to scale its impact. Mexico City-based La Vaca Independiente (The Independent Cow) was founded to bring art to underprivileged children. The founder observed that many global problems are caused by humanity's increasing state of isolation, with individuals disconnected from the planet and from each other. She concluded that most benefit corporations address outcomes of isolationism, but that La Vaca could target the matter directly. La Vaca focused exclusively on a program called Developing Intelligence through Art (DIA). Using artwork as a stimulus for thought and discussion, DIA provided individuals with opportunities to develop meaning in their lives. She believed, based on evidence that companies lose annual revenue due to the effects of isolationism on their employees, that she and her team could pursue a for-profit business model in order to expose La Vaca to markets and opportunities inaccessible to a charitable organization.
Swot Analysis of "La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?" written by Chris Laszlo, Anya Briggs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vaca La facing as an external strategic factors. Some of the topics covered in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? case study are - Strategic Management Strategies, Organizational structure and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? casestudy better are - – there is backlash against globalization, increasing energy prices, central banks are concerned over increasing inflation, increasing commodity prices, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, etc
Introduction to SWOT Analysis of La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vaca La, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vaca La 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? can be done for the following purposes –
1. Strategic planning using facts provided in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? case study
2. Improving business portfolio management of Vaca La
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vaca La
Strengths La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vaca La in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Vaca La 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.
Superior customer experience
– The customer experience strategy of Vaca La in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Vaca La is one of the most innovative firm in sector. Manager in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Vaca La has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vaca La 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.
Low bargaining power of suppliers
– Suppliers of Vaca La in the sector have low bargaining power. La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vaca La to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Vaca La 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)
– Vaca La 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Vaca La is present in almost all the verticals within the industry. This has provided firm in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Vaca La digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vaca La 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.
Operational resilience
– The operational resilience strategy in the La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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.
Learning organization
- Vaca La 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 Vaca La is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Vaca La
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vaca La does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vaca La is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Vaca La products
– To increase the profitability and margins on the products, Vaca La needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? HBR case study mentions - Vaca La 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.
Capital Spending Reduction
– Even during the low interest decade, Vaca La 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, is just above the industry average. Vaca La 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.
High cash cycle compare to competitors
Vaca La 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.
Interest costs
– Compare to the competition, Vaca La 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.
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 Vaca La supply chain. Even after few cautionary changes mentioned in the HBR case study - La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vaca La vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, in the dynamic environment Vaca La has struggled to respond to the nimble upstart competition. Vaca La has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 Vaca La 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Vaca La 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.
Opportunities La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? | 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? are -
Loyalty marketing
– Vaca La 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.
Better consumer reach
– The expansion of the 5G network will help Vaca La to increase its market reach. Vaca La 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vaca La 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, La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vaca La 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 Vaca La to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Vaca La has opened avenues for new revenue streams for the organization in the industry. This can help Vaca La to build a more holistic ecosystem as suggested in the La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? case study. Vaca La can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Vaca La can use these opportunities to build new business models that can help the communities that Vaca La operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Vaca La 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.
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. Vaca La can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Vaca La 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.
Developing new processes and practices
– Vaca La can develop new processes and procedures in Leadership & Managing People 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.
Using analytics as competitive advantage
– Vaca La 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vaca La to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vaca La 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. Vaca La 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.
Buying journey improvements
– Vaca La can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vaca La 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? .
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. Vaca La needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vaca La can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Vaca La 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.
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 Vaca La.
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. Vaca La will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Vaca La 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.
Shortening product life cycle
– it is one of the major threat that Vaca La is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Vaca La has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Vaca La needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Regulatory challenges
– Vaca La 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 Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vaca La with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vaca La in the Leadership & Managing People industry. The Leadership & Managing People 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 Vaca La needs to make to build a sustainable competitive advantage.
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