Homestead Technologies: A Start-up Built to Last SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Homestead Technologies: A Start-up Built to Last
Justin Kitch, CEO and cofounder of Homestead Technologies, an Internet communications company that offers a comprehensive resource for building Web sites to individuals and businesses, wondered, in the midst of the dotcom boom in 2000, just how tight the connection was between building a company with a strong culture and high performance. Homestead Technologies' history, business model, competitive environment, culture, information-sharing procedures, and human resources management are described. Kitch asks whether companies built with a short-term mentality could create lasting value for customers, employees, and shareholders and wonders whether companies and their employees owe something to their surrounding communities. Although personally committed to building an enduring organization that contributes to its employees as well as shareholders, Kitch asks whether this approach offers any long-term advantages over that of entrepreneurs who simply wanted to flip their companies.
Authors :: Charles A. O'Reilly, Chrishan Thuraisingham
Swot Analysis of "Homestead Technologies: A Start-up Built to Last" written by Charles A. O'Reilly, Chrishan Thuraisingham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kitch Homestead facing as an external strategic factors. Some of the topics covered in Homestead Technologies: A Start-up Built to Last case study are - Strategic Management Strategies, Human resource management, Internet, Motivating people, Organizational culture, Performance measurement and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Homestead Technologies: A Start-up Built to Last casestudy better are - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, there is backlash against globalization, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of Homestead Technologies: A Start-up Built to Last
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Homestead Technologies: A Start-up Built to Last case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kitch Homestead, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kitch Homestead 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 Homestead Technologies: A Start-up Built to Last can be done for the following purposes –
1. Strategic planning using facts provided in Homestead Technologies: A Start-up Built to Last case study
2. Improving business portfolio management of Kitch Homestead
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 Kitch Homestead
Strengths Homestead Technologies: A Start-up Built to Last | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kitch Homestead in Homestead Technologies: A Start-up Built to Last Harvard Business Review case study are -
Innovation driven organization
– Kitch Homestead is one of the most innovative firm in sector. Manager in Homestead Technologies: A Start-up Built to Last 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
– Kitch Homestead 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 Homestead Technologies: A Start-up Built to Last HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Kitch Homestead
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kitch Homestead does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Kitch Homestead is one of the leading recruiters in the industry. Managers in the Homestead Technologies: A Start-up Built to Last are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Kitch Homestead in the sector have low bargaining power. Homestead Technologies: A Start-up Built to Last has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kitch Homestead to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Kitch Homestead is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Kitch Homestead has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kitch Homestead to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Kitch Homestead 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.
Effective Research and Development (R&D)
– Kitch Homestead 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 Homestead Technologies: A Start-up Built to Last - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Kitch Homestead 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.
Training and development
– Kitch Homestead has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Homestead Technologies: A Start-up Built to Last 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.
Successful track record of launching new products
– Kitch Homestead has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kitch Homestead 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.
Weaknesses Homestead Technologies: A Start-up Built to Last | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Homestead Technologies: A Start-up Built to Last are -
Need for greater diversity
– Kitch Homestead 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Homestead Technologies: A Start-up Built to Last 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 Kitch Homestead has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Kitch Homestead 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.
Slow to strategic competitive environment developments
– As Homestead Technologies: A Start-up Built to Last HBR case study mentions - Kitch Homestead takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Kitch Homestead 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 bargaining power of channel partners
– Because of the regulatory requirements, Charles A. O'Reilly, Chrishan Thuraisingham suggests that, Kitch Homestead 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 operating costs
– Compare to the competitors, firm in the HBR case study Homestead Technologies: A Start-up Built to Last 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 Kitch Homestead 's lucrative customers.
Lack of clear differentiation of Kitch Homestead products
– To increase the profitability and margins on the products, Kitch Homestead needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Kitch Homestead 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.
Products dominated business model
– Even though Kitch Homestead 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 - Homestead Technologies: A Start-up Built to Last should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Homestead Technologies: A Start-up Built to Last 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 Homestead Technologies: A Start-up Built to Last can leverage the sales team experience to cultivate customer relationships as Kitch Homestead is planning to shift buying processes online.
Opportunities Homestead Technologies: A Start-up Built to Last | 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 Homestead Technologies: A Start-up Built to Last are -
Developing new processes and practices
– Kitch Homestead 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.
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 Kitch Homestead 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.
Better consumer reach
– The expansion of the 5G network will help Kitch Homestead to increase its market reach. Kitch Homestead 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.
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. Kitch Homestead can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Kitch Homestead 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 Strategy & Execution segment.
Manufacturing automation
– Kitch Homestead 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kitch Homestead 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. Kitch Homestead 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kitch Homestead 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 Kitch Homestead 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kitch Homestead 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 Kitch Homestead to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kitch Homestead can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Kitch Homestead 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.
Loyalty marketing
– Kitch Homestead 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.
Threats Homestead Technologies: A Start-up Built to Last External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Homestead Technologies: A Start-up Built to Last are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kitch Homestead 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.
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 Kitch Homestead.
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 Kitch Homestead in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Kitch Homestead has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Kitch Homestead 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kitch Homestead can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Kitch Homestead 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.
Environmental challenges
– Kitch Homestead 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. Kitch Homestead can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kitch Homestead 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 Homestead Technologies: A Start-up Built to Last .
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 Kitch Homestead business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kitch Homestead with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Kitch Homestead 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Homestead Technologies: A Start-up Built to Last, Kitch Homestead may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Homestead Technologies: A Start-up Built to Last 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 Homestead Technologies: A Start-up Built to Last 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 Homestead Technologies: A Start-up Built to Last 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 Homestead Technologies: A Start-up Built to Last 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 Homestead Technologies: A Start-up Built to Last 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 Kitch Homestead needs to make to build a sustainable competitive advantage.
