City Furniture and Mattress (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of City Furniture and Mattress (B)
This is part of the subset of Ivey cases and technical notes written for Introductory-Level courses.The majority owner and general manager of City Furniture and Mattress (CFM), was concerned about the difficulties facing the company. His decision to pursue vertical integration and the manufacturing of some domestic products did not seem to be working as planned. In addition, he faced a legal battle with the building owner of the Pickering location. The future of CFM was at stake. The general manager wondered if they should close some locations and take care of some of the short term problems or consider leaving the furniture business altogether.
Swot Analysis of "City Furniture and Mattress (B)" written by W. Glenn Rowe, Bobby Singh-Randhawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Furniture Cfm facing as an external strategic factors. Some of the topics covered in City Furniture and Mattress (B) case study are - Strategic Management Strategies, Financial management, Growth strategy, International business, Mergers & acquisitions, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the City Furniture and Mattress (B) casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, technology disruption, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of City Furniture and Mattress (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in City Furniture and Mattress (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Furniture Cfm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Furniture Cfm 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 City Furniture and Mattress (B) can be done for the following purposes –
1. Strategic planning using facts provided in City Furniture and Mattress (B) case study
2. Improving business portfolio management of Furniture Cfm
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Furniture Cfm
Strengths City Furniture and Mattress (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Furniture Cfm in City Furniture and Mattress (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– City Furniture and Mattress (B) firm has clearly differentiated products in the market place. This has enabled Furniture Cfm to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Furniture Cfm to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Furniture Cfm 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Furniture Cfm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Furniture Cfm 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.
Organizational Resilience of Furniture Cfm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Furniture Cfm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Furniture Cfm in the sector have low bargaining power. City Furniture and Mattress (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Furniture Cfm to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the City Furniture and Mattress (B) 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.
High brand equity
– Furniture Cfm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Furniture Cfm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Furniture Cfm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in City Furniture and Mattress (B) 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.
Ability to recruit top talent
– Furniture Cfm is one of the leading recruiters in the industry. Managers in the City Furniture and Mattress (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Furniture Cfm is present in almost all the verticals within the industry. This has provided firm in City Furniture and Mattress (B) 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.
Strong track record of project management
– Furniture Cfm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Furniture Cfm 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. Glenn Rowe, Bobby Singh-Randhawa 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.
Weaknesses City Furniture and Mattress (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of City Furniture and Mattress (B) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Furniture Cfm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study City Furniture and Mattress (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study City Furniture and Mattress (B), it seems that company is thinking about the frontier risks that can impact Global Business 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.
Aligning sales with marketing
– It come across in the case study City Furniture and Mattress (B) 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 City Furniture and Mattress (B) can leverage the sales team experience to cultivate customer relationships as Furniture Cfm is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, W. Glenn Rowe, Bobby Singh-Randhawa suggests that, Furniture Cfm 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 City Furniture and Mattress (B) HBR case study mentions - Furniture Cfm 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.
Increasing silos among functional specialists
– The organizational structure of Furniture Cfm is dominated by functional specialists. It is not different from other players in the Global Business segment. Furniture Cfm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Furniture Cfm to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Furniture Cfm 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 decision making process
– As mentioned earlier in the report, Furniture Cfm 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. Furniture Cfm 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study City Furniture and Mattress (B), it seems that the employees of Furniture Cfm don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the City Furniture and Mattress (B) 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 Furniture Cfm has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study City Furniture and Mattress (B), in the dynamic environment Furniture Cfm has struggled to respond to the nimble upstart competition. Furniture Cfm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities City Furniture and Mattress (B) | 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 City Furniture and Mattress (B) are -
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. Furniture Cfm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Furniture Cfm 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.
Creating value in data economy
– The success of analytics program of Furniture Cfm has opened avenues for new revenue streams for the organization in the industry. This can help Furniture Cfm to build a more holistic ecosystem as suggested in the City Furniture and Mattress (B) case study. Furniture Cfm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Furniture Cfm to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Furniture Cfm 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 City Furniture and Mattress (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Furniture Cfm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Furniture Cfm to increase its market reach. Furniture Cfm 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Furniture Cfm 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 Furniture Cfm to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Furniture Cfm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Furniture Cfm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Furniture Cfm 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, City Furniture and Mattress (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Furniture Cfm 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. Furniture Cfm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Furniture Cfm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Buying journey improvements
– Furniture Cfm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. City Furniture and Mattress (B) 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.
Threats City Furniture and Mattress (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study City Furniture and Mattress (B) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Furniture Cfm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Furniture Cfm 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.
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. Furniture Cfm needs to understand the core reasons impacting the Global Business 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study City Furniture and Mattress (B), Furniture Cfm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Consumer confidence and its impact on Furniture Cfm 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.
Regulatory challenges
– Furniture Cfm 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 Global Business industry regulations.
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.
Environmental challenges
– Furniture Cfm 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. Furniture Cfm can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Furniture Cfm.
Increasing wage structure of Furniture Cfm
– 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 Furniture Cfm.
High dependence on third party suppliers
– Furniture Cfm 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Furniture Cfm 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 City Furniture and Mattress (B) .
Weighted SWOT Analysis of City Furniture and Mattress (B) 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 City Furniture and Mattress (B) 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 City Furniture and Mattress (B) 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 City Furniture and Mattress (B) 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 City Furniture and Mattress (B) 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 Furniture Cfm needs to make to build a sustainable competitive advantage.