Case Study Description of Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction
A businesswoman owned two franchised stores of Carpenter Tan Handicrafts Co., Ltd. (Carpenter Tan) in Panjin City, China. Carpenter Tan was a leader in the wooden crafts industry. When the first franchised store was set up in 2012, she was excited by and satisfied with Carpenter Tan's franchise model. However, after her second franchised store was set up in 2014, she felt that this franchise model was restricting her development and autonomy. In 2016, Carpenter Tan suggested that the businesswoman open a third franchised store in Panjin, where the wooden crafts market was close to saturation. The businesswoman, who had become dissatisfied with Carpenter Tan's franchise model, faced a tough choice about whether she should set up the third franchised store. Yibo Lyu is affiliated with Dalian University of Technology.
Authors :: Yibo Lyu, Shaojie Han, Wei Liu, Jingqin Su
Swot Analysis of "Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction" written by Yibo Lyu, Shaojie Han, Wei Liu, Jingqin Su includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carpenter Franchised facing as an external strategic factors. Some of the topics covered in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction case study are - Strategic Management Strategies, and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction casestudy better are - – increasing household debt because of falling income levels, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carpenter Franchised, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction can be done for the following purposes –
1. Strategic planning using facts provided in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction case study
2. Improving business portfolio management of Carpenter Franchised
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Carpenter Franchised
Strengths Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carpenter Franchised in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction Harvard Business Review case study are -
Learning organization
- Carpenter Franchised 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 Carpenter Franchised is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Carpenter Franchised is one of the leading recruiters in the industry. Managers in the Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Carpenter Franchised digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Carpenter Franchised 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 Carpenter Franchised
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Carpenter Franchised does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Carpenter Franchised in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Carpenter Franchised 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 Yibo Lyu, Shaojie Han, Wei Liu, Jingqin Su 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.
Diverse revenue streams
– Carpenter Franchised is present in almost all the verticals within the industry. This has provided firm in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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.
Strong track record of project management
– Carpenter Franchised is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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.
High switching costs
– The high switching costs that Carpenter Franchised 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.
Successful track record of launching new products
– Carpenter Franchised has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carpenter Franchised 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.
Weaknesses Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction are -
Workers concerns about automation
– As automation is fast increasing in the segment, Carpenter Franchised 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.
High cash cycle compare to competitors
Carpenter Franchised 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.
Low market penetration in new markets
– Outside its home market of Carpenter Franchised, firm in the HBR case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Franchised has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, in the dynamic environment Carpenter Franchised has struggled to respond to the nimble upstart competition. Carpenter Franchised has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Carpenter Franchised supply chain. Even after few cautionary changes mentioned in the HBR case study - Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Carpenter Franchised vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Carpenter Franchised products
– To increase the profitability and margins on the products, Carpenter Franchised needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Carpenter Franchised 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.
Products dominated business model
– Even though Carpenter Franchised 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 - Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction can leverage the sales team experience to cultivate customer relationships as Carpenter Franchised is planning to shift buying processes online.
Opportunities Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction | 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Carpenter Franchised in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Buying journey improvements
– Carpenter Franchised can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carpenter Franchised can use these opportunities to build new business models that can help the communities that Carpenter Franchised operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Carpenter Franchised can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Carpenter Franchised 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, Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Carpenter Franchised has opened avenues for new revenue streams for the organization in the industry. This can help Carpenter Franchised to build a more holistic ecosystem as suggested in the Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction case study. Carpenter Franchised 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 Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Carpenter Franchised 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. Carpenter Franchised 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Carpenter Franchised 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 Carpenter Franchised to hire the very best people irrespective of their geographical location.
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 Carpenter Franchised 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.
Manufacturing automation
– Carpenter Franchised can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Carpenter Franchised can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Carpenter Franchised 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 Innovation & Entrepreneurship segment.
Developing new processes and practices
– Carpenter Franchised can develop new processes and procedures in Innovation & Entrepreneurship 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.
Threats Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction are -
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.
Stagnating economy with rate increase
– Carpenter Franchised 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 acceleration in Forth Industrial Revolution
– Carpenter Franchised has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Carpenter Franchised needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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. Carpenter Franchised needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Carpenter Franchised can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Carpenter Franchised 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. Carpenter Franchised can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Carpenter Franchised business can come under increasing regulations regarding data privacy, data security, etc.
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 Carpenter Franchised.
Consumer confidence and its impact on Carpenter Franchised 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.
Regulatory challenges
– Carpenter Franchised 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 Innovation & Entrepreneurship industry regulations.
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 Carpenter Franchised in the Innovation & Entrepreneurship sector and impact the bottomline 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 Carpenter Franchised in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Carpenter Franchised is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Franchised needs to make to build a sustainable competitive advantage.
