Case Study Description of Lance Johnstone: Developing 3000 North Broad
The case focuses on Lance Johnstone, a former NFL player, who has dabbled in real estate development during his playing career, and now, as a retired player, is trying to pursue the development of a 10-unit rental apartment building in a depressed area of Philadelphia, his hometown. The case presents the process Johnstone and his partner went through to purchase the vacant land, develop a construction budget and financing plan, and asks students to evaluate the prospective financials for this development and assess the viability of the development plan and its prospective returns. The case then ends with a change in the fundamental assumption - the bank has withdrawn and a new bank will loan less than the original plan, and the construction budget has come in considerably higher. Students must evaluate the plan and prospective returns in light of this new information.
Swot Analysis of "Lance Johnstone: Developing 3000 North Broad" written by Michael J. Roberts, Nabil N. El-Hage includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Johnstone Prospective facing as an external strategic factors. Some of the topics covered in Lance Johnstone: Developing 3000 North Broad case study are - Strategic Management Strategies, Financial management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Lance Johnstone: Developing 3000 North Broad casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, central banks are concerned over increasing inflation, increasing energy prices, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Lance Johnstone: Developing 3000 North Broad
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lance Johnstone: Developing 3000 North Broad case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Johnstone Prospective, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Johnstone Prospective 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 Lance Johnstone: Developing 3000 North Broad can be done for the following purposes –
1. Strategic planning using facts provided in Lance Johnstone: Developing 3000 North Broad case study
2. Improving business portfolio management of Johnstone Prospective
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Johnstone Prospective
Strengths Lance Johnstone: Developing 3000 North Broad | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Johnstone Prospective in Lance Johnstone: Developing 3000 North Broad Harvard Business Review case study are -
Training and development
– Johnstone Prospective has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lance Johnstone: Developing 3000 North Broad 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.
High switching costs
– The high switching costs that Johnstone Prospective 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.
Operational resilience
– The operational resilience strategy in the Lance Johnstone: Developing 3000 North Broad 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
– Johnstone Prospective has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Johnstone Prospective to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Johnstone Prospective is one of the most innovative firm in sector. Manager in Lance Johnstone: Developing 3000 North Broad Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Lance Johnstone: Developing 3000 North Broad firm has clearly differentiated products in the market place. This has enabled Johnstone Prospective to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Johnstone Prospective to invest into research and development (R&D) and innovation.
Analytics focus
– Johnstone Prospective 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 Michael J. Roberts, Nabil N. El-Hage 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.
Low bargaining power of suppliers
– Suppliers of Johnstone Prospective in the sector have low bargaining power. Lance Johnstone: Developing 3000 North Broad has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Johnstone Prospective to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Johnstone Prospective 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 Lance Johnstone: Developing 3000 North Broad - 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
– Johnstone Prospective is one of the leading recruiters in the industry. Managers in the Lance Johnstone: Developing 3000 North Broad are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Johnstone Prospective in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Johnstone Prospective is present in almost all the verticals within the industry. This has provided firm in Lance Johnstone: Developing 3000 North Broad 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.
Weaknesses Lance Johnstone: Developing 3000 North Broad | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lance Johnstone: Developing 3000 North Broad are -
Skills based hiring
– The stress on hiring functional specialists at Johnstone Prospective 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.
Products dominated business model
– Even though Johnstone Prospective 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 - Lance Johnstone: Developing 3000 North Broad should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lance Johnstone: Developing 3000 North Broad 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 Johnstone Prospective has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Lance Johnstone: Developing 3000 North Broad HBR case study mentions - Johnstone Prospective 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Lance Johnstone: Developing 3000 North Broad, is just above the industry average. Johnstone Prospective 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Johnstone Prospective is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Capital Spending Reduction
– Even during the low interest decade, Johnstone Prospective 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Lance Johnstone: Developing 3000 North Broad 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 Johnstone Prospective 's lucrative customers.
Lack of clear differentiation of Johnstone Prospective products
– To increase the profitability and margins on the products, Johnstone Prospective needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad can leverage the sales team experience to cultivate customer relationships as Johnstone Prospective is planning to shift buying processes online.
Opportunities Lance Johnstone: Developing 3000 North Broad | 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 Lance Johnstone: Developing 3000 North Broad are -
Buying journey improvements
– Johnstone Prospective can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lance Johnstone: Developing 3000 North Broad 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 Johnstone Prospective can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Johnstone Prospective 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. Johnstone Prospective can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Johnstone Prospective can use these opportunities to build new business models that can help the communities that Johnstone Prospective operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Johnstone Prospective 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 Johnstone Prospective to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Johnstone Prospective 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.
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. Johnstone Prospective can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Johnstone Prospective has opened avenues for new revenue streams for the organization in the industry. This can help Johnstone Prospective to build a more holistic ecosystem as suggested in the Lance Johnstone: Developing 3000 North Broad case study. Johnstone Prospective 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 Johnstone Prospective 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Johnstone Prospective can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Johnstone Prospective 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 Innovation & Entrepreneurship segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Johnstone Prospective in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Johnstone Prospective 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 Lance Johnstone: Developing 3000 North Broad - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Johnstone Prospective to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Lance Johnstone: Developing 3000 North Broad External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lance Johnstone: Developing 3000 North Broad are -
Consumer confidence and its impact on Johnstone Prospective 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.
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.
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 Johnstone Prospective in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Johnstone Prospective 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 Innovation & Entrepreneurship industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Johnstone Prospective in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Johnstone Prospective can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lance Johnstone: Developing 3000 North Broad, Johnstone Prospective may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Environmental challenges
– Johnstone Prospective 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. Johnstone Prospective can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 dependence on third party suppliers
– Johnstone Prospective 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, Johnstone Prospective 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 Lance Johnstone: Developing 3000 North Broad .
Stagnating economy with rate increase
– Johnstone Prospective 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. Johnstone Prospective needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad 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 Lance Johnstone: Developing 3000 North Broad 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 Johnstone Prospective needs to make to build a sustainable competitive advantage.