Case Study Description of Windhorse Farm's Eco-Woodshop Guitar Top Decision
The owner of Windhorse Farm (WHF), a sustainably run woodlot and woodshop that produces building products as well as "tonewood" (wood used for guitar, mandolin, violin tops), is reaching retirement age. Since there is no heir apparent to run the businesses, he needs to determine whether he should stay in or exit the building products business and/or the tonewood business. The decision must conform to the criteria set out by the "four pillars" (economic, social, environmental and spiritual), which guide the mission and strategy of WHF. Objectives: 1) To provide a rich opportunity for students to examine how a small business uses a triple (in this case, quadruple) bottom line approach to corporate mission definition and strategy formulation. 2) To demonstrate how product extension decisions need to be integrated into the dynamics of the overall company, especially in terms of the relationship between existing product lines and new marketing, production and personnel requirements. 3) To expose students to business and community-based strategies that can enhance the sustainability of the forest industry. 4) To present students with a decision-making opportunity in a market such as tonewood where market knowledge and available data are highly "impressionistic" and informal. 5) To highlight how personal priorities, such as retirement and succession, may override other concerns.
Swot Analysis of "Windhorse Farm's Eco-Woodshop Guitar Top Decision" written by Julia Sagebien, Annika Tamlyn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tonewood Whf facing as an external strategic factors. Some of the topics covered in Windhorse Farm's Eco-Woodshop Guitar Top Decision case study are - Strategic Management Strategies, Human resource management, Manufacturing, Marketing, Organizational culture, Succession planning, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Windhorse Farm's Eco-Woodshop Guitar Top Decision casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, wage bills are increasing, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing energy prices,
supply chains are disrupted by pandemic , increasing commodity prices, etc
Introduction to SWOT Analysis of Windhorse Farm's Eco-Woodshop Guitar Top Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Windhorse Farm's Eco-Woodshop Guitar Top Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tonewood Whf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tonewood Whf 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision can be done for the following purposes –
1. Strategic planning using facts provided in Windhorse Farm's Eco-Woodshop Guitar Top Decision case study
2. Improving business portfolio management of Tonewood Whf
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 Tonewood Whf
Strengths Windhorse Farm's Eco-Woodshop Guitar Top Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tonewood Whf in Windhorse Farm's Eco-Woodshop Guitar Top Decision Harvard Business Review case study are -
Ability to recruit top talent
– Tonewood Whf is one of the leading recruiters in the industry. Managers in the Windhorse Farm's Eco-Woodshop Guitar Top Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Tonewood Whf 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 Julia Sagebien, Annika Tamlyn 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.
Ability to lead change in Innovation & Entrepreneurship field
– Tonewood Whf 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 Tonewood Whf in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Tonewood Whf in the sector have low bargaining power. Windhorse Farm's Eco-Woodshop Guitar Top Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tonewood Whf to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Tonewood Whf is one of the most innovative firm in sector. Manager in Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Tonewood Whf 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.
High brand equity
– Tonewood Whf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tonewood Whf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Tonewood Whf 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Tonewood Whf 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 Tonewood Whf is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Windhorse Farm's Eco-Woodshop Guitar Top Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Tonewood Whf is present in almost all the verticals within the industry. This has provided firm in Windhorse Farm's Eco-Woodshop Guitar Top Decision case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Windhorse Farm's Eco-Woodshop Guitar Top Decision 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.
Superior customer experience
– The customer experience strategy of Tonewood Whf in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Windhorse Farm's Eco-Woodshop Guitar Top Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Windhorse Farm's Eco-Woodshop Guitar Top Decision are -
Need for greater diversity
– Tonewood Whf 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tonewood Whf is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Windhorse Farm's Eco-Woodshop Guitar Top Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Tonewood Whf 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, Tonewood Whf 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. Tonewood Whf 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.
Skills based hiring
– The stress on hiring functional specialists at Tonewood Whf 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Windhorse Farm's Eco-Woodshop Guitar Top Decision, is just above the industry average. Tonewood Whf 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Tonewood Whf 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Tonewood Whf 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.
Slow to strategic competitive environment developments
– As Windhorse Farm's Eco-Woodshop Guitar Top Decision HBR case study mentions - Tonewood Whf takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Tonewood Whf 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.
Products dominated business model
– Even though Tonewood Whf 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 - Windhorse Farm's Eco-Woodshop Guitar Top Decision should strive to include more intangible value offerings along with its core products and services.
Opportunities Windhorse Farm's Eco-Woodshop Guitar Top Decision | 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision are -
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. Tonewood Whf 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. Tonewood Whf 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.
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 Tonewood Whf in the consumer business. Now Tonewood Whf can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tonewood Whf 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.
Learning at scale
– Online learning technologies has now opened space for Tonewood Whf 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.
Creating value in data economy
– The success of analytics program of Tonewood Whf has opened avenues for new revenue streams for the organization in the industry. This can help Tonewood Whf to build a more holistic ecosystem as suggested in the Windhorse Farm's Eco-Woodshop Guitar Top Decision case study. Tonewood Whf can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Tonewood Whf can develop new processes and procedures in Innovation & Entrepreneurship 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
– Tonewood Whf 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tonewood Whf to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tonewood Whf 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 Tonewood Whf to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tonewood Whf 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.
Manufacturing automation
– Tonewood Whf can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 Tonewood Whf 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tonewood Whf can use these opportunities to build new business models that can help the communities that Tonewood Whf operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Building a culture of innovation
– managers at Tonewood Whf 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.
Threats Windhorse Farm's Eco-Woodshop Guitar Top Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Windhorse Farm's Eco-Woodshop Guitar Top Decision are -
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 Tonewood Whf business can come under increasing regulations regarding data privacy, data security, etc.
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. Tonewood Whf needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tonewood Whf with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Tonewood Whf 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. Tonewood Whf can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
High dependence on third party suppliers
– Tonewood Whf 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.
Shortening product life cycle
– it is one of the major threat that Tonewood Whf is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Tonewood Whf
– 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 Tonewood Whf.
Stagnating economy with rate increase
– Tonewood Whf 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.
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 Tonewood Whf in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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 Tonewood Whf.
Regulatory challenges
– Tonewood Whf 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tonewood Whf 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.
Weighted SWOT Analysis of Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Tonewood Whf needs to make to build a sustainable competitive advantage.
