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 - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Sustainable margins compare to other players in Organizational Development industry
– Monmouth Rubber & Plastics firm has clearly differentiated products in the market place. This has enabled Monmouth Rubber to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Monmouth Rubber to invest into research and development (R&D) and innovation.
Training and development
– Monmouth Rubber has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Monmouth Rubber & Plastics Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
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.
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.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Monmouth Rubber has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to 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.
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 -
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.
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.
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.
Lack of clear differentiation of Monmouth Rubber products
– To increase the profitability and margins on the products, Monmouth Rubber needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Monmouth Rubber is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Monmouth Rubber & Plastics 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
Monmouth Rubber 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.
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.
Interest costs
– Compare to the competition, Monmouth Rubber 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stuart Rosenberg suggests that, Monmouth Rubber 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.
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.
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 -
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.
Manufacturing automation
– Monmouth Rubber can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Monmouth Rubber 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 Monmouth Rubber to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Monmouth Rubber 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Monmouth Rubber 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, Monmouth Rubber & Plastics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Monmouth Rubber 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. Monmouth Rubber 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
– 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.
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.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Monmouth Rubber is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Monmouth Rubber in the Organizational Development industry. The Organizational Development 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Monmouth Rubber with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 .
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Monmouth Rubber.
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.
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.