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 - – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing household debt because of falling income levels, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, 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 -
Highly skilled collaborators
– Vaca La 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 La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Vaca La has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vaca La to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? firm has clearly differentiated products in the market place. This has enabled Vaca La to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Vaca La to invest into research and development (R&D) and innovation.
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.
Strong track record of project management
– Vaca La is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Ability to recruit top talent
– Vaca La is one of the leading recruiters in the industry. Managers in the La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? 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 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.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of Vaca La is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Vaca La needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vaca La to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Vaca La 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.
Low market penetration in new markets
– Outside its home market of Vaca La, firm in the HBR case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Products dominated business model
– Even though Vaca La 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 - La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model? should strive to include more intangible value offerings along with its core products and services.
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.
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 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, it seems that the employees of Vaca La 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, Chris Laszlo, Anya Briggs suggests that, Vaca La 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.
Slow decision making process
– As mentioned earlier in the report, Vaca La has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Vaca La even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vaca La can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vaca La in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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.
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 Vaca La 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.
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.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vaca La can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 -
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.
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.
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.
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? .
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.
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.
Consumer confidence and its impact on Vaca La 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. 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study La Vaca Independiente: Should a Social Enterprise Adopt a For-Profit Business Model?, Vaca La may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Environmental challenges
– Vaca La 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. Vaca La can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
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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