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 inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, there is backlash against globalization, increasing energy prices,
increasing household debt because of falling income levels, 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 -
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.
Innovation driven organization
– Peninsula Holson is one of the most innovative firm in sector. Manager in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Peninsula Holson 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 Peninsula Holson in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Peninsula Holson 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 Peninsula Holson is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Analytics focus
– Peninsula Holson 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 Jacqueline Walsh, Blair Winsor, Jose Lam 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.
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.
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.
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.
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 -
Aligning sales with marketing
– It come across in the case study Holson Forest Products Ltd.: The Challenge of International Markets 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 Holson Forest Products Ltd.: The Challenge of International Markets can leverage the sales team experience to cultivate customer relationships as Peninsula Holson is planning to shift buying processes online.
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.
Interest costs
– Compare to the competition, Peninsula Holson 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Holson Forest Products Ltd.: The Challenge of International Markets 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 Peninsula Holson has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Peninsula Holson 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 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 -
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.
Developing new processes and practices
– Peninsula Holson can develop new processes and procedures in Leadership & Managing People 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Peninsula Holson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Peninsula Holson to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Peninsula Holson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Peninsula Holson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Peninsula Holson 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, Holson Forest Products Ltd.: The Challenge of International Markets, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Holson Forest Products Ltd.: The Challenge of International Markets, Peninsula Holson may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Peninsula Holson in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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.
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 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, 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Peninsula Holson in the Leadership & Managing People industry. The Leadership & Managing People 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.
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.
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.
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.
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.
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.
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.