Tim Trowac and Dave Rahall, two former investment bankers, skillfully execute the leveraged buyout of a golf ball recycling company after working intensely on their due diligence, writing a business and financial plan, and developing the investment memorandum. Six months later, they question the competency of their management team, which they had assembled from former Explo employees rather than conduct extensive searches. Now financial results are poor. Trowac and Rahall need to explain the poor performance and come up with an action plan for their investors.
Swot Analysis of "Explo Leisure Products" written by Richard G. Hamermesh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Explo Rahall facing as an external strategic factors. Some of the topics covered in Explo Leisure Products case study are - Strategic Management Strategies, Corporate communications, Disruptive innovation, Entrepreneurial management, Financial management, Government, Human resource management, Leading teams, Mergers & acquisitions, Social responsibility, Strategy execution, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Explo Leisure Products casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, technology disruption, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion,
there is backlash against globalization, geopolitical disruptions, etc
Introduction to SWOT Analysis of Explo Leisure Products
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Explo Leisure Products case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Explo Rahall, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Explo Rahall 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 Explo Leisure Products can be done for the following purposes –
1. Strategic planning using facts provided in Explo Leisure Products case study
2. Improving business portfolio management of Explo Rahall
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 Explo Rahall
Strengths Explo Leisure Products | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Explo Rahall in Explo Leisure Products Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Explo Leisure Products firm has clearly differentiated products in the market place. This has enabled Explo Rahall to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Explo Rahall to invest into research and development (R&D) and innovation.
High brand equity
– Explo Rahall has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Explo Rahall to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Explo Rahall in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Explo Rahall has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Explo Leisure Products 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.
Strong track record of project management
– Explo Rahall 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 Explo Rahall
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Explo Rahall does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Explo Rahall 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.
Operational resilience
– The operational resilience strategy in the Explo Leisure Products 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 Explo Rahall in the sector have low bargaining power. Explo Leisure Products has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Explo Rahall to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Explo Rahall is one of the leading recruiters in the industry. Managers in the Explo Leisure Products are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Explo Rahall 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 Richard G. Hamermesh 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.
Learning organization
- Explo Rahall 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 Explo Rahall is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Explo Leisure Products Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Explo Leisure Products | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Explo Leisure Products are -
Slow decision making process
– As mentioned earlier in the report, Explo Rahall 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. Explo Rahall 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.
Need for greater diversity
– Explo Rahall 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.
Increasing silos among functional specialists
– The organizational structure of Explo Rahall is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Explo Rahall needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Explo Rahall to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Explo Rahall 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 - Explo Leisure Products should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Explo Rahall 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, Explo Rahall 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.
Aligning sales with marketing
– It come across in the case study Explo Leisure Products 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 Explo Leisure Products can leverage the sales team experience to cultivate customer relationships as Explo Rahall is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Explo Leisure Products 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 Explo Rahall 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Explo Leisure Products, it seems that the employees of Explo Rahall 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Explo Leisure Products, is just above the industry average. Explo Rahall 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Explo Rahall is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Explo Leisure Products can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Explo Leisure Products | 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 Explo Leisure Products are -
Better consumer reach
– The expansion of the 5G network will help Explo Rahall to increase its market reach. Explo Rahall 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.
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. Explo Rahall 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. Explo Rahall 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Explo Rahall can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Explo Rahall 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 Explo Leisure Products - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Explo Rahall to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Explo Rahall is facing challenges because of the dominance of functional experts in the organization. Explo Leisure Products 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.
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 Explo Rahall 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Explo Rahall can use these opportunities to build new business models that can help the communities that Explo Rahall operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Explo Rahall 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.
Creating value in data economy
– The success of analytics program of Explo Rahall has opened avenues for new revenue streams for the organization in the industry. This can help Explo Rahall to build a more holistic ecosystem as suggested in the Explo Leisure Products case study. Explo Rahall can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Explo Rahall 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.
Buying journey improvements
– Explo Rahall can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Explo Leisure Products 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.
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 Explo Rahall in the consumer business. Now Explo Rahall can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Explo Rahall 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 Explo Leisure Products External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Explo Leisure Products are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Explo Rahall 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 Explo Leisure Products .
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 Explo Rahall business can come under increasing regulations regarding data privacy, data security, etc.
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 Explo Rahall.
Environmental challenges
– Explo Rahall 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. Explo Rahall can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Explo Rahall 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.
Regulatory challenges
– Explo Rahall 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 Explo Rahall
– 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 Explo Rahall.
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.
Stagnating economy with rate increase
– Explo Rahall 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.
High dependence on third party suppliers
– Explo Rahall 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Explo Leisure Products, Explo Rahall 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 .
Technology acceleration in Forth Industrial Revolution
– Explo Rahall has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Explo Rahall 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.
Weighted SWOT Analysis of Explo Leisure Products 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 Explo Leisure Products 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 Explo Leisure Products 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 Explo Leisure Products 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 Explo Leisure Products 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 Explo Rahall needs to make to build a sustainable competitive advantage.
