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 - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing energy prices, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, 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 -
Innovation driven organization
– Monmouth Rubber is one of the most innovative firm in sector. Manager in Monmouth Rubber & Plastics Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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.
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.
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.
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.
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.
Analytics focus
– Monmouth Rubber 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 Stuart Rosenberg 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.
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.
Effective Research and Development (R&D)
– Monmouth Rubber 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 Monmouth Rubber & Plastics - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Monmouth Rubber & Plastics 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 Monmouth Rubber has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Monmouth Rubber is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Monmouth Rubber needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Monmouth Rubber to focus more on services rather than just following the product oriented approach.
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.
Low market penetration in new markets
– Outside its home market of Monmouth Rubber, firm in the HBR case study Monmouth Rubber & Plastics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Capital Spending Reduction
– Even during the low interest decade, Monmouth Rubber 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.
Slow to strategic competitive environment developments
– As Monmouth Rubber & Plastics HBR case study mentions - Monmouth Rubber takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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 -
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Monmouth Rubber has opened avenues for new revenue streams for the organization in the industry. This can help Monmouth Rubber to build a more holistic ecosystem as suggested in the Monmouth Rubber & Plastics case study. Monmouth Rubber can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
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 Monmouth Rubber in the consumer business. Now Monmouth Rubber can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
Regulatory challenges
– Monmouth Rubber 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 Organizational Development industry regulations.
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 .
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.
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.
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.
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.
Consumer confidence and its impact on Monmouth Rubber 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.
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.
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.
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.
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.