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 government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, there is backlash against globalization, wage bills are increasing, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, 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 -
Learning organization
- Activist Hedge 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 Activist Hedge is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in An Activist Approach: Castle Rock-Fultons-Remingtons Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
High brand equity
– Activist Hedge has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Activist Hedge to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Activist Hedge 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 An Activist Approach: Castle Rock-Fultons-Remingtons - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
Products dominated business model
– Even though Activist Hedge 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 - An Activist Approach: Castle Rock-Fultons-Remingtons should strive to include more intangible value offerings along with its core products and services.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study An Activist Approach: Castle Rock-Fultons-Remingtons, is just above the industry average. Activist Hedge 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 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 Activist Hedge supply chain. Even after few cautionary changes mentioned in the HBR case study - An Activist Approach: Castle Rock-Fultons-Remingtons, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Activist Hedge vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Activist Hedge is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Activist Hedge needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Activist Hedge to focus more on services rather than just following the product oriented approach.
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.
Lack of clear differentiation of Activist Hedge products
– To increase the profitability and margins on the products, Activist Hedge needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Slow to strategic competitive environment developments
– As An Activist Approach: Castle Rock-Fultons-Remingtons HBR case study mentions - Activist Hedge 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.
Need for greater diversity
– Activist Hedge 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.
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 -
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Activist Hedge in the consumer business. Now Activist Hedge can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Using analytics as competitive advantage
– Activist Hedge 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 An Activist Approach: Castle Rock-Fultons-Remingtons - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Activist Hedge to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Activist Hedge in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Creating value in data economy
– The success of analytics program of Activist Hedge has opened avenues for new revenue streams for the organization in the industry. This can help Activist Hedge to build a more holistic ecosystem as suggested in the An Activist Approach: Castle Rock-Fultons-Remingtons case study. Activist Hedge can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Activist Hedge 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, An Activist Approach: Castle Rock-Fultons-Remingtons, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
Increasing wage structure of Activist Hedge
– 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 Activist Hedge.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study An Activist Approach: Castle Rock-Fultons-Remingtons, Activist Hedge 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 .
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 Activist Hedge business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.