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 transportation and logistics costs, talent flight as more people leaving formal jobs, increasing energy prices, wage bills are increasing, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, 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 -
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.
Successful track record of launching new products
– Guitars Sawchyn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guitars Sawchyn 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.
Ability to recruit top talent
– Guitars Sawchyn is one of the leading recruiters in the industry. Managers in the Sawchyn Guitars: Can an Old Business Learn New Tricks? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
Innovation driven organization
– Guitars Sawchyn is one of the most innovative firm in sector. Manager in Sawchyn Guitars: Can an Old Business Learn New Tricks? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Learning organization
- Guitars Sawchyn 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 Guitars Sawchyn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sawchyn Guitars: Can an Old Business Learn New Tricks? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 -
High bargaining power of channel partners
– Because of the regulatory requirements, Meredith Woodwark, Matthew Wong suggests that, Guitars Sawchyn 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.
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.
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.
Lack of clear differentiation of Guitars Sawchyn products
– To increase the profitability and margins on the products, Guitars Sawchyn needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sawchyn Guitars: Can an Old Business Learn New Tricks?, it seems that the employees of Guitars Sawchyn 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Guitars Sawchyn 's lucrative customers.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sawchyn Guitars: Can an Old Business Learn New Tricks? 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 Guitars Sawchyn has relatively successful track record of launching new products.
Need for greater diversity
– Guitars Sawchyn 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.
Interest costs
– Compare to the competition, Guitars Sawchyn 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.
Skills based hiring
– The stress on hiring functional specialists at Guitars Sawchyn 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.
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.
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.
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.
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.
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 Guitars Sawchyn 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, Guitars Sawchyn can use these opportunities to build new business models that can help the communities that Guitars Sawchyn operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Leveraging digital technologies
– Guitars Sawchyn can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
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.
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. Guitars Sawchyn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Guitars Sawchyn with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Guitars Sawchyn is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
High dependence on third party suppliers
– Guitars Sawchyn 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guitars Sawchyn 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 Guitars Sawchyn.
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.
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.