Masonite International Corporation (B): Will KKR Slam the Door? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Masonite International Corporation (B): Will KKR Slam the Door?
It was February 16, 2005 and Edgar James, from Merrill Lynch, one of the leading investment banks, was reviewing the file regarding the leveraged buyout (LBO) of Masonite International Corporation (Masonite). A couple of months earlier, Kohlberg, Kravis and Roberts (KKR), one of the oldest and largest private equity firms, had teamed up with Masonite's senior managers and offered to take the company private via a US$2.52 billion LBO. A shareholder meeting to vote on the transaction was scheduled in less than 48 hours, but it was very likely that the deal would be voted down. Most of the major shareholders had already announced that they would reject the transaction, arguing that the premium offered by KKR was insufficient. As the head of Merrill Lynch's team working on the LBO, Edgar had to finalize his recommendation before talking to Masonite's Board of Directors. Was KKR about to walk out? After all, there were increasing concerns about the profitability and growth prospects of building products companies in general and Masonite in particular, due to the ever-increasing cost of raw materials, the negative impact of the tightening of monetary policy on consumer spending and mortgage rates, and the debatable health of the housing market. But Masonite was still one of the best-positioned companies in the industry, with strong earnings and cash flows. Would this be enough to entice KKR to increase their offer?
Swot Analysis of "Masonite International Corporation (B): Will KKR Slam the Door?" written by Barbara S. Petitt, F. John Mathis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Masonite Kkr facing as an external strategic factors. Some of the topics covered in Masonite International Corporation (B): Will KKR Slam the Door? case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Masonite International Corporation (B): Will KKR Slam the Door? casestudy better are - – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Masonite International Corporation (B): Will KKR Slam the Door?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Masonite International Corporation (B): Will KKR Slam the Door? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Masonite Kkr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Masonite Kkr 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 Masonite International Corporation (B): Will KKR Slam the Door? can be done for the following purposes –
1. Strategic planning using facts provided in Masonite International Corporation (B): Will KKR Slam the Door? case study
2. Improving business portfolio management of Masonite Kkr
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Masonite Kkr
Strengths Masonite International Corporation (B): Will KKR Slam the Door? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Masonite Kkr in Masonite International Corporation (B): Will KKR Slam the Door? Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Masonite Kkr digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Masonite Kkr 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.
Effective Research and Development (R&D)
– Masonite Kkr 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 Masonite International Corporation (B): Will KKR Slam the Door? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Masonite Kkr 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 Masonite International Corporation (B): Will KKR Slam the Door? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Masonite Kkr 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 Barbara S. Petitt, F. John Mathis 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
– Masonite Kkr is one of the most innovative firm in sector. Manager in Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite Kkr
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Masonite Kkr does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Masonite Kkr 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 Masonite Kkr is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Masonite International Corporation (B): Will KKR Slam the Door? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Masonite Kkr is present in almost all the verticals within the industry. This has provided firm in Masonite International Corporation (B): Will KKR Slam the Door? 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.
Superior customer experience
– The customer experience strategy of Masonite Kkr in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Finance & Accounting industry
– Masonite International Corporation (B): Will KKR Slam the Door? firm has clearly differentiated products in the market place. This has enabled Masonite Kkr to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Masonite Kkr to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Masonite Kkr 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 Masonite Kkr in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Masonite Kkr in the sector have low bargaining power. Masonite International Corporation (B): Will KKR Slam the Door? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Masonite Kkr to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Masonite International Corporation (B): Will KKR Slam the Door? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Masonite International Corporation (B): Will KKR Slam the Door? are -
Workers concerns about automation
– As automation is fast increasing in the segment, Masonite Kkr 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.
Skills based hiring
– The stress on hiring functional specialists at Masonite Kkr has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Masonite Kkr 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Masonite Kkr is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Masonite International Corporation (B): Will KKR Slam the Door? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite Kkr 's lucrative customers.
Slow to strategic competitive environment developments
– As Masonite International Corporation (B): Will KKR Slam the Door? HBR case study mentions - Masonite Kkr 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.
Need for greater diversity
– Masonite Kkr 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Masonite International Corporation (B): Will KKR Slam the Door?, is just above the industry average. Masonite Kkr 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.
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 Masonite Kkr supply chain. Even after few cautionary changes mentioned in the HBR case study - Masonite International Corporation (B): Will KKR Slam the Door?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Masonite Kkr vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite International Corporation (B): Will KKR Slam the Door? can leverage the sales team experience to cultivate customer relationships as Masonite Kkr is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Barbara S. Petitt, F. John Mathis suggests that, Masonite Kkr 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.
Opportunities Masonite International Corporation (B): Will KKR Slam the Door? | 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 Masonite International Corporation (B): Will KKR Slam the Door? are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Masonite Kkr can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Masonite Kkr 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, Masonite International Corporation (B): Will KKR Slam the Door?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Masonite Kkr to increase its market reach. Masonite Kkr 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Masonite Kkr can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Masonite Kkr 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.
Building a culture of innovation
– managers at Masonite Kkr 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 Finance & Accounting segment.
Manufacturing automation
– Masonite Kkr can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Masonite Kkr in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Masonite Kkr in the consumer business. Now Masonite Kkr can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Masonite Kkr 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 Masonite International Corporation (B): Will KKR Slam the Door? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Masonite Kkr to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Masonite Kkr is facing challenges because of the dominance of functional experts in the organization. Masonite International Corporation (B): Will KKR Slam the Door? 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.
Creating value in data economy
– The success of analytics program of Masonite Kkr has opened avenues for new revenue streams for the organization in the industry. This can help Masonite Kkr to build a more holistic ecosystem as suggested in the Masonite International Corporation (B): Will KKR Slam the Door? case study. Masonite Kkr can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Masonite Kkr 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.
Threats Masonite International Corporation (B): Will KKR Slam the Door? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Masonite International Corporation (B): Will KKR Slam the Door? 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.
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. Masonite Kkr needs to understand the core reasons impacting the Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Masonite Kkr can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Masonite Kkr
– 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 Masonite Kkr.
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 Masonite Kkr.
Shortening product life cycle
– it is one of the major threat that Masonite Kkr is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Masonite Kkr 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 Finance & Accounting 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 Masonite Kkr in the Finance & Accounting sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Masonite Kkr 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.
Stagnating economy with rate increase
– Masonite Kkr 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Masonite International Corporation (B): Will KKR Slam the Door?, Masonite Kkr may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Masonite Kkr with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite Kkr needs to make to build a sustainable competitive advantage.