Swot Analysis of "Hancock Land Co. and Hancock Lumber Co. (B)" written by Dwight B. Crane, Kelly M. Mulderry, John A. Davis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hancock Lumber facing as an external strategic factors. Some of the topics covered in Hancock Land Co. and Hancock Lumber Co. (B) case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hancock Land Co. and Hancock Lumber Co. (B) casestudy better are - – increasing energy prices, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing commodity prices,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Hancock Land Co. and Hancock Lumber Co. (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hancock Land Co. and Hancock Lumber Co. (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hancock Lumber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hancock Lumber 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 Hancock Land Co. and Hancock Lumber Co. (B) can be done for the following purposes –
1. Strategic planning using facts provided in Hancock Land Co. and Hancock Lumber Co. (B) case study
2. Improving business portfolio management of Hancock Lumber
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 Hancock Lumber
Strengths Hancock Land Co. and Hancock Lumber Co. (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hancock Lumber in Hancock Land Co. and Hancock Lumber Co. (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Hancock Land Co. and Hancock Lumber Co. (B) firm has clearly differentiated products in the market place. This has enabled Hancock Lumber to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hancock Lumber to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Hancock Lumber 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.
Low bargaining power of suppliers
– Suppliers of Hancock Lumber in the sector have low bargaining power. Hancock Land Co. and Hancock Lumber Co. (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hancock Lumber to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Hancock Lumber 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 Dwight B. Crane, Kelly M. Mulderry, John A. Davis 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.
Operational resilience
– The operational resilience strategy in the Hancock Land Co. and Hancock Lumber Co. (B) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hancock Lumber digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hancock Lumber has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Hancock Lumber has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hancock Lumber 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.
Ability to recruit top talent
– Hancock Lumber is one of the leading recruiters in the industry. Managers in the Hancock Land Co. and Hancock Lumber Co. (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Hancock Lumber 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 Hancock Land Co. and Hancock Lumber Co. (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Hancock Lumber 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 Hancock Land Co. and Hancock Lumber Co. (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Hancock Lumber 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.
High brand equity
– Hancock Lumber has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hancock Lumber to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Hancock Land Co. and Hancock Lumber Co. (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hancock Land Co. and Hancock Lumber Co. (B) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Lumber has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hancock Land Co. and Hancock Lumber Co. (B), it seems that the employees of Hancock Lumber 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.
Slow to strategic competitive environment developments
– As Hancock Land Co. and Hancock Lumber Co. (B) HBR case study mentions - Hancock Lumber 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hancock Land Co. and Hancock Lumber Co. (B), in the dynamic environment Hancock Lumber has struggled to respond to the nimble upstart competition. Hancock Lumber has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Dwight B. Crane, Kelly M. Mulderry, John A. Davis suggests that, Hancock Lumber 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.
Low market penetration in new markets
– Outside its home market of Hancock Lumber, firm in the HBR case study Hancock Land Co. and Hancock Lumber Co. (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Lumber 's lucrative customers.
Products dominated business model
– Even though Hancock Lumber 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 - Hancock Land Co. and Hancock Lumber Co. (B) should strive to include more intangible value offerings along with its core products and services.
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 Hancock Lumber supply chain. Even after few cautionary changes mentioned in the HBR case study - Hancock Land Co. and Hancock Lumber Co. (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hancock Lumber vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Hancock Lumber products
– To increase the profitability and margins on the products, Hancock Lumber needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Hancock Lumber 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.
Opportunities Hancock Land Co. and Hancock Lumber Co. (B) | 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 Hancock Land Co. and Hancock Lumber Co. (B) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hancock Lumber is facing challenges because of the dominance of functional experts in the organization. Hancock Land Co. and Hancock Lumber Co. (B) 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.
Leveraging digital technologies
– Hancock Lumber 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.
Learning at scale
– Online learning technologies has now opened space for Hancock Lumber 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.
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 Hancock Lumber in the consumer business. Now Hancock Lumber can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hancock Lumber 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.
Buying journey improvements
– Hancock Lumber can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hancock Land Co. and Hancock Lumber Co. (B) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hancock Lumber can use these opportunities to build new business models that can help the communities that Hancock Lumber operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Hancock Lumber 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.
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. Hancock Lumber 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 Hancock Lumber 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 Hancock Lumber to hire the very best people irrespective of their geographical location.
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. Hancock Lumber can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Hancock Lumber 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hancock Lumber 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, Hancock Land Co. and Hancock Lumber Co. (B), 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 Hancock Land Co. and Hancock Lumber Co. (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hancock Land Co. and Hancock Lumber Co. (B) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hancock Lumber with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Consumer confidence and its impact on Hancock Lumber demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Hancock Lumber 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hancock Land Co. and Hancock Lumber Co. (B), Hancock Lumber 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 .
Stagnating economy with rate increase
– Hancock Lumber can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Hancock Lumber
– 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 Hancock Lumber.
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.
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 Hancock Lumber.
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. Hancock Lumber can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Hancock Lumber in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Hancock Lumber 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hancock Lumber 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 Hancock Land Co. and Hancock Lumber Co. (B) .
Weighted SWOT Analysis of Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Land Co. and Hancock Lumber Co. (B) 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 Hancock Lumber needs to make to build a sustainable competitive advantage.