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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, 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 -
Analytics focus
– Peninsula Holson 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 Jacqueline Walsh, Blair Winsor, Jose Lam 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.
Operational resilience
– The operational resilience strategy in the Holson Forest Products Ltd.: The Challenge of International Markets 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.
Training and development
– Peninsula Holson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Holson Forest Products Ltd.: The Challenge of International Markets 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 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.
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.
Successful track record of launching new products
– Peninsula Holson has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Peninsula Holson has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Holson Forest Products Ltd.: The Challenge of International Markets firm has clearly differentiated products in the market place. This has enabled Peninsula Holson to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Peninsula Holson to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Peninsula Holson 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.
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.
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.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Peninsula Holson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Holson Forest Products Ltd.: The Challenge of International Markets can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Holson Forest Products Ltd.: The Challenge of International Markets HBR case study mentions - Peninsula Holson 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.
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 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.
Interest costs
– Compare to the competition, Peninsula Holson 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Holson Forest Products Ltd.: The Challenge of International Markets 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 Peninsula Holson has relatively successful track record of launching new products.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Peninsula Holson is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Peninsula Holson needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Peninsula Holson to focus more on services rather than just following the product oriented approach.
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 Peninsula Holson supply chain. Even after few cautionary changes mentioned in the HBR case study - Holson Forest Products Ltd.: The Challenge of International Markets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Peninsula Holson vulnerable to further global disruptions in South East Asia.
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 -
Leveraging digital technologies
– Peninsula Holson can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Peninsula Holson can use these opportunities to build new business models that can help the communities that Peninsula Holson operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
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.
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.
Using analytics as competitive advantage
– Peninsula Holson 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 Holson Forest Products Ltd.: The Challenge of International Markets - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Peninsula Holson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Building a culture of innovation
– managers at Peninsula Holson 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 Leadership & Managing People segment.
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.
Buying journey improvements
– Peninsula Holson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Holson Forest Products Ltd.: The Challenge of International Markets suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Peninsula Holson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
Technology acceleration in Forth Industrial Revolution
– Peninsula Holson has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Peninsula Holson needs to keep up with the evolution of technology in the Leadership & Managing People 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 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Holson Forest Products Ltd.: The Challenge of International Markets, Peninsula Holson may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
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 Peninsula Holson.
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.
High dependence on third party suppliers
– Peninsula Holson 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.
Environmental challenges
– Peninsula Holson 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. Peninsula Holson can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Stagnating economy with rate increase
– Peninsula Holson 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.
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.
Consumer confidence and its impact on Peninsula Holson 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.
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.