Case Study Description of H&R Sewing Machine Company
This case deals with H&R, a company that distributes sewing equipment in Toronto, Ontario, Canada. Its future is in jeopardy because of fundamental changes in the global sewing industries stemming from changes in trade restrictions. The consequence is that Canadian sewing activities are in decline as activities in low-cost foreign countries grow rapidly. As Canadian activities decline, H&R's performance has been suffering. But the management of the family-owned company has had trouble seeing the challenge it faces because it has been highly successful for two generations. The case asks what the new CEO and third generation owner should do to save the company.
Swot Analysis of "H&R Sewing Machine Company" written by Stephen Hummel, Kenneth Harling includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sewing Activities facing as an external strategic factors. Some of the topics covered in H&R Sewing Machine Company case study are - Strategic Management Strategies, Globalization, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the H&R Sewing Machine Company casestudy better are - – technology disruption, cloud computing is disrupting traditional business models, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of H&R Sewing Machine Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in H&R Sewing Machine Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sewing Activities, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sewing Activities 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 H&R Sewing Machine Company can be done for the following purposes –
1. Strategic planning using facts provided in H&R Sewing Machine Company case study
2. Improving business portfolio management of Sewing Activities
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sewing Activities
Strengths H&R Sewing Machine Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sewing Activities in H&R Sewing Machine Company Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– H&R Sewing Machine Company firm has clearly differentiated products in the market place. This has enabled Sewing Activities to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sewing Activities to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Sewing Activities 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.
Superior customer experience
– The customer experience strategy of Sewing Activities in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Sewing Activities has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sewing Activities to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Sewing Activities 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
- Sewing Activities 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 Sewing Activities is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in H&R Sewing Machine Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Sewing Activities is one of the leading recruiters in the industry. Managers in the H&R Sewing Machine Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Sewing Activities is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Sewing Activities 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 Stephen Hummel, Kenneth Harling 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.
Training and development
– Sewing Activities has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in H&R Sewing Machine Company 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.
Highly skilled collaborators
– Sewing Activities 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 H&R Sewing Machine Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the H&R Sewing Machine Company 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.
Weaknesses H&R Sewing Machine Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of H&R Sewing Machine Company are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study H&R Sewing Machine Company, is just above the industry average. Sewing Activities 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.
No frontier risks strategy
– After analyzing the HBR case study H&R Sewing Machine Company, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Increasing silos among functional specialists
– The organizational structure of Sewing Activities is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sewing Activities needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sewing Activities to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Sewing Activities 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 - H&R Sewing Machine Company should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Sewing Activities products
– To increase the profitability and margins on the products, Sewing Activities needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Sewing Activities 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study H&R Sewing Machine Company, in the dynamic environment Sewing Activities has struggled to respond to the nimble upstart competition. Sewing Activities has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sewing Activities is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study H&R Sewing Machine Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Sewing Activities 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study H&R Sewing Machine Company, it seems that the employees of Sewing Activities 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.
High operating costs
– Compare to the competitors, firm in the HBR case study H&R Sewing Machine Company 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 Sewing Activities 's lucrative customers.
Opportunities H&R Sewing Machine Company | 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 H&R Sewing Machine Company are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sewing Activities is facing challenges because of the dominance of functional experts in the organization. H&R Sewing Machine Company 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.
Manufacturing automation
– Sewing Activities can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Creating value in data economy
– The success of analytics program of Sewing Activities has opened avenues for new revenue streams for the organization in the industry. This can help Sewing Activities to build a more holistic ecosystem as suggested in the H&R Sewing Machine Company case study. Sewing Activities can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Sewing Activities can develop new processes and procedures in Strategy & Execution 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.
Learning at scale
– Online learning technologies has now opened space for Sewing Activities 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.
Leveraging digital technologies
– Sewing Activities 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.
Buying journey improvements
– Sewing Activities can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. H&R Sewing Machine Company 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.
Better consumer reach
– The expansion of the 5G network will help Sewing Activities to increase its market reach. Sewing Activities 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.
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 Sewing Activities 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, Sewing Activities can use these opportunities to build new business models that can help the communities that Sewing Activities operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Sewing Activities can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sewing Activities to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sewing Activities to hire the very best people irrespective of their geographical location.
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. Sewing Activities can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats H&R Sewing Machine Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study H&R Sewing Machine Company are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sewing Activities in the Strategy & Execution industry. The Strategy & Execution 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.
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. Sewing Activities needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Sewing Activities.
Technology acceleration in Forth Industrial Revolution
– Sewing Activities has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Sewing Activities needs to keep up with the evolution of technology in the Strategy & Execution 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.
Consumer confidence and its impact on Sewing Activities 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sewing Activities with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Sewing Activities 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. Sewing Activities can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Sewing Activities is facing in Strategy & Execution 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. Sewing Activities 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.
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 Sewing Activities business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Sewing Activities
– 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 Sewing Activities.
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.
Regulatory challenges
– Sewing Activities 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 Strategy & Execution industry regulations.
Weighted SWOT Analysis of H&R Sewing Machine Company 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 H&R Sewing Machine Company 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 H&R Sewing Machine Company 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 H&R Sewing Machine Company 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 H&R Sewing Machine Company 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 Sewing Activities needs to make to build a sustainable competitive advantage.