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 - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
wage bills are increasing, there is increasing trade war between United States & China, 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 -
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Carpenter Franchised 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.
Innovation driven organization
– Carpenter Franchised is one of the most innovative firm in sector. Manager in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Effective Research and Development (R&D)
– Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction firm has clearly differentiated products in the market place. This has enabled Carpenter Franchised to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Carpenter Franchised to invest into research and development (R&D) and innovation.
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.
High brand equity
– Carpenter Franchised has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Carpenter Franchised to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Yibo Lyu, Shaojie Han, Wei Liu, Jingqin Su suggests that, Carpenter Franchised 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.
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.
Increasing silos among functional specialists
– The organizational structure of Carpenter Franchised is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Carpenter Franchised needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Carpenter Franchised to focus more on services rather than just following the product oriented approach.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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 Carpenter Franchised 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carpenter Franchised is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Carpenter Franchised 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 decision making process
– As mentioned earlier in the report, Carpenter Franchised 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. Carpenter Franchised 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 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.
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.
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 -
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Carpenter Franchised is facing challenges because of the dominance of functional experts in the organization. Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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.
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.
Using analytics as competitive advantage
– Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carpenter Franchised to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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 Carpenter Franchised in the consumer business. Now Carpenter Franchised 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 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.
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.
Learning at scale
– Online learning technologies has now opened space for Carpenter Franchised 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.
Loyalty marketing
– Carpenter Franchised has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Carpenter Franchised to increase its market reach. Carpenter Franchised 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.
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 -
High dependence on third party suppliers
– Carpenter Franchised 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Carpenter Franchised 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 Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction .
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.
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.
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.
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.
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. Carpenter Franchised 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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Carpenter Franchised 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 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.
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.