Case Study Description of Monmouth Rubber & Plastics
John Bonforte, the owner and president of Monmouth Rubber & Plastics, a small private rubber manufacturing company in Long Branch, New Jersey, needed to decide whether to accept an offer from a potential buyer for the business. Monmouth had been a successful company with a strong family culture since John founded it in 1964, but now in 2008 there were a number of factors that gave him reason for concern and to consider whether it was time to sell. The world economy was showing signs of slowing down. Other rubber manufacturers were forced to close down. The long term sales forecast for Monmouth was not promising. Further, the city of Long Branch, which had been in decline for years, had established a redevelopment zone for the oceanfront and its adjacent neighborhoods in 1996. The city determined that it would invoke eminent domain for properties within the redevelopment zone in need of improvement. The private homeowners and commercial business owners who were located in the designated area, including Monmouth Rubber, were compelled to negotiate with a property developer that had been contracted by the city. Many property owners refused to sell, and the case was on appeal with the New Jersey Superior Court. This created significant uncertainty surrounding Monmouth Rubber's ability to remain in its current location. At 67, John could sell the business and retire. Although his son, John Jr., had been employed by Monmouth for several years and was the firm's sales manager, there was no formal succession plan. John Jr., however, had expressed an interest in taking over the business. With a lucrative offer on the table, John needed to consider the changing competitive landscape for the industry, the weakened economic conditions, and the eminent domain. This case is suitable for courses in family business management, and it can be especially useful as an introductory case or as a second case.
Swot Analysis of "Monmouth Rubber & Plastics" written by Stuart Rosenberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Monmouth Rubber facing as an external strategic factors. Some of the topics covered in Monmouth Rubber & Plastics case study are - Strategic Management Strategies, Generational issues, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Monmouth Rubber & Plastics casestudy better are - – there is backlash against globalization, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, wage bills are increasing,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Monmouth Rubber & Plastics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Monmouth Rubber & Plastics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Monmouth Rubber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Monmouth Rubber 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 Monmouth Rubber & Plastics can be done for the following purposes –
1. Strategic planning using facts provided in Monmouth Rubber & Plastics case study
2. Improving business portfolio management of Monmouth Rubber
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Monmouth Rubber
Strengths Monmouth Rubber & Plastics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Monmouth Rubber in Monmouth Rubber & Plastics Harvard Business Review case study are -
Ability to recruit top talent
– Monmouth Rubber is one of the leading recruiters in the industry. Managers in the Monmouth Rubber & Plastics 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 Monmouth Rubber in the sector have low bargaining power. Monmouth Rubber & Plastics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Monmouth Rubber to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Monmouth Rubber is present in almost all the verticals within the industry. This has provided firm in Monmouth Rubber & Plastics 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.
Operational resilience
– The operational resilience strategy in the Monmouth Rubber & Plastics Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Monmouth Rubber is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Organizational Development field
– Monmouth Rubber 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 Monmouth Rubber in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Monmouth Rubber in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Monmouth Rubber digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Monmouth Rubber 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.
Learning organization
- Monmouth Rubber 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 Monmouth Rubber is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Monmouth Rubber & Plastics Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Monmouth Rubber 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 Monmouth Rubber & Plastics HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Monmouth Rubber 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.
Organizational Resilience of Monmouth Rubber
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Monmouth Rubber does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Monmouth Rubber & Plastics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Monmouth Rubber & Plastics are -
No frontier risks strategy
– After analyzing the HBR case study Monmouth Rubber & Plastics, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on 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 Monmouth Rubber supply chain. Even after few cautionary changes mentioned in the HBR case study - Monmouth Rubber & Plastics, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Monmouth Rubber vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Monmouth Rubber 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Monmouth Rubber & Plastics, it seems that the employees of Monmouth Rubber 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Monmouth Rubber & Plastics 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 Monmouth Rubber 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Monmouth Rubber 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.
Need for greater diversity
– Monmouth Rubber 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Monmouth Rubber & Plastics, in the dynamic environment Monmouth Rubber has struggled to respond to the nimble upstart competition. Monmouth Rubber has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Monmouth Rubber 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. Monmouth Rubber 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.
Aligning sales with marketing
– It come across in the case study Monmouth Rubber & Plastics 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 Monmouth Rubber & Plastics can leverage the sales team experience to cultivate customer relationships as Monmouth Rubber is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Monmouth Rubber & Plastics, is just above the industry average. Monmouth Rubber 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 Monmouth Rubber & Plastics | 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 Monmouth Rubber & Plastics are -
Building a culture of innovation
– managers at Monmouth Rubber 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 Organizational Development segment.
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 Monmouth Rubber 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Monmouth Rubber can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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. Monmouth Rubber can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Monmouth Rubber is facing challenges because of the dominance of functional experts in the organization. Monmouth Rubber & Plastics 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Monmouth Rubber can use these opportunities to build new business models that can help the communities that Monmouth Rubber operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Better consumer reach
– The expansion of the 5G network will help Monmouth Rubber to increase its market reach. Monmouth Rubber 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.
Using analytics as competitive advantage
– Monmouth Rubber 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 Monmouth Rubber & Plastics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Monmouth Rubber to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Monmouth Rubber can develop new processes and procedures in Organizational Development 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Monmouth Rubber can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Monmouth Rubber 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Monmouth Rubber in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development 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 Organizational Development industry, but it has also influenced the consumer preferences. Monmouth Rubber can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Monmouth Rubber & Plastics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Monmouth Rubber & Plastics are -
High dependence on third party suppliers
– Monmouth Rubber 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Monmouth Rubber 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 Monmouth Rubber & Plastics .
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 Monmouth Rubber.
Environmental challenges
– Monmouth Rubber 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. Monmouth Rubber can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Monmouth Rubber 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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Monmouth Rubber can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Monmouth Rubber
– 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 Monmouth Rubber.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Monmouth Rubber & Plastics, Monmouth Rubber may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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. Monmouth Rubber needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Monmouth Rubber has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Monmouth Rubber needs to keep up with the evolution of technology in the Organizational Development 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.
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 Monmouth Rubber in the Organizational Development sector and impact the bottomline of the organization.
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 Monmouth Rubber business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Monmouth Rubber & Plastics 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 Monmouth Rubber & Plastics 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 Monmouth Rubber & Plastics 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 Monmouth Rubber & Plastics 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 Monmouth Rubber & Plastics 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 Monmouth Rubber needs to make to build a sustainable competitive advantage.
