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, increasing commodity prices, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, 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 -
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.
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.
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.
Training and development
– Carpenter Franchised has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, is just above the industry average. Carpenter Franchised 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.
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.
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.
Need for greater diversity
– Carpenter Franchised has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
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.
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.
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.
Leveraging digital technologies
– Carpenter Franchised 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.
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.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Carpenter Franchised 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.
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.
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 -
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.
Increasing wage structure of Carpenter Franchised
– 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 Carpenter Franchised.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Carpenter Tan Handicrafts Co., Ltd.: Franchisee Satisfaction, Carpenter Franchised may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
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.
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.
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.
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.
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.
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.