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 commodity prices, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, 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 -
Superior customer experience
– The customer experience strategy of Furniture Cfm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
Learning organization
- Furniture Cfm 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 Furniture Cfm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in City Furniture and Mattress (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Innovation driven organization
– Furniture Cfm is one of the most innovative firm in sector. Manager in City Furniture and Mattress (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Furniture Cfm 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.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Furniture Cfm has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study City Furniture and Mattress (B), is just above the industry average. Furniture Cfm 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.
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.
Need for greater diversity
– Furniture Cfm 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 operating costs
– Compare to the competitors, firm in the HBR case study City Furniture and Mattress (B) 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 Furniture Cfm 's lucrative customers.
Interest costs
– Compare to the competition, Furniture Cfm 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Furniture Cfm needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though Furniture Cfm 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 - City Furniture and Mattress (B) should strive to include more intangible value offerings along with its core products and services.
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 -
Learning at scale
– Online learning technologies has now opened space for Furniture Cfm 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.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Furniture Cfm in the consumer business. Now Furniture Cfm can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Furniture Cfm is facing challenges because of the dominance of functional experts in the organization. City Furniture and Mattress (B) 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.
Building a culture of innovation
– managers at Furniture Cfm 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 Global Business segment.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Furniture Cfm can use these opportunities to build new business models that can help the communities that Furniture Cfm operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
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 -
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.
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. Furniture Cfm 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.
Shortening product life cycle
– it is one of the major threat that Furniture Cfm is facing in Global Business 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 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 .
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 Furniture Cfm business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Furniture Cfm in the Global Business industry. The Global Business 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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Furniture Cfm needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Furniture Cfm 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 Furniture Cfm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
