Holson Forest Products Ltd.: The Challenge of International Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Holson Forest Products Ltd.: The Challenge of International Markets
This case is set in June 2016. Ted Lewis is the owner of Holson Forest Products Ltd. (Holson), one of the largest suppliers of lumber on the Northern Peninsula. In 2008, due to increased shipping costs, Holson's largest customer, Corner Brook Pulp and Paper Ltd. (CBPPL), decided to stop buying logs from the Northern Peninsula. Following CBPPL's decision, Lewis was forced to diversify his business. In 2011, after a feasibility study confirmed the potential of opening a wood pellet plant to produce finished products for local, national, and/or international markets, a pellet plant was completed in a remote area of the Northern Peninsula. Unfortunately, the lack of nearby port facilities to ship the product to international markets prevented the company from launching full production. In addition, because forested lands on the Northern Peninsula were not certified as sustainable forests, Holson's premium products could not be sold to residential markets in Europe. Lewis was faced with many challenges in an uncertain global market. Lewis needed a strategy that would allow him to confidently launch production of wood pellets. His strategic analysis had to take into account both external markets and internal issues related to resources, operations, marketing, human resources, and the management challenges of sustaining a business in rural Newfoundland. It also had to consider Lewis's values and commitment to the people of the Northern Peninsula.
Authors :: Jacqueline Walsh, Blair Winsor, Jose Lam
Swot Analysis of "Holson Forest Products Ltd.: The Challenge of International Markets" written by Jacqueline Walsh, Blair Winsor, Jose Lam includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Peninsula Holson facing as an external strategic factors. Some of the topics covered in Holson Forest Products Ltd.: The Challenge of International Markets case study are - Strategic Management Strategies, Growth strategy, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Holson Forest Products Ltd.: The Challenge of International Markets casestudy better are - – increasing energy prices, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Holson Forest Products Ltd.: The Challenge of International Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Holson Forest Products Ltd.: The Challenge of International Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Peninsula Holson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets can be done for the following purposes –
1. Strategic planning using facts provided in Holson Forest Products Ltd.: The Challenge of International Markets case study
2. Improving business portfolio management of Peninsula Holson
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Peninsula Holson
Strengths Holson Forest Products Ltd.: The Challenge of International Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Peninsula Holson in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study are -
High switching costs
– The high switching costs that Peninsula Holson 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.
Strong track record of project management
– Peninsula Holson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Peninsula Holson digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Peninsula Holson 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.
Low bargaining power of suppliers
– Suppliers of Peninsula Holson in the sector have low bargaining power. Holson Forest Products Ltd.: The Challenge of International Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Peninsula Holson to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Peninsula Holson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Peninsula Holson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Peninsula Holson in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Peninsula Holson has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Peninsula Holson 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.
Cross disciplinary teams
– Horizontal connected teams at the Peninsula Holson 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.
Diverse revenue streams
– Peninsula Holson is present in almost all the verticals within the industry. This has provided firm in Holson Forest Products Ltd.: The Challenge of International Markets 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Holson Forest Products Ltd.: The Challenge of International Markets firm has clearly differentiated products in the market place. This has enabled Peninsula Holson to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Peninsula Holson to invest into research and development (R&D) and innovation.
High brand equity
– Peninsula Holson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Peninsula Holson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Holson Forest Products Ltd.: The Challenge of International Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Holson Forest Products Ltd.: The Challenge of International Markets are -
Slow decision making process
– As mentioned earlier in the report, Peninsula Holson has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Peninsula Holson even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets, it seems that the employees of Peninsula Holson 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.
Capital Spending Reduction
– Even during the low interest decade, Peninsula Holson has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Jacqueline Walsh, Blair Winsor, Jose Lam suggests that, Peninsula Holson 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets 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 Peninsula Holson 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Peninsula Holson is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Peninsula Holson needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Peninsula Holson to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Peninsula Holson 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Peninsula Holson 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.
High cash cycle compare to competitors
Peninsula Holson has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Peninsula Holson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Holson Forest Products Ltd.: The Challenge of International Markets can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Peninsula Holson, firm in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Holson Forest Products Ltd.: The Challenge of International Markets | 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 Holson Forest Products Ltd.: The Challenge of International Markets are -
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. Peninsula Holson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Peninsula Holson 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 Leadership & Managing People segment.
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 Peninsula Holson in the consumer business. Now Peninsula Holson can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Peninsula Holson 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 Peninsula Holson to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Peninsula Holson to increase its market reach. Peninsula Holson 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Peninsula Holson can use these opportunities to build new business models that can help the communities that Peninsula Holson operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Peninsula Holson 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. Peninsula Holson 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
– Peninsula Holson 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.
Leveraging digital technologies
– Peninsula Holson 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.
Manufacturing automation
– Peninsula Holson can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Peninsula Holson has opened avenues for new revenue streams for the organization in the industry. This can help Peninsula Holson to build a more holistic ecosystem as suggested in the Holson Forest Products Ltd.: The Challenge of International Markets case study. Peninsula Holson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Peninsula Holson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Holson Forest Products Ltd.: The Challenge of International Markets 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.
Learning at scale
– Online learning technologies has now opened space for Peninsula Holson 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.
Threats Holson Forest Products Ltd.: The Challenge of International Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets .
Shortening product life cycle
– it is one of the major threat that Peninsula Holson is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Peninsula Holson needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Stagnating economy with rate increase
– Peninsula Holson 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Peninsula Holson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Peninsula Holson demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Peninsula Holson has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Peninsula Holson needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing wage structure of Peninsula Holson
– 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 Peninsula Holson.
High dependence on third party suppliers
– Peninsula Holson 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.
Regulatory challenges
– Peninsula Holson 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 Leadership & Managing People industry regulations.
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 Peninsula Holson business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Peninsula Holson 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. Peninsula Holson can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Holson Forest Products Ltd.: The Challenge of International Markets 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 Holson Forest Products Ltd.: The Challenge of International Markets 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 Holson Forest Products Ltd.: The Challenge of International Markets 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 Holson Forest Products Ltd.: The Challenge of International Markets 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 Holson Forest Products Ltd.: The Challenge of International Markets 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 Peninsula Holson needs to make to build a sustainable competitive advantage.
