Case Study Description of An Activist Approach: Castle Rock-Fultons-Remingtons
A three party, multiple-issue negotiation exercise dealing with a potential merger between two leading department stores, called for by an activist investor hedge fund in a letter to both companies. Company management will now attempt to navigate next moves, which are complicated by weak takeover defenses of their corporate boards, hedge fund ownership stake within both companies, and potential anti-trust risk. Meanwhile, the third party, the activist hedge fund, is turning up the heat in planning their next move.
Swot Analysis of "An Activist Approach: Castle Rock-Fultons-Remingtons" written by Guhan Subramanian, Kaitlyn Szydlowski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Activist Hedge facing as an external strategic factors. Some of the topics covered in An Activist Approach: Castle Rock-Fultons-Remingtons case study are - Strategic Management Strategies, Mergers & acquisitions, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the An Activist Approach: Castle Rock-Fultons-Remingtons casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, wage bills are increasing, supply chains are disrupted by pandemic ,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of An Activist Approach: Castle Rock-Fultons-Remingtons
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in An Activist Approach: Castle Rock-Fultons-Remingtons case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Activist Hedge, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Activist Hedge 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 An Activist Approach: Castle Rock-Fultons-Remingtons can be done for the following purposes –
1. Strategic planning using facts provided in An Activist Approach: Castle Rock-Fultons-Remingtons case study
2. Improving business portfolio management of Activist Hedge
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 Activist Hedge
Strengths An Activist Approach: Castle Rock-Fultons-Remingtons | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Activist Hedge in An Activist Approach: Castle Rock-Fultons-Remingtons Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– An Activist Approach: Castle Rock-Fultons-Remingtons firm has clearly differentiated products in the market place. This has enabled Activist Hedge to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Activist Hedge to invest into research and development (R&D) and innovation.
Training and development
– Activist Hedge has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in An Activist Approach: Castle Rock-Fultons-Remingtons 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.
Operational resilience
– The operational resilience strategy in the An Activist Approach: Castle Rock-Fultons-Remingtons 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
– Activist Hedge 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 Guhan Subramanian, Kaitlyn Szydlowski 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.
Low bargaining power of suppliers
– Suppliers of Activist Hedge in the sector have low bargaining power. An Activist Approach: Castle Rock-Fultons-Remingtons has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Activist Hedge to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Activist Hedge
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Activist Hedge does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Activist Hedge 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 switching costs
– The high switching costs that Activist Hedge 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.
Highly skilled collaborators
– Activist Hedge 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 An Activist Approach: Castle Rock-Fultons-Remingtons HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Activist Hedge is one of the leading recruiters in the industry. Managers in the An Activist Approach: Castle Rock-Fultons-Remingtons are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Activist Hedge is one of the most innovative firm in sector. Manager in An Activist Approach: Castle Rock-Fultons-Remingtons Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Activist Hedge in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses An Activist Approach: Castle Rock-Fultons-Remingtons | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of An Activist Approach: Castle Rock-Fultons-Remingtons are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study An Activist Approach: Castle Rock-Fultons-Remingtons, in the dynamic environment Activist Hedge has struggled to respond to the nimble upstart competition. Activist Hedge has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study An Activist Approach: Castle Rock-Fultons-Remingtons, 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.
Capital Spending Reduction
– Even during the low interest decade, Activist Hedge 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.
High cash cycle compare to competitors
Activist Hedge 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 operating costs
– Compare to the competitors, firm in the HBR case study An Activist Approach: Castle Rock-Fultons-Remingtons 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 Activist Hedge 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the An Activist Approach: Castle Rock-Fultons-Remingtons 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 Activist Hedge has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Activist Hedge 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.
Low market penetration in new markets
– Outside its home market of Activist Hedge, firm in the HBR case study An Activist Approach: Castle Rock-Fultons-Remingtons needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Activist Hedge 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Guhan Subramanian, Kaitlyn Szydlowski suggests that, Activist Hedge 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.
Aligning sales with marketing
– It come across in the case study An Activist Approach: Castle Rock-Fultons-Remingtons 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 An Activist Approach: Castle Rock-Fultons-Remingtons can leverage the sales team experience to cultivate customer relationships as Activist Hedge is planning to shift buying processes online.
Opportunities An Activist Approach: Castle Rock-Fultons-Remingtons | 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 An Activist Approach: Castle Rock-Fultons-Remingtons are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Activist Hedge 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 Activist Hedge to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Activist Hedge 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Activist Hedge can use these opportunities to build new business models that can help the communities that Activist Hedge operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Activist Hedge 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.
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. Activist Hedge can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Activist Hedge 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.
Buying journey improvements
– Activist Hedge can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. An Activist Approach: Castle Rock-Fultons-Remingtons 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Activist Hedge can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Activist Hedge is facing challenges because of the dominance of functional experts in the organization. An Activist Approach: Castle Rock-Fultons-Remingtons 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.
Better consumer reach
– The expansion of the 5G network will help Activist Hedge to increase its market reach. Activist Hedge 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Activist Hedge 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 Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Activist Hedge 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. Activist Hedge 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.
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. Activist Hedge can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats An Activist Approach: Castle Rock-Fultons-Remingtons External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study An Activist Approach: Castle Rock-Fultons-Remingtons are -
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. Activist Hedge 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
– Activist Hedge 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. Activist Hedge can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Activist Hedge 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Activist Hedge with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Activist Hedge 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 An Activist Approach: Castle Rock-Fultons-Remingtons .
Consumer confidence and its impact on Activist Hedge 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 acceleration in Forth Industrial Revolution
– Activist Hedge has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Activist Hedge 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.
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.
Shortening product life cycle
– it is one of the major threat that Activist Hedge is facing in Strategy & Execution 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 Activist Hedge.
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. Activist Hedge needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Activist Hedge 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.
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. Activist Hedge can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of An Activist Approach: Castle Rock-Fultons-Remingtons 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 An Activist Approach: Castle Rock-Fultons-Remingtons 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 An Activist Approach: Castle Rock-Fultons-Remingtons 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 An Activist Approach: Castle Rock-Fultons-Remingtons 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 An Activist Approach: Castle Rock-Fultons-Remingtons 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 Activist Hedge needs to make to build a sustainable competitive advantage.
