County Line Markets: Real Options and Store Expansions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of County Line Markets: Real Options and Store Expansions
County Line Markets (CLM) needed to consider expanding one of its existing sixty-seven Indiana based stores to form a superstore. The key capital investment trade-off decision facing CLM was whether to replace its existing store now with a new, larger superstore, or should they wait in the hope that additional information they might receive in the future would enhance the overall net present value (NPV) of the project. Ron Winston, CFO, was considering whether a real options approach should be used to help determine when and if the store should be converted to a superstore. This case focuses on CLM's evaluation of its downtown metro area location. Although the specific circumstances of each location were different, the analytical and judgmental issues facing CLM's management for the upgrade to a superstore were typical of the issues present at each location. The CLM store under evaluation is located in an area where the demographics, population, and competitive landscape have changed dramatically since the store was last remodeled. The chief financial officer (CFO) Ron Winston thinks that it is premature to invest substantial sums of money in some existing locations because they are still in a state of flux, and he feels it is better to wait until the market stabilizes before committing large amounts of funds to these markets. Jerry Williams, vice president of operations, thinks that CLM needs to invest in advance of market changes. Williams also believes that Winston is not considering competitive developments in his analysis; that is, the impact on the downtown metro area store if the competition moves to a superstore first.
Authors :: Tom J. Cook, Lou D'Antonio, Ron Rizzuto
Swot Analysis of "County Line Markets: Real Options and Store Expansions" written by Tom J. Cook, Lou D'Antonio, Ron Rizzuto includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Superstore Clm facing as an external strategic factors. Some of the topics covered in County Line Markets: Real Options and Store Expansions case study are - Strategic Management Strategies, Business models, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the County Line Markets: Real Options and Store Expansions casestudy better are - – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of County Line Markets: Real Options and Store Expansions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in County Line Markets: Real Options and Store Expansions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Superstore Clm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Superstore Clm 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 County Line Markets: Real Options and Store Expansions can be done for the following purposes –
1. Strategic planning using facts provided in County Line Markets: Real Options and Store Expansions case study
2. Improving business portfolio management of Superstore Clm
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 Superstore Clm
Strengths County Line Markets: Real Options and Store Expansions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Superstore Clm in County Line Markets: Real Options and Store Expansions Harvard Business Review case study are -
High switching costs
– The high switching costs that Superstore Clm 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.
Organizational Resilience of Superstore Clm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Superstore Clm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Superstore Clm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in County Line Markets: Real Options and Store Expansions 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.
Highly skilled collaborators
– Superstore Clm 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 County Line Markets: Real Options and Store Expansions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Superstore Clm is present in almost all the verticals within the industry. This has provided firm in County Line Markets: Real Options and Store Expansions 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.
Cross disciplinary teams
– Horizontal connected teams at the Superstore Clm 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.
Effective Research and Development (R&D)
– Superstore Clm 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 County Line Markets: Real Options and Store Expansions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Superstore Clm is one of the leading recruiters in the industry. Managers in the County Line Markets: Real Options and Store Expansions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Finance & Accounting field
– Superstore Clm 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 Superstore Clm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– County Line Markets: Real Options and Store Expansions firm has clearly differentiated products in the market place. This has enabled Superstore Clm to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Superstore Clm to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Superstore Clm in the sector have low bargaining power. County Line Markets: Real Options and Store Expansions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Superstore Clm to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Superstore Clm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses County Line Markets: Real Options and Store Expansions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of County Line Markets: Real Options and Store Expansions are -
Slow to strategic competitive environment developments
– As County Line Markets: Real Options and Store Expansions HBR case study mentions - Superstore Clm 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.
Low market penetration in new markets
– Outside its home market of Superstore Clm, firm in the HBR case study County Line Markets: Real Options and Store Expansions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study County Line Markets: Real Options and Store Expansions, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Need for greater diversity
– Superstore Clm 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study County Line Markets: Real Options and Store Expansions, in the dynamic environment Superstore Clm has struggled to respond to the nimble upstart competition. Superstore Clm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Superstore Clm 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 bargaining power of channel partners
– Because of the regulatory requirements, Tom J. Cook, Lou D'Antonio, Ron Rizzuto suggests that, Superstore Clm 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.
Lack of clear differentiation of Superstore Clm products
– To increase the profitability and margins on the products, Superstore Clm needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Superstore Clm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study County Line Markets: Real Options and Store Expansions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Superstore Clm 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.
Capital Spending Reduction
– Even during the low interest decade, Superstore Clm 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.
Opportunities County Line Markets: Real Options and Store Expansions | 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 County Line Markets: Real Options and Store Expansions are -
Manufacturing automation
– Superstore Clm 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.
Building a culture of innovation
– managers at Superstore Clm 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.
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 Superstore Clm 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.
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. Superstore Clm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Superstore Clm can use these opportunities to build new business models that can help the communities that Superstore Clm operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Superstore Clm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Superstore Clm 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.
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. Superstore Clm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Superstore Clm to increase its market reach. Superstore Clm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Superstore Clm 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.
Developing new processes and practices
– Superstore Clm 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.
Using analytics as competitive advantage
– Superstore Clm 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 County Line Markets: Real Options and Store Expansions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Superstore Clm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Superstore Clm 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.
Threats County Line Markets: Real Options and Store Expansions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study County Line Markets: Real Options and Store Expansions are -
Regulatory challenges
– Superstore Clm 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.
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. Superstore Clm needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Environmental challenges
– Superstore Clm 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. Superstore Clm can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Superstore Clm business can come under increasing regulations regarding data privacy, data security, etc.
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 Superstore Clm in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Superstore Clm has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Superstore Clm 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.
High dependence on third party suppliers
– Superstore Clm 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.
Consumer confidence and its impact on Superstore Clm 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.
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.
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 Superstore Clm.
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. Superstore Clm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Superstore Clm is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study County Line Markets: Real Options and Store Expansions, Superstore Clm 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 .
Weighted SWOT Analysis of County Line Markets: Real Options and Store Expansions 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 County Line Markets: Real Options and Store Expansions 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 County Line Markets: Real Options and Store Expansions 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 County Line Markets: Real Options and Store Expansions 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 County Line Markets: Real Options and Store Expansions 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 Superstore Clm needs to make to build a sustainable competitive advantage.
