A university instructor mulls over the idea of partnering with six of his students to start a new business that would provide all-in-one starter kits for first-year university or college students moving into residences across Canada. To help with his decision-making process, the instructor wants to evaluate the product and the group's marketing strategy; he also wants to project the new venture's financial performance for the first three years of operations.
Authors :: Elizabeth M.A. Grasby, Gregory Critchley
Swot Analysis of "Northern Rush" written by Elizabeth M.A. Grasby, Gregory Critchley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Instructor Starter facing as an external strategic factors. Some of the topics covered in Northern Rush case study are - Strategic Management Strategies, Market research and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Northern Rush casestudy better are - – technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing transportation and logistics costs, wage bills are increasing, geopolitical disruptions, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Northern Rush case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Instructor Starter, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Instructor Starter 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 Northern Rush can be done for the following purposes –
1. Strategic planning using facts provided in Northern Rush case study
2. Improving business portfolio management of Instructor Starter
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Instructor Starter
Strengths Northern Rush | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Instructor Starter in Northern Rush Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Instructor Starter is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Instructor Starter in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Instructor Starter 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.
Ability to recruit top talent
– Instructor Starter is one of the leading recruiters in the industry. Managers in the Northern Rush are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Instructor Starter in the sector have low bargaining power. Northern Rush has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Instructor Starter to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Instructor Starter 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 Instructor Starter is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Northern Rush Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Instructor Starter is one of the most innovative firm in sector. Manager in Northern Rush Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– Northern Rush firm has clearly differentiated products in the market place. This has enabled Instructor Starter to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Instructor Starter to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Instructor Starter in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Instructor Starter 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 Northern Rush - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Instructor Starter 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 Elizabeth M.A. Grasby, Gregory Critchley 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.
Diverse revenue streams
– Instructor Starter is present in almost all the verticals within the industry. This has provided firm in Northern Rush 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.
Training and development
– Instructor Starter has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Northern Rush 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.
Weaknesses Northern Rush | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northern Rush are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Northern Rush 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 Instructor Starter has relatively successful track record of launching new products.
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 Instructor Starter supply chain. Even after few cautionary changes mentioned in the HBR case study - Northern Rush, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Instructor Starter vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Northern Rush 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 Northern Rush can leverage the sales team experience to cultivate customer relationships as Instructor Starter is planning to shift buying processes online.
Products dominated business model
– Even though Instructor Starter 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 - Northern Rush 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 Instructor Starter, firm in the HBR case study Northern Rush 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 Northern Rush 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 Instructor Starter 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Instructor Starter has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Instructor Starter is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Northern Rush can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Northern Rush, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 bargaining power of channel partners
– Because of the regulatory requirements, Elizabeth M.A. Grasby, Gregory Critchley suggests that, Instructor Starter 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.
Skills based hiring
– The stress on hiring functional specialists at Instructor Starter has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Northern Rush | 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 Northern Rush are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Instructor Starter 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, Instructor Starter is facing challenges because of the dominance of functional experts in the organization. Northern Rush 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
– Instructor Starter 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Instructor Starter 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 Instructor Starter has opened avenues for new revenue streams for the organization in the industry. This can help Instructor Starter to build a more holistic ecosystem as suggested in the Northern Rush case study. Instructor Starter 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
– Instructor Starter 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 Northern Rush - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Instructor Starter to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Instructor Starter can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Building a culture of innovation
– managers at Instructor Starter 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 Finance & Accounting segment.
Better consumer reach
– The expansion of the 5G network will help Instructor Starter to increase its market reach. Instructor Starter 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.
Loyalty marketing
– Instructor Starter 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.
Learning at scale
– Online learning technologies has now opened space for Instructor Starter 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Instructor Starter 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, Northern Rush, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Instructor Starter 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 Instructor Starter to hire the very best people irrespective of their geographical location.
Threats Northern Rush External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Northern Rush are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Instructor Starter 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 Northern Rush .
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.
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 Instructor Starter.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Instructor Starter can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Northern Rush, Instructor Starter may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Instructor Starter in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Instructor Starter has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Instructor Starter needs to keep up with the evolution of technology in the Finance & Accounting 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.
High dependence on third party suppliers
– Instructor Starter 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.
Increasing wage structure of Instructor Starter
– 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 Instructor Starter.
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 Instructor Starter with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Instructor Starter 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.
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. Instructor Starter needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Northern Rush 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 Northern Rush 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 Northern Rush 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 Northern Rush 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 Northern Rush 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 Instructor Starter needs to make to build a sustainable competitive advantage.
