Reverend Musical Instruments: Playing a Different Tune (C) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reverend Musical Instruments: Playing a Different Tune (C)
The electric guitar market is both enticing and daunting for a small company - a multi-billion $US sector that has grown almost constantly since the 1960s, but where competition is based as much on image as on substance. The market is naturally fragmented (similar to the market for many musical instruments), yet dominant players make entry and sustenance difficult. While Asian producers or branded imports dominate the low and mid-priced market, collectors and serious players seek high-end branded or handmade instruments that can be resold with only minor loss, if any. To augment collector value, high-end guitar manufacturers constantly modify components, making short-run series with unique features (often specified by "name" musicians and sold under their signature). For established brands, vintage instruments, and handmade instruments, used guitars may sell for their original purchase price or surprising multiples thereof; the value of some pieces increases after only ten years. From this standpoint, experienced buyers can make essentially risk-free purchases. The case tells the story of Joe Naylor, the owner-manager of Reverend Guitars, a small company that made a startling impact on the electric guitar market with a clever use of innovative products, innovative marketing and innovative use of the internet to a) leverage an existing community and b) build a new one.
Swot Analysis of "Reverend Musical Instruments: Playing a Different Tune (C)" written by Mark Hunter, David A. Soberman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Instruments Guitar facing as an external strategic factors. Some of the topics covered in Reverend Musical Instruments: Playing a Different Tune (C) case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reverend Musical Instruments: Playing a Different Tune (C) casestudy better are - – increasing household debt because of falling income levels, there is backlash against globalization, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Reverend Musical Instruments: Playing a Different Tune (C)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reverend Musical Instruments: Playing a Different Tune (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Instruments Guitar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Instruments Guitar 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 Reverend Musical Instruments: Playing a Different Tune (C) can be done for the following purposes –
1. Strategic planning using facts provided in Reverend Musical Instruments: Playing a Different Tune (C) case study
2. Improving business portfolio management of Instruments Guitar
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Instruments Guitar
Strengths Reverend Musical Instruments: Playing a Different Tune (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Instruments Guitar in Reverend Musical Instruments: Playing a Different Tune (C) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Instruments Guitar 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 Reverend Musical Instruments: Playing a Different Tune (C) - 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 Sales & Marketing segment
- digital transformation varies from industry to industry. For Instruments Guitar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Instruments Guitar 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.
Strong track record of project management
– Instruments Guitar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Instruments Guitar 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 Reverend Musical Instruments: Playing a Different Tune (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Instruments Guitar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Instruments Guitar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Reverend Musical Instruments: Playing a Different Tune (C) 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.
Analytics focus
– Instruments Guitar 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 Mark Hunter, David A. Soberman 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.
Superior customer experience
– The customer experience strategy of Instruments Guitar in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Instruments Guitar has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Reverend Musical Instruments: Playing a Different Tune (C) 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.
Diverse revenue streams
– Instruments Guitar is present in almost all the verticals within the industry. This has provided firm in Reverend Musical Instruments: Playing a Different Tune (C) 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.
Cross disciplinary teams
– Horizontal connected teams at the Instruments Guitar 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.
Low bargaining power of suppliers
– Suppliers of Instruments Guitar in the sector have low bargaining power. Reverend Musical Instruments: Playing a Different Tune (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Instruments Guitar to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Reverend Musical Instruments: Playing a Different Tune (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reverend Musical Instruments: Playing a Different Tune (C) are -
High cash cycle compare to competitors
Instruments Guitar 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, Instruments Guitar 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reverend Musical Instruments: Playing a Different Tune (C), in the dynamic environment Instruments Guitar has struggled to respond to the nimble upstart competition. Instruments Guitar has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Hunter, David A. Soberman suggests that, Instruments Guitar 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Instruments Guitar is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reverend Musical Instruments: Playing a Different Tune (C) 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Reverend Musical Instruments: Playing a Different Tune (C) 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 Instruments Guitar has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Instruments Guitar 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.
Skills based hiring
– The stress on hiring functional specialists at Instruments Guitar 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.
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 Instruments Guitar supply chain. Even after few cautionary changes mentioned in the HBR case study - Reverend Musical Instruments: Playing a Different Tune (C), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Instruments Guitar vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Instruments Guitar has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reverend Musical Instruments: Playing a Different Tune (C), is just above the industry average. Instruments Guitar 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.
Opportunities Reverend Musical Instruments: Playing a Different Tune (C) | 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 Reverend Musical Instruments: Playing a Different Tune (C) are -
Manufacturing automation
– Instruments Guitar can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Instruments Guitar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Instruments Guitar can use these opportunities to build new business models that can help the communities that Instruments Guitar operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Instruments Guitar 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Instruments Guitar 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Instruments Guitar 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. Instruments Guitar 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Instruments Guitar 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, Reverend Musical Instruments: Playing a Different Tune (C), 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. Instruments Guitar can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Instruments Guitar can develop new processes and procedures in Sales & Marketing 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.
Buying journey improvements
– Instruments Guitar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reverend Musical Instruments: Playing a Different Tune (C) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Instruments Guitar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Instruments Guitar in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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 Instruments Guitar 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.
Threats Reverend Musical Instruments: Playing a Different Tune (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reverend Musical Instruments: Playing a Different Tune (C) are -
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 Instruments Guitar.
Shortening product life cycle
– it is one of the major threat that Instruments Guitar is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Instruments Guitar 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.
Environmental challenges
– Instruments Guitar 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. Instruments Guitar can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reverend Musical Instruments: Playing a Different Tune (C), Instruments Guitar may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Stagnating economy with rate increase
– Instruments Guitar 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.
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 Instruments Guitar in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Instruments Guitar 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.
Regulatory challenges
– Instruments Guitar 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 Sales & Marketing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Instruments Guitar 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 Reverend Musical Instruments: Playing a Different Tune (C) .
Consumer confidence and its impact on Instruments Guitar 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.
Increasing wage structure of Instruments Guitar
– 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 Instruments Guitar.
Technology acceleration in Forth Industrial Revolution
– Instruments Guitar has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Instruments Guitar needs to keep up with the evolution of technology in the Sales & Marketing 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 Reverend Musical Instruments: Playing a Different Tune (C) 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 Reverend Musical Instruments: Playing a Different Tune (C) 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 Reverend Musical Instruments: Playing a Different Tune (C) 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 Reverend Musical Instruments: Playing a Different Tune (C) 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 Reverend Musical Instruments: Playing a Different Tune (C) 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 Instruments Guitar needs to make to build a sustainable competitive advantage.
