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 - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Masonite Kkr 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.
Operational resilience
– The operational resilience strategy in the Masonite International Corporation (B): Will KKR Slam the Door? 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.
Strong track record of project management
– Masonite Kkr is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Masonite Kkr has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Masonite International Corporation (B): Will KKR Slam the Door? 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.
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.
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.
Successful track record of launching new products
– Masonite Kkr has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Masonite Kkr 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.
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.
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.
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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Masonite International Corporation (B): Will KKR Slam the Door? 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 Masonite Kkr has relatively successful track record of launching new products.
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.
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.
Products dominated business model
– Even though Masonite Kkr 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 - Masonite International Corporation (B): Will KKR Slam the Door? should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Masonite Kkr 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.
Interest costs
– Compare to the competition, Masonite Kkr 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.
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.
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 -
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 Masonite Kkr 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.
Learning at scale
– Online learning technologies has now opened space for Masonite Kkr 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.
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.
Leveraging digital technologies
– Masonite Kkr 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.
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.
Developing new processes and practices
– Masonite Kkr can develop new processes and procedures in Finance & Accounting 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Masonite Kkr 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. Masonite Kkr 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Masonite Kkr can use these opportunities to build new business models that can help the communities that Masonite Kkr operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Masonite Kkr can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Masonite International Corporation (B): Will KKR Slam the Door? 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Masonite Kkr 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 Masonite Kkr to hire the very best people irrespective of their geographical location.
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 -
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. Masonite Kkr will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Masonite Kkr 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.
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 .
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.
Environmental challenges
– Masonite Kkr 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. Masonite Kkr can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Masonite Kkr needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Masonite Kkr 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 Masonite International Corporation (B): Will KKR Slam the Door? .
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 Masonite Kkr business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.