NewStar Marine & Scooter: Growing a Family Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NewStar Marine & Scooter: Growing a Family Business
NewStar Marine & Scooter Inc. was a small family-owned retail operation in Eastern Passage, Nova Scotia. It offered a diverse range of products, from boats and motors to scooters and trailers, all under one roof. For a small family business, it was very successful. Sales grew from $198,000 in the first year to over $600,000 by year three, despite little marketing, few part-time staff, and an unconventional operational strategy. By February 2017, this significant growth coupled with the owner's lack of planning had created a series of problems, including unhappy employees, facility limitations, and brand confusion. To continue its remarkable growth, the owner needed to rethink the business operational and marketing strategies. Ethan Pancer is affiliated with Saint Mary's University.
Swot Analysis of "NewStar Marine & Scooter: Growing a Family Business" written by Spencer Wiechert, Ethan Pancer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Newstar Scooter facing as an external strategic factors. Some of the topics covered in NewStar Marine & Scooter: Growing a Family Business case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the NewStar Marine & Scooter: Growing a Family Business casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, technology disruption, increasing household debt because of falling income levels, increasing energy prices, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of NewStar Marine & Scooter: Growing a Family Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NewStar Marine & Scooter: Growing a Family Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newstar Scooter, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newstar Scooter 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 NewStar Marine & Scooter: Growing a Family Business can be done for the following purposes –
1. Strategic planning using facts provided in NewStar Marine & Scooter: Growing a Family Business case study
2. Improving business portfolio management of Newstar Scooter
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Newstar Scooter
Strengths NewStar Marine & Scooter: Growing a Family Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newstar Scooter in NewStar Marine & Scooter: Growing a Family Business Harvard Business Review case study are -
High brand equity
– Newstar Scooter has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Newstar Scooter to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Newstar Scooter 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.
Effective Research and Development (R&D)
– Newstar Scooter 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 NewStar Marine & Scooter: Growing a Family Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Newstar Scooter has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Newstar Scooter 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.
Strong track record of project management
– Newstar Scooter is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Newstar Scooter 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 Newstar Scooter is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NewStar Marine & Scooter: Growing a Family Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Newstar Scooter in the sector have low bargaining power. NewStar Marine & Scooter: Growing a Family Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Newstar Scooter to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Newstar Scooter is present in almost all the verticals within the industry. This has provided firm in NewStar Marine & Scooter: Growing a Family Business 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.
Innovation driven organization
– Newstar Scooter is one of the most innovative firm in sector. Manager in NewStar Marine & Scooter: Growing a Family Business Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Newstar Scooter 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 NewStar Marine & Scooter: Growing a Family Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Sales & Marketing field
– Newstar Scooter 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 Newstar Scooter in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Sales & Marketing industry
– NewStar Marine & Scooter: Growing a Family Business firm has clearly differentiated products in the market place. This has enabled Newstar Scooter to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Newstar Scooter to invest into research and development (R&D) and innovation.
Weaknesses NewStar Marine & Scooter: Growing a Family Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NewStar Marine & Scooter: Growing a Family Business are -
High operating costs
– Compare to the competitors, firm in the HBR case study NewStar Marine & Scooter: Growing a Family Business 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 Newstar Scooter 's lucrative customers.
Products dominated business model
– Even though Newstar Scooter 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 - NewStar Marine & Scooter: Growing a Family Business should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Newstar Scooter 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.
Aligning sales with marketing
– It come across in the case study NewStar Marine & Scooter: Growing a Family Business 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 NewStar Marine & Scooter: Growing a Family Business can leverage the sales team experience to cultivate customer relationships as Newstar Scooter is planning to shift buying processes online.
Interest costs
– Compare to the competition, Newstar Scooter 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 Newstar Scooter products
– To increase the profitability and margins on the products, Newstar Scooter needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study NewStar Marine & Scooter: Growing a Family Business, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Capital Spending Reduction
– Even during the low interest decade, Newstar Scooter 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NewStar Marine & Scooter: Growing a Family Business, in the dynamic environment Newstar Scooter has struggled to respond to the nimble upstart competition. Newstar Scooter has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Newstar Scooter 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NewStar Marine & Scooter: Growing a Family Business, is just above the industry average. Newstar Scooter 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.
Opportunities NewStar Marine & Scooter: Growing a Family Business | 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 NewStar Marine & Scooter: Growing a Family Business are -
Better consumer reach
– The expansion of the 5G network will help Newstar Scooter to increase its market reach. Newstar Scooter 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newstar Scooter is facing challenges because of the dominance of functional experts in the organization. NewStar Marine & Scooter: Growing a Family Business 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Newstar Scooter can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Newstar Scooter can develop new processes and procedures in Sales & Marketing 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.
Leveraging digital technologies
– Newstar Scooter 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.
Loyalty marketing
– Newstar Scooter 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Newstar Scooter 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. Newstar Scooter 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.
Manufacturing automation
– Newstar Scooter can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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 Newstar Scooter in the consumer business. Now Newstar Scooter can target international markets with far fewer capital restrictions requirements than the existing system.
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 Newstar Scooter 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Newstar Scooter in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Newstar Scooter can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Newstar Scooter 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 NewStar Marine & Scooter: Growing a Family Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newstar Scooter to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats NewStar Marine & Scooter: Growing a Family Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NewStar Marine & Scooter: Growing a Family Business are -
Environmental challenges
– Newstar Scooter 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. Newstar Scooter can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Newstar Scooter 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 NewStar Marine & Scooter: Growing a Family Business .
Consumer confidence and its impact on Newstar Scooter 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Newstar Scooter will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Newstar Scooter.
Regulatory challenges
– Newstar Scooter 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 Sales & Marketing industry regulations.
High dependence on third party suppliers
– Newstar Scooter 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 Newstar Scooter
– 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 Newstar Scooter.
Shortening product life cycle
– it is one of the major threat that Newstar Scooter is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Newstar Scooter can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Newstar Scooter in the Sales & Marketing sector and impact the bottomline of the organization.
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. Newstar Scooter needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Newstar Scooter with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of NewStar Marine & Scooter: Growing a Family Business 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 NewStar Marine & Scooter: Growing a Family Business 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 NewStar Marine & Scooter: Growing a Family Business 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 NewStar Marine & Scooter: Growing a Family Business 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 NewStar Marine & Scooter: Growing a Family Business 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 Newstar Scooter needs to make to build a sustainable competitive advantage.
