Sawchyn Guitars: Can an Old Business Learn New Tricks? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sawchyn Guitars: Can an Old Business Learn New Tricks?
AWARD WINNING CASE - Laurier School of Business and Economics Best Case Award 2013. The owner of Sawchyn Guitars makes fine handmade acoustic guitars and mandolins. After 40 years of operating from a two-storey backyard garage, he contemplates a shift from a solely custom-order business to a storefront location. Although his custom-order business is still strong, the owner sees the opportunity to realize his dream of providing a full-service musical instrument haven for the local music community through a proper storefront. After opening a new retail location, public reception to the new store is overwhelmingly positive, but the success in new business lines restricts the capacity to build new instruments. Despite the enthusiastic response to the store, the business is experiencing unanticipated growing pains related to managing small-business growth.
Swot Analysis of "Sawchyn Guitars: Can an Old Business Learn New Tricks?" written by Meredith Woodwark, Matthew Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Guitars Sawchyn facing as an external strategic factors. Some of the topics covered in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study are - Strategic Management Strategies, Entrepreneurship, Strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Sawchyn Guitars: Can an Old Business Learn New Tricks? casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing commodity prices, etc
Introduction to SWOT Analysis of Sawchyn Guitars: Can an Old Business Learn New Tricks?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guitars Sawchyn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? can be done for the following purposes –
1. Strategic planning using facts provided in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study
2. Improving business portfolio management of Guitars Sawchyn
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 Guitars Sawchyn
Strengths Sawchyn Guitars: Can an Old Business Learn New Tricks? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guitars Sawchyn in Sawchyn Guitars: Can an Old Business Learn New Tricks? Harvard Business Review case study are -
High brand equity
– Guitars Sawchyn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guitars Sawchyn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Guitars Sawchyn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Guitars Sawchyn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Guitars Sawchyn in the sector have low bargaining power. Sawchyn Guitars: Can an Old Business Learn New Tricks? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guitars Sawchyn to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Guitars Sawchyn 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 Guitars Sawchyn 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.
Analytics focus
– Guitars Sawchyn 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 Meredith Woodwark, Matthew Wong 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.
Strong track record of project management
– Guitars Sawchyn is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Guitars Sawchyn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guitars Sawchyn 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.
Diverse revenue streams
– Guitars Sawchyn is present in almost all the verticals within the industry. This has provided firm in Sawchyn Guitars: Can an Old Business Learn New Tricks? 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Sawchyn Guitars: Can an Old Business Learn New Tricks? firm has clearly differentiated products in the market place. This has enabled Guitars Sawchyn to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Guitars Sawchyn to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Sawchyn Guitars: Can an Old Business Learn New Tricks? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sawchyn Guitars: Can an Old Business Learn New Tricks? are -
Capital Spending Reduction
– Even during the low interest decade, Guitars Sawchyn 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 decision making process
– As mentioned earlier in the report, Guitars Sawchyn 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. Guitars Sawchyn 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.
No frontier risks strategy
– After analyzing the HBR case study Sawchyn Guitars: Can an Old Business Learn New Tricks?, 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.
Increasing silos among functional specialists
– The organizational structure of Guitars Sawchyn is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Guitars Sawchyn needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guitars Sawchyn to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Sawchyn Guitars: Can an Old Business Learn New Tricks? HBR case study mentions - Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks?, is just above the industry average. Guitars Sawchyn 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 cash cycle compare to competitors
Guitars Sawchyn 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.
Aligning sales with marketing
– It come across in the case study Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? can leverage the sales team experience to cultivate customer relationships as Guitars Sawchyn is planning to shift buying processes online.
Products dominated business model
– Even though Guitars Sawchyn 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 - Sawchyn Guitars: Can an Old Business Learn New Tricks? should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sawchyn Guitars: Can an Old Business Learn New Tricks?, in the dynamic environment Guitars Sawchyn has struggled to respond to the nimble upstart competition. Guitars Sawchyn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Guitars Sawchyn, firm in the HBR case study Sawchyn Guitars: Can an Old Business Learn New Tricks? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Sawchyn Guitars: Can an Old Business Learn New Tricks? | 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Guitars Sawchyn can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Guitars Sawchyn 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guitars Sawchyn can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Guitars Sawchyn 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.
Building a culture of innovation
– managers at Guitars Sawchyn 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.
Manufacturing automation
– Guitars Sawchyn 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Guitars Sawchyn 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Guitars Sawchyn 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.
Better consumer reach
– The expansion of the 5G network will help Guitars Sawchyn to increase its market reach. Guitars Sawchyn 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guitars Sawchyn is facing challenges because of the dominance of functional experts in the organization. Sawchyn Guitars: Can an Old Business Learn New Tricks? 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guitars Sawchyn 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 Guitars Sawchyn to hire the very best people irrespective of their geographical location.
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 Guitars Sawchyn in the consumer business. Now Guitars Sawchyn can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Guitars Sawchyn 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.
Threats Sawchyn Guitars: Can an Old Business Learn New Tricks? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sawchyn Guitars: Can an Old Business Learn New Tricks? are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? .
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. Guitars Sawchyn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Guitars Sawchyn 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.
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.
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. Guitars Sawchyn needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Guitars Sawchyn has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Guitars Sawchyn 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 Sawchyn Guitars: Can an Old Business Learn New Tricks?, Guitars Sawchyn 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 .
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 Guitars Sawchyn business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Guitars Sawchyn 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. Guitars Sawchyn can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Guitars Sawchyn in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing wage structure of Guitars Sawchyn
– 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 Guitars Sawchyn.
Consumer confidence and its impact on Guitars Sawchyn 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.
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.
Weighted SWOT Analysis of Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Guitars Sawchyn needs to make to build a sustainable competitive advantage.
