Southern Chair Company: No Time for Sitting Around! SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Southern Chair Company: No Time for Sitting Around!
Prior to the turn of the century, North Carolina was the hub of prosperous furniture manufacturing. However, competition from global manufacturers, the rise of Internet retailers, and the turbulent U.S. economy created significant challenges and changes for the industry. Many U.S.-based firms exited the industry due to global competition and poor financial performance. Robert Drake, owner of North Carolina-based Southern Chair Company, recognized the need for a new Strategic Plan; a plan to guide his company both through and beyond the challenging times. He remained committed to the long-term health of his manufacturing firm and hoped that his company would not join the ranks of his former, now defunct, competitors. In this case, the reader steps into the shoes of Robert Drake to create a strategic plan for Southern Chair Company while considering trends in external environments, key components of the business, and Robert's personal goals for the company.
Swot Analysis of "Southern Chair Company: No Time for Sitting Around!" written by Gregory Berka, Erika Lopina, Logan Justice, Tammy Beck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Drake Chair facing as an external strategic factors. Some of the topics covered in Southern Chair Company: No Time for Sitting Around! case study are - Strategic Management Strategies, Decision making, Manufacturing, Strategic planning and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Southern Chair Company: No Time for Sitting Around! 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, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Southern Chair Company: No Time for Sitting Around!
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Southern Chair Company: No Time for Sitting Around! case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Drake Chair, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Drake Chair 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 Southern Chair Company: No Time for Sitting Around! can be done for the following purposes –
1. Strategic planning using facts provided in Southern Chair Company: No Time for Sitting Around! case study
2. Improving business portfolio management of Drake Chair
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 Drake Chair
Strengths Southern Chair Company: No Time for Sitting Around! | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Drake Chair in Southern Chair Company: No Time for Sitting Around! Harvard Business Review case study are -
Successful track record of launching new products
– Drake Chair has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Drake Chair 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.
Cross disciplinary teams
– Horizontal connected teams at the Drake Chair 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.
Strong track record of project management
– Drake Chair is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Drake Chair is one of the leading recruiters in the industry. Managers in the Southern Chair Company: No Time for Sitting Around! are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Drake Chair 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 Southern Chair Company: No Time for Sitting Around! - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Drake Chair is one of the most innovative firm in sector. Manager in Southern Chair Company: No Time for Sitting Around! Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Drake Chair 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 Southern Chair Company: No Time for Sitting Around! HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Drake Chair is present in almost all the verticals within the industry. This has provided firm in Southern Chair Company: No Time for Sitting Around! 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.
High switching costs
– The high switching costs that Drake Chair 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.
Learning organization
- Drake Chair 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 Drake Chair is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Southern Chair Company: No Time for Sitting Around! Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Drake Chair
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Drake Chair does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Drake Chair in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Southern Chair Company: No Time for Sitting Around! | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Southern Chair Company: No Time for Sitting Around! are -
Workers concerns about automation
– As automation is fast increasing in the segment, Drake Chair 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 Drake Chair 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Southern Chair Company: No Time for Sitting Around!, is just above the industry average. Drake Chair 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.
High cash cycle compare to competitors
Drake Chair 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gregory Berka, Erika Lopina, Logan Justice, Tammy Beck suggests that, Drake Chair 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.
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 Drake Chair supply chain. Even after few cautionary changes mentioned in the HBR case study - Southern Chair Company: No Time for Sitting Around!, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Drake Chair vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Drake Chair is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Drake Chair needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Drake Chair to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Drake Chair products
– To increase the profitability and margins on the products, Drake Chair needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Drake Chair 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Drake Chair is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Southern Chair Company: No Time for Sitting Around! can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Southern Chair Company: No Time for Sitting Around! 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 Southern Chair Company: No Time for Sitting Around! can leverage the sales team experience to cultivate customer relationships as Drake Chair is planning to shift buying processes online.
Opportunities Southern Chair Company: No Time for Sitting Around! | 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 Southern Chair Company: No Time for Sitting Around! are -
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 Drake Chair 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, Drake Chair can use these opportunities to build new business models that can help the communities that Drake Chair operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Loyalty marketing
– Drake Chair 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Drake Chair 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Drake Chair 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.
Learning at scale
– Online learning technologies has now opened space for Drake Chair 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, Drake Chair is facing challenges because of the dominance of functional experts in the organization. Southern Chair Company: No Time for Sitting Around! 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.
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. Drake Chair 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. Drake Chair 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.
Building a culture of innovation
– managers at Drake Chair 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 Sales & Marketing segment.
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. Drake Chair can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Drake Chair 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 Southern Chair Company: No Time for Sitting Around! - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Drake Chair to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Drake Chair 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, Southern Chair Company: No Time for Sitting Around!, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Drake Chair can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Southern Chair Company: No Time for Sitting Around! suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Southern Chair Company: No Time for Sitting Around! External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Southern Chair Company: No Time for Sitting Around! are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Southern Chair Company: No Time for Sitting Around!, Drake Chair 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 .
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Drake Chair can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Drake Chair
– 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 Drake Chair.
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. Drake Chair 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.
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.
Environmental challenges
– Drake Chair 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. Drake Chair can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Drake Chair needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Drake Chair is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Drake Chair.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Drake Chair in the Sales & Marketing industry. The Sales & Marketing 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.
Regulatory challenges
– Drake Chair 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.
Consumer confidence and its impact on Drake Chair 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
– Drake Chair 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 Southern Chair Company: No Time for Sitting Around! 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 Southern Chair Company: No Time for Sitting Around! 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 Southern Chair Company: No Time for Sitting Around! 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 Southern Chair Company: No Time for Sitting Around! 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 Southern Chair Company: No Time for Sitting Around! 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 Drake Chair needs to make to build a sustainable competitive advantage.