Business Week's June 1997 "Rising Star" profile of Springs Industries' president and COO, Crandall Bowles, reported that she was poised to become one of the top two or three women executives in the country. In November 1997, the company announced Bowles' appointment to the position of CEO. A priority on her agenda was to hone in on the company's information systems (IS) strategy and determine both the breadth of expenditures and the pace of innovation necessary for coming years. Springs Industries, Inc.-a $2.2 billion textile company headquartered in South Carolina,-produces home furnishings under such well-known brand names as Wamsutta and Springmaid and major licenses such as Disney, Liz at Home, and Bill Blass. Springs' customers, mega-retailers such as Wal-Mart, Kmart, and Target, expected suppliers to keep inventories precisely tuned to consumers' purchasing trends. Many suppliers were developing sophisticated information technology (IT) systems for analyzing mega-retailers' point of sale (POS) data. To increase profitability, Springs had to quicken the pace of its application of new technology and sources of information to marketing, customer service, and inventory management. Bowles was navigating the 110-year old company through massive change as it entered a business environment where electronic commerce and marketing were key sources of competitive differentiation.
Swot Analysis of "www.springs.com" written by F. Warren McFarlan, Melissa Dailey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Springs Bowles facing as an external strategic factors. Some of the topics covered in www.springs.com case study are - Strategic Management Strategies, IT, Marketing and Technology & Operations.
Some of the macro environment factors that can be used to understand the www.springs.com casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, technology disruption, talent flight as more people leaving formal jobs,
increasing commodity prices, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in www.springs.com case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Springs Bowles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Springs Bowles 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 www.springs.com can be done for the following purposes –
1. Strategic planning using facts provided in www.springs.com case study
2. Improving business portfolio management of Springs Bowles
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Springs Bowles
Strengths www.springs.com | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Springs Bowles in www.springs.com Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– www.springs.com firm has clearly differentiated products in the market place. This has enabled Springs Bowles to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Springs Bowles to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Springs Bowles in the sector have low bargaining power. www.springs.com has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Springs Bowles to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Springs Bowles has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in www.springs.com 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 www.springs.com 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.
Effective Research and Development (R&D)
– Springs Bowles 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 www.springs.com - 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 brand equity
– Springs Bowles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Springs Bowles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Springs Bowles 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 www.springs.com HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Springs Bowles is present in almost all the verticals within the industry. This has provided firm in www.springs.com case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Springs Bowles
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Springs Bowles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Springs Bowles 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 F. Warren McFarlan, Melissa Dailey 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Springs Bowles digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Springs Bowles 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.
Ability to recruit top talent
– Springs Bowles is one of the leading recruiters in the industry. Managers in the www.springs.com are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses www.springs.com | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of www.springs.com are -
Low market penetration in new markets
– Outside its home market of Springs Bowles, firm in the HBR case study www.springs.com needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study www.springs.com, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the www.springs.com 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 Springs Bowles has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Springs Bowles is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study www.springs.com can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Melissa Dailey suggests that, Springs Bowles 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study www.springs.com, is just above the industry average. Springs Bowles 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.
Interest costs
– Compare to the competition, Springs Bowles 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.
Lack of clear differentiation of Springs Bowles products
– To increase the profitability and margins on the products, Springs Bowles needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study www.springs.com, in the dynamic environment Springs Bowles has struggled to respond to the nimble upstart competition. Springs Bowles has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study www.springs.com 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 www.springs.com can leverage the sales team experience to cultivate customer relationships as Springs Bowles is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study www.springs.com 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 Springs Bowles 's lucrative customers.
Opportunities www.springs.com | 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 www.springs.com are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Springs Bowles 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. Springs Bowles 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.
Loyalty marketing
– Springs Bowles 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.
Manufacturing automation
– Springs Bowles can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Springs Bowles can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Springs Bowles to increase its market reach. Springs Bowles 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Springs Bowles can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Springs Bowles can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. www.springs.com 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.
Developing new processes and practices
– Springs Bowles can develop new processes and procedures in Technology & Operations 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Springs Bowles in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Springs Bowles has opened avenues for new revenue streams for the organization in the industry. This can help Springs Bowles to build a more holistic ecosystem as suggested in the www.springs.com case study. Springs Bowles can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Springs Bowles 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 www.springs.com - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Springs Bowles to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Springs Bowles can use these opportunities to build new business models that can help the communities that Springs Bowles operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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. Springs Bowles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats www.springs.com External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study www.springs.com are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Springs Bowles in the Technology & Operations industry. The Technology & Operations 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.
Increasing wage structure of Springs Bowles
– 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 Springs Bowles.
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. Springs Bowles needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Springs Bowles is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Springs Bowles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Springs Bowles 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.
Stagnating economy with rate increase
– Springs Bowles 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.
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 Springs Bowles in the Technology & Operations sector and impact the bottomline of the organization.
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 Springs Bowles.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Springs Bowles 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 www.springs.com .
Regulatory challenges
– Springs Bowles 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 Technology & Operations industry regulations.
Weighted SWOT Analysis of www.springs.com 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 www.springs.com 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 www.springs.com 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 www.springs.com 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 www.springs.com 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 Springs Bowles needs to make to build a sustainable competitive advantage.
