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 - – increasing energy prices, talent flight as more people leaving formal jobs, technology disruption, cloud computing is disrupting traditional business models, there is backlash against globalization, wage bills are increasing, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, 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 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.
Highly skilled collaborators
– Tonewood Whf has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Windhorse Farm's Eco-Woodshop Guitar Top Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Successful track record of launching new products
– Tonewood Whf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tonewood Whf has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Tonewood Whf
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tonewood Whf does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Tonewood Whf 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.
Training and development
– Tonewood Whf has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Windhorse Farm's Eco-Woodshop Guitar Top Decision 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
– 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.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Windhorse Farm's Eco-Woodshop Guitar Top Decision firm has clearly differentiated products in the market place. This has enabled Tonewood Whf to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Tonewood Whf to invest into research and development (R&D) and innovation.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Tonewood Whf has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Windhorse Farm's Eco-Woodshop Guitar Top Decision 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision can leverage the sales team experience to cultivate customer relationships as Tonewood Whf is planning to shift buying processes online.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Windhorse Farm's Eco-Woodshop Guitar Top Decision, it seems that the employees of Tonewood Whf 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Windhorse Farm's Eco-Woodshop Guitar Top Decision, in the dynamic environment Tonewood Whf has struggled to respond to the nimble upstart competition. Tonewood Whf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Tonewood Whf 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Julia Sagebien, Annika Tamlyn suggests that, Tonewood Whf 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.
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.
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.
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 -
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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Tonewood Whf to increase its market reach. Tonewood Whf will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 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.
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. Tonewood Whf can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Buying journey improvements
– Tonewood Whf can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Windhorse Farm's Eco-Woodshop Guitar Top Decision 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.
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.
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.
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.
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 -
Technology acceleration in Forth Industrial Revolution
– Tonewood Whf has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Tonewood Whf needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Windhorse Farm's Eco-Woodshop Guitar Top Decision, Tonewood Whf 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tonewood Whf 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 Windhorse Farm's Eco-Woodshop Guitar Top Decision .
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.
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.
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.
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.
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.
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.
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.
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. Tonewood Whf 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.
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.
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.
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.