Case Study Description of Classic Fixtures & Hardware Company
Classic Fixtures & Hardware Company is a nationally-known manufacturer and distributor of kitchen and bathroom fixtures and trim, as well as lock sets and hardware for doors and windows. The company is privately held and has limited access to capital markets, so it depends on a loan facility with Southwest National Bank to finance its seasonal working capital needs. Level production and seasonal sales result in higher inventory levels and loan balances in the first half of the year and declining inventory and loan balances in the second half of the year. In 2008, Classic's loan balances have grown beyond forecasted amounts, and its CFO believes that Classic will likely be unable to pay off the loan balance before the end of the year. The CFO and a senior loan officer from Southwest have scheduled a meeting in order to determine both the reasons for this problem and what Classic might do to turn itself around.
Swot Analysis of "Classic Fixtures & Hardware Company" written by W. Carl Kester, Craig Stephenson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Loan Fixtures facing as an external strategic factors. Some of the topics covered in Classic Fixtures & Hardware Company case study are - Strategic Management Strategies, Financial analysis, Forecasting, Leadership, Manufacturing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Classic Fixtures & Hardware Company casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Classic Fixtures & Hardware Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Classic Fixtures & Hardware Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Loan Fixtures, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Loan Fixtures 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 Classic Fixtures & Hardware Company can be done for the following purposes –
1. Strategic planning using facts provided in Classic Fixtures & Hardware Company case study
2. Improving business portfolio management of Loan Fixtures
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 Loan Fixtures
Strengths Classic Fixtures & Hardware Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Loan Fixtures in Classic Fixtures & Hardware Company Harvard Business Review case study are -
Ability to lead change in Finance & Accounting field
– Loan Fixtures 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 Loan Fixtures in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Loan Fixtures 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.
Superior customer experience
– The customer experience strategy of Loan Fixtures in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Loan Fixtures is present in almost all the verticals within the industry. This has provided firm in Classic Fixtures & Hardware Company 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.
Operational resilience
– The operational resilience strategy in the Classic Fixtures & Hardware Company 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.
Successful track record of launching new products
– Loan Fixtures has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Loan Fixtures 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.
Analytics focus
– Loan Fixtures 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 W. Carl Kester, Craig Stephenson 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.
High brand equity
– Loan Fixtures has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Loan Fixtures to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Classic Fixtures & Hardware Company firm has clearly differentiated products in the market place. This has enabled Loan Fixtures to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Loan Fixtures to invest into research and development (R&D) and innovation.
Innovation driven organization
– Loan Fixtures is one of the most innovative firm in sector. Manager in Classic Fixtures & Hardware Company 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 Loan Fixtures
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Loan Fixtures does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Loan Fixtures 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 Loan Fixtures is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Classic Fixtures & Hardware Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Classic Fixtures & Hardware Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Classic Fixtures & Hardware Company are -
Lack of clear differentiation of Loan Fixtures products
– To increase the profitability and margins on the products, Loan Fixtures needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Loan Fixtures supply chain. Even after few cautionary changes mentioned in the HBR case study - Classic Fixtures & Hardware Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Loan Fixtures vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Loan Fixtures is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Loan Fixtures needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Loan Fixtures to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Classic Fixtures & Hardware Company 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 Classic Fixtures & Hardware Company can leverage the sales team experience to cultivate customer relationships as Loan Fixtures is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Classic Fixtures & Hardware Company HBR case study mentions - Loan Fixtures 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.
Interest costs
– Compare to the competition, Loan Fixtures 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Loan Fixtures is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Classic Fixtures & Hardware Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Loan Fixtures 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 - Classic Fixtures & Hardware Company should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Loan Fixtures, firm in the HBR case study Classic Fixtures & Hardware Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Loan Fixtures 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. Loan Fixtures 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Classic Fixtures & Hardware Company 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 Loan Fixtures 's lucrative customers.
Opportunities Classic Fixtures & Hardware Company | 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 Classic Fixtures & Hardware Company are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Loan Fixtures 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.
Using analytics as competitive advantage
– Loan Fixtures 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 Classic Fixtures & Hardware Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Loan Fixtures to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Loan Fixtures can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Classic Fixtures & Hardware Company 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Loan Fixtures can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Loan Fixtures is facing challenges because of the dominance of functional experts in the organization. Classic Fixtures & Hardware Company 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.
Loyalty marketing
– Loan Fixtures 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.
Creating value in data economy
– The success of analytics program of Loan Fixtures has opened avenues for new revenue streams for the organization in the industry. This can help Loan Fixtures to build a more holistic ecosystem as suggested in the Classic Fixtures & Hardware Company case study. Loan Fixtures can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Loan Fixtures 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.
Better consumer reach
– The expansion of the 5G network will help Loan Fixtures to increase its market reach. Loan Fixtures 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.
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. Loan Fixtures 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. Loan Fixtures 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.
Learning at scale
– Online learning technologies has now opened space for Loan Fixtures 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.
Leveraging digital technologies
– Loan Fixtures 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.
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. Loan Fixtures can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Classic Fixtures & Hardware Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Classic Fixtures & Hardware Company are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Loan Fixtures in the Finance & Accounting industry. The Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Loan Fixtures with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Loan Fixtures has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Loan Fixtures needs to keep up with the evolution of technology in the Finance & Accounting 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.
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 Loan Fixtures.
Regulatory challenges
– Loan Fixtures 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Classic Fixtures & Hardware Company, Loan Fixtures 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 .
High dependence on third party suppliers
– Loan Fixtures 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.
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. Loan Fixtures can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Loan Fixtures needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Loan Fixtures 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 Classic Fixtures & Hardware Company .
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.
Consumer confidence and its impact on Loan Fixtures 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.
Stagnating economy with rate increase
– Loan Fixtures 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.
Weighted SWOT Analysis of Classic Fixtures & Hardware Company 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 Classic Fixtures & Hardware Company 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 Classic Fixtures & Hardware Company 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 Classic Fixtures & Hardware Company 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 Classic Fixtures & Hardware Company 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 Loan Fixtures needs to make to build a sustainable competitive advantage.
