Impact America Fund: Challenges of New Fund Formation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Impact America Fund: Challenges of New Fund Formation
In July 2013, Kesha Cash transitioned out of her stable role as co-founder of and fund manager for Jalia Ventures ("Jalia"), an initiative investing in early-stage mission driven "businesses operated by entrepreneurs of color," to launch her own impact venture fund focused on underserved communities. Because Jalia had been funded and supported by Serious Change, L.P., a global impact investment fund, Cash was new to the process of fund formation. She had heard that she needed at least $250,000 over a period of two years to get through the fundraising process but managed to launch the fund with a budget of just over a third of that amount in under two years while taking barely any salary. By December 2014, Impact America Fund (IAF) had its first official close at less than 50 percent of the target fund size-a strategic decision made by Cash to begin investing in order to prove that she could source and close deals on her own. With her initial close, Cash's vision of creating a fund focused on generating real financial returns while improving the wellbeing of underserved communities was realized. Despite her success in bootstrapping the initial fund, Cash had much more work ahead of her. In addition to managing investors and sourcing new deal opportunities, Cash now had to consider how to scale for later funds, and whether to continue to follow the fund's original vision on her own, as she had already proven that she could do, or take on a partner in order to pursue strategic opportunities. Indeed, the real work was just beginning. 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; an overview of the fund's structure and terms, investment strategy, early fundraising, and strategic opportunities; as well as a discussion of impact measurement.
Authors :: Heidi Krauel Patel, Charles Ewald, Jaclyn C. Foroughi
Swot Analysis of "Impact America Fund: Challenges of New Fund Formation" written by Heidi Krauel Patel, Charles Ewald, Jaclyn C. Foroughi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fund Jalia facing as an external strategic factors. Some of the topics covered in Impact America Fund: Challenges of New Fund Formation case study are - Strategic Management Strategies, Venture capital and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Impact America Fund: Challenges of New Fund Formation casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, increasing energy prices, etc
Introduction to SWOT Analysis of Impact America Fund: Challenges of New Fund Formation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Impact America Fund: Challenges of New Fund Formation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fund Jalia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fund Jalia 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 Impact America Fund: Challenges of New Fund Formation can be done for the following purposes –
1. Strategic planning using facts provided in Impact America Fund: Challenges of New Fund Formation case study
2. Improving business portfolio management of Fund Jalia
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 Fund Jalia
Strengths Impact America Fund: Challenges of New Fund Formation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fund Jalia in Impact America Fund: Challenges of New Fund Formation Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Fund Jalia in the sector have low bargaining power. Impact America Fund: Challenges of New Fund Formation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fund Jalia to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Fund Jalia 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 Impact America Fund: Challenges of New Fund Formation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Fund Jalia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fund Jalia 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.
Learning organization
- Fund Jalia 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 Fund Jalia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Impact America Fund: Challenges of New Fund Formation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Fund Jalia 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.
Innovation driven organization
– Fund Jalia is one of the most innovative firm in sector. Manager in Impact America Fund: Challenges of New Fund Formation 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 Leadership & Managing People field
– Fund Jalia 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 Fund Jalia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Fund Jalia 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 Heidi Krauel Patel, Charles Ewald, Jaclyn C. Foroughi 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.
Successful track record of launching new products
– Fund Jalia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fund Jalia 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.
Strong track record of project management
– Fund Jalia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Fund Jalia is present in almost all the verticals within the industry. This has provided firm in Impact America Fund: Challenges of New Fund Formation 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.
Organizational Resilience of Fund Jalia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fund Jalia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Impact America Fund: Challenges of New Fund Formation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Impact America Fund: Challenges of New Fund Formation are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Impact America Fund: Challenges of New Fund Formation, in the dynamic environment Fund Jalia has struggled to respond to the nimble upstart competition. Fund Jalia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Impact America Fund: Challenges of New Fund Formation HBR case study mentions - Fund Jalia 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.
Slow decision making process
– As mentioned earlier in the report, Fund Jalia 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. Fund Jalia 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.
Products dominated business model
– Even though Fund Jalia 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 - Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation 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 Fund Jalia has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fund Jalia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Impact America Fund: Challenges of New Fund Formation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Fund Jalia 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.
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 Fund Jalia supply chain. Even after few cautionary changes mentioned in the HBR case study - Impact America Fund: Challenges of New Fund Formation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fund Jalia vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation can leverage the sales team experience to cultivate customer relationships as Fund Jalia is planning to shift buying processes online.
Interest costs
– Compare to the competition, Fund Jalia 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.
Lack of clear differentiation of Fund Jalia products
– To increase the profitability and margins on the products, Fund Jalia needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Impact America Fund: Challenges of New Fund Formation | 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 Impact America Fund: Challenges of New Fund Formation are -
Building a culture of innovation
– managers at Fund Jalia 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.
Learning at scale
– Online learning technologies has now opened space for Fund Jalia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fund Jalia is facing challenges because of the dominance of functional experts in the organization. Impact America Fund: Challenges of New Fund Formation 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fund Jalia 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, Impact America Fund: Challenges of New Fund Formation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Fund Jalia 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, Fund Jalia can use these opportunities to build new business models that can help the communities that Fund Jalia operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Fund Jalia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fund Jalia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Fund Jalia 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.
Creating value in data economy
– The success of analytics program of Fund Jalia has opened avenues for new revenue streams for the organization in the industry. This can help Fund Jalia to build a more holistic ecosystem as suggested in the Impact America Fund: Challenges of New Fund Formation case study. Fund Jalia can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fund Jalia 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.
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 Fund Jalia in the consumer business. Now Fund Jalia can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Fund Jalia 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 Impact America Fund: Challenges of New Fund Formation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fund Jalia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Impact America Fund: Challenges of New Fund Formation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Impact America Fund: Challenges of New Fund Formation are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Fund Jalia in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Fund Jalia 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fund Jalia 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Impact America Fund: Challenges of New Fund Formation, Fund Jalia 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fund Jalia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Fund Jalia 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.
Increasing wage structure of Fund Jalia
– 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 Fund Jalia.
Technology acceleration in Forth Industrial Revolution
– Fund Jalia has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Fund Jalia 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.
Environmental challenges
– Fund Jalia 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. Fund Jalia can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Fund Jalia 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.
High dependence on third party suppliers
– Fund Jalia 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.
Stagnating economy with rate increase
– Fund Jalia 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.
Weighted SWOT Analysis of Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation 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 Impact America Fund: Challenges of New Fund Formation 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 Fund Jalia needs to make to build a sustainable competitive advantage.
