Holson Forest Products Ltd.: The Challenge of International Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Holson Forest Products Ltd.: The Challenge of International Markets
This case is set in June 2016. Ted Lewis is the owner of Holson Forest Products Ltd. (Holson), one of the largest suppliers of lumber on the Northern Peninsula. In 2008, due to increased shipping costs, Holson's largest customer, Corner Brook Pulp and Paper Ltd. (CBPPL), decided to stop buying logs from the Northern Peninsula. Following CBPPL's decision, Lewis was forced to diversify his business. In 2011, after a feasibility study confirmed the potential of opening a wood pellet plant to produce finished products for local, national, and/or international markets, a pellet plant was completed in a remote area of the Northern Peninsula. Unfortunately, the lack of nearby port facilities to ship the product to international markets prevented the company from launching full production. In addition, because forested lands on the Northern Peninsula were not certified as sustainable forests, Holson's premium products could not be sold to residential markets in Europe. Lewis was faced with many challenges in an uncertain global market. Lewis needed a strategy that would allow him to confidently launch production of wood pellets. His strategic analysis had to take into account both external markets and internal issues related to resources, operations, marketing, human resources, and the management challenges of sustaining a business in rural Newfoundland. It also had to consider Lewis's values and commitment to the people of the Northern Peninsula.
Authors :: Jacqueline Walsh, Blair Winsor, Jose Lam
Swot Analysis of "Holson Forest Products Ltd.: The Challenge of International Markets" written by Jacqueline Walsh, Blair Winsor, Jose Lam includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Peninsula Holson facing as an external strategic factors. Some of the topics covered in Holson Forest Products Ltd.: The Challenge of International Markets case study are - Strategic Management Strategies, Growth strategy, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Holson Forest Products Ltd.: The Challenge of International Markets casestudy better are - – wage bills are increasing, technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Holson Forest Products Ltd.: The Challenge of International Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Holson Forest Products Ltd.: The Challenge of International Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Peninsula Holson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Peninsula Holson operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Holson Forest Products Ltd.: The Challenge of International Markets can be done for the following purposes –
1. Strategic planning using facts provided in Holson Forest Products Ltd.: The Challenge of International Markets case study
2. Improving business portfolio management of Peninsula Holson
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Peninsula Holson
Strengths Holson Forest Products Ltd.: The Challenge of International Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Peninsula Holson in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study are -
Highly skilled collaborators
– Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Peninsula Holson is one of the most innovative firm in sector. Manager in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Peninsula Holson is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Peninsula Holson in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Peninsula Holson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Peninsula Holson is present in almost all the verticals within the industry. This has provided firm in Holson Forest Products Ltd.: The Challenge of International Markets 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.
Effective Research and Development (R&D)
– Peninsula Holson has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Holson Forest Products Ltd.: The Challenge of International Markets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Peninsula Holson is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Peninsula Holson is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Holson Forest Products Ltd.: The Challenge of International Markets Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Peninsula Holson in the sector have low bargaining power. Holson Forest Products Ltd.: The Challenge of International Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Peninsula Holson to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Peninsula Holson in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Peninsula Holson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Peninsula Holson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Peninsula Holson is one of the leading recruiters in the industry. Managers in the Holson Forest Products Ltd.: The Challenge of International Markets are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Peninsula Holson has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Peninsula Holson to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Holson Forest Products Ltd.: The Challenge of International Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Holson Forest Products Ltd.: The Challenge of International Markets are -
Lack of clear differentiation of Peninsula Holson products
– To increase the profitability and margins on the products, Peninsula Holson needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets, is just above the industry average. Peninsula Holson 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.
Skills based hiring
– The stress on hiring functional specialists at Peninsula Holson has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Peninsula Holson has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Peninsula Holson has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Jacqueline Walsh, Blair Winsor, Jose Lam suggests that, Peninsula Holson 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.
Products dominated business model
– Even though Peninsula Holson 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 - Holson Forest Products Ltd.: The Challenge of International Markets should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Holson Forest Products Ltd.: The Challenge of International Markets, in the dynamic environment Peninsula Holson has struggled to respond to the nimble upstart competition. Peninsula Holson 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, Peninsula Holson 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. Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Holson Forest Products Ltd.: The Challenge of International Markets can leverage the sales team experience to cultivate customer relationships as Peninsula Holson is planning to shift buying processes online.
Opportunities Holson Forest Products Ltd.: The Challenge of International Markets | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Holson Forest Products Ltd.: The Challenge of International Markets are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Peninsula Holson 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Peninsula Holson is facing challenges because of the dominance of functional experts in the organization. Holson Forest Products Ltd.: The Challenge of International Markets 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.
Learning at scale
– Online learning technologies has now opened space for Peninsula Holson 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Peninsula Holson can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Holson Forest Products Ltd.: The Challenge of International Markets, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Peninsula Holson to increase its market reach. Peninsula Holson will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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. Peninsula Holson can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Peninsula Holson has opened avenues for new revenue streams for the organization in the industry. This can help Peninsula Holson to build a more holistic ecosystem as suggested in the Holson Forest Products Ltd.: The Challenge of International Markets case study. Peninsula Holson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Peninsula Holson in the consumer business. Now Peninsula Holson can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Peninsula Holson to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Peninsula Holson to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Peninsula Holson to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Peninsula Holson can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Peninsula Holson can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Peninsula Holson can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Peninsula Holson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Holson Forest Products Ltd.: The Challenge of International Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets are -
Shortening product life cycle
– it is one of the major threat that Peninsula Holson is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Peninsula Holson business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Peninsula Holson 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 Leadership & Managing People industry regulations.
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.
Increasing wage structure of Peninsula Holson
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Peninsula Holson.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Peninsula Holson needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Peninsula Holson 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Peninsula Holson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Peninsula Holson with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Peninsula Holson in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Peninsula Holson in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Peninsula Holson can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Holson Forest Products Ltd.: The Challenge of International Markets .
Weighted SWOT Analysis of Holson Forest Products Ltd.: The Challenge of International Markets Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Holson Forest Products Ltd.: The Challenge of International Markets needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Holson Forest Products Ltd.: The Challenge of International Markets is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Holson Forest Products Ltd.: The Challenge of International Markets is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Holson Forest Products Ltd.: The Challenge of International Markets is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Peninsula Holson needs to make to build a sustainable competitive advantage.
