Case Study Description of Reach Capital: Performance in Education Technology
In January 2015, Jennifer Carolan, who had served as the managing director of the NewSchools Venture Fund Seed Fund ("Seed Fund"), spun off from the nonprofit venture philanthropy firm to create a for-profit social impact fund focused on education technology (edtech). Through a unique joint venture with NewSchools Venture Fund ("NewSchools") called NewSchools Capital, the new venture fund, Reach Capital, would allow Carolan to not only raise more funds and scale more effectively than it otherwise could have as a nonprofit, but also support portfolio companies as they matured. Having invested $9 million across 39 for-profit and 4 nonprofit companies for the Seed Fund, and with the support of such renowned anchor donors as the Michael & Susan Dell Foundation, the Bill & Melinda Gates Foundation, and the Sobrato Foundation, Carolan felt confident in Reach's ability to invest successfully in scalable, high-growth edtech companies that prioritized social impact. Still, Carolan was challenged with executing an efficacious spin off, establishing a compelling philanthropic value proposition, and finding a way to effectively measure performance focused on the double bottom line. This case describes the challenges faced in the formation of a sustainable for-profit impact venture capital fund. It covers the origin of the fund, a background of the education technology industry, fund terms, as well as a discussion of performance measurement.
Swot Analysis of "Reach Capital: Performance in Education Technology" written by Maureen McNichols, Jaclyn C. Foroughi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carolan Fund facing as an external strategic factors. Some of the topics covered in Reach Capital: Performance in Education Technology case study are - Strategic Management Strategies, Social responsibility, Venture capital and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Reach Capital: Performance in Education Technology casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, talent flight as more people leaving formal jobs, wage bills are increasing, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of Reach Capital: Performance in Education Technology
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reach Capital: Performance in Education Technology case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carolan Fund, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carolan Fund 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 Reach Capital: Performance in Education Technology can be done for the following purposes –
1. Strategic planning using facts provided in Reach Capital: Performance in Education Technology case study
2. Improving business portfolio management of Carolan Fund
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 Carolan Fund
Strengths Reach Capital: Performance in Education Technology | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carolan Fund in Reach Capital: Performance in Education Technology Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Carolan Fund in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Carolan Fund has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carolan Fund 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.
Highly skilled collaborators
– Carolan Fund 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 Reach Capital: Performance in Education Technology HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Carolan Fund digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Carolan Fund 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.
High switching costs
– The high switching costs that Carolan Fund 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.
Training and development
– Carolan Fund has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reach Capital: Performance in Education Technology 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.
Operational resilience
– The operational resilience strategy in the Reach Capital: Performance in Education Technology 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Reach Capital: Performance in Education Technology firm has clearly differentiated products in the market place. This has enabled Carolan Fund to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Carolan Fund to invest into research and development (R&D) and innovation.
Learning organization
- Carolan Fund 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 Carolan Fund is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reach Capital: Performance in Education Technology Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Carolan Fund is one of the most innovative firm in sector. Manager in Reach Capital: Performance in Education Technology Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Carolan Fund in the sector have low bargaining power. Reach Capital: Performance in Education Technology has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Carolan Fund to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Leadership & Managing People field
– Carolan Fund 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 Carolan Fund in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Reach Capital: Performance in Education Technology | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reach Capital: Performance in Education Technology are -
Workers concerns about automation
– As automation is fast increasing in the segment, Carolan Fund 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.
Capital Spending Reduction
– Even during the low interest decade, Carolan Fund 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.
Need for greater diversity
– Carolan Fund 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.
Slow to strategic competitive environment developments
– As Reach Capital: Performance in Education Technology HBR case study mentions - Carolan Fund 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.
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 Carolan Fund supply chain. Even after few cautionary changes mentioned in the HBR case study - Reach Capital: Performance in Education Technology, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Carolan Fund vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Carolan Fund 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 - Reach Capital: Performance in Education Technology should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reach Capital: Performance in Education Technology HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Carolan Fund has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Carolan Fund 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.
Slow decision making process
– As mentioned earlier in the report, Carolan Fund 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. Carolan Fund 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carolan Fund is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reach Capital: Performance in Education Technology can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Carolan Fund 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.
Opportunities Reach Capital: Performance in Education Technology | 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 Reach Capital: Performance in Education Technology are -
Manufacturing automation
– Carolan Fund can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Carolan Fund 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, Reach Capital: Performance in Education Technology, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Carolan Fund can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carolan Fund can use these opportunities to build new business models that can help the communities that Carolan Fund operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Carolan Fund 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.
Buying journey improvements
– Carolan Fund can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reach Capital: Performance in Education Technology 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.
Building a culture of innovation
– managers at Carolan Fund 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Carolan Fund 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.
Developing new processes and practices
– Carolan Fund 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
– Carolan Fund 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 Reach Capital: Performance in Education Technology - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carolan Fund to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Carolan Fund has opened avenues for new revenue streams for the organization in the industry. This can help Carolan Fund to build a more holistic ecosystem as suggested in the Reach Capital: Performance in Education Technology case study. Carolan Fund can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Carolan Fund 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.
Learning at scale
– Online learning technologies has now opened space for Carolan Fund 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.
Threats Reach Capital: Performance in Education Technology External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reach Capital: Performance in Education Technology are -
Shortening product life cycle
– it is one of the major threat that Carolan Fund is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Carolan Fund with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Carolan Fund 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 Reach Capital: Performance in Education Technology .
Regulatory challenges
– Carolan Fund 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.
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 Carolan Fund business can come under increasing regulations regarding data privacy, data security, etc.
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. Carolan Fund can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Carolan Fund 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. Carolan Fund can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Carolan Fund.
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. Carolan Fund 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 Reach Capital: Performance in Education Technology, Carolan Fund 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 .
Increasing wage structure of Carolan Fund
– 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 Carolan Fund.
High dependence on third party suppliers
– Carolan Fund 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.
Weighted SWOT Analysis of Reach Capital: Performance in Education Technology 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 Reach Capital: Performance in Education Technology 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 Reach Capital: Performance in Education Technology 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 Reach Capital: Performance in Education Technology 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 Reach Capital: Performance in Education Technology 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 Carolan Fund needs to make to build a sustainable competitive advantage.