Chabros International Group: A World of Wood SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chabros International Group: A World of Wood
The Chabros International Group case examines how a Lebanese multinational wood company confronts a drastic drop in its largest subsidiary's sales after 2008's global economic crisis. Antoine Chami, Chabros's owner and president, was reviewing his company's 2009 end-of-year financial statements and, in particular, a 30 per cent drop in sales in Dubai. In 2007, a year before the global economic crisis, Chami had invested more than $11 million to acquire and expand a sawmill in Serbia to meet Chabros's growing lumber sales demand. With a much higher capacity to produce lumber and a much lower probability to sell it, Chami had to decide what to do to overcome this challenge. Should he close parts of his Serbian sawmill? Should he try to boost his company's sales to use all of his sawmill's available capacity? If so, should Chabros try to increase sales within the countries where it already operated (UAE, Saudi Arabia, Qatar, Oman, Egypt) or should it expand into a new country (Algeria, Bahrain, Iran, Iraq, Jordan, Kuwait, Libya, Syria, Tunisia)? Would Morocco, among other countries, be the best country to expand into? Was it the right time to embark on such an expansion?
Swot Analysis of "Chabros International Group: A World of Wood" written by Paul W. Beamish, Bassam Farah includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chabros Chami facing as an external strategic factors. Some of the topics covered in Chabros International Group: A World of Wood case study are - Strategic Management Strategies, Globalization, Growth strategy, Marketing and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Chabros International Group: A World of Wood casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Chabros International Group: A World of Wood
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chabros International Group: A World of Wood case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chabros Chami, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chabros Chami 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 Chabros International Group: A World of Wood can be done for the following purposes –
1. Strategic planning using facts provided in Chabros International Group: A World of Wood case study
2. Improving business portfolio management of Chabros Chami
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 Chabros Chami
Strengths Chabros International Group: A World of Wood | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chabros Chami in Chabros International Group: A World of Wood Harvard Business Review case study are -
Effective Research and Development (R&D)
– Chabros Chami 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 Chabros International Group: A World of Wood - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Chabros Chami 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.
Highly skilled collaborators
– Chabros Chami 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 Chabros International Group: A World of Wood HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Chabros Chami is one of the most innovative firm in sector. Manager in Chabros International Group: A World of Wood Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Chabros Chami in the sector have low bargaining power. Chabros International Group: A World of Wood has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chabros Chami to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Chabros Chami has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chabros Chami to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Chabros Chami has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chabros Chami 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
– Chabros Chami is one of the leading recruiters in the industry. Managers in the Chabros International Group: A World of Wood are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Chabros Chami in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Chabros Chami is present in almost all the verticals within the industry. This has provided firm in Chabros International Group: A World of Wood 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.
Analytics focus
– Chabros Chami 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 Paul W. Beamish, Bassam Farah 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
– Chabros Chami is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Chabros International Group: A World of Wood | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chabros International Group: A World of Wood are -
Need for greater diversity
– Chabros Chami 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Chabros International Group: A World of Wood 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 Chabros Chami has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Chabros Chami 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Chabros Chami supply chain. Even after few cautionary changes mentioned in the HBR case study - Chabros International Group: A World of Wood, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chabros Chami vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Chabros International Group: A World of Wood 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 Chabros International Group: A World of Wood can leverage the sales team experience to cultivate customer relationships as Chabros Chami is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Chabros Chami is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Chabros Chami needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chabros Chami to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Chabros Chami 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chabros International Group: A World of Wood, in the dynamic environment Chabros Chami has struggled to respond to the nimble upstart competition. Chabros Chami has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Chabros Chami 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chabros Chami is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chabros International Group: A World of Wood can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Chabros Chami products
– To increase the profitability and margins on the products, Chabros Chami needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Chabros International Group: A World of Wood | 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 Chabros International Group: A World of Wood are -
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 Chabros Chami 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chabros Chami 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.
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. Chabros Chami can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chabros Chami can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Chabros Chami has opened avenues for new revenue streams for the organization in the industry. This can help Chabros Chami to build a more holistic ecosystem as suggested in the Chabros International Group: A World of Wood case study. Chabros Chami can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Chabros Chami 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chabros Chami can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Chabros International Group: A World of Wood, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Chabros Chami 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.
Leveraging digital technologies
– Chabros Chami 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.
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. Chabros Chami can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Chabros Chami 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chabros Chami is facing challenges because of the dominance of functional experts in the organization. Chabros International Group: A World of Wood 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chabros Chami 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.
Threats Chabros International Group: A World of Wood External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chabros International Group: A World of Wood are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chabros Chami in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chabros Chami can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Chabros Chami is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Chabros Chami needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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 Chabros Chami.
Consumer confidence and its impact on Chabros Chami 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chabros International Group: A World of Wood, Chabros Chami 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, Chabros Chami 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 Chabros International Group: A World of Wood .
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 Chabros Chami in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chabros Chami with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Chabros Chami 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.
Stagnating economy with rate increase
– Chabros Chami 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.
Weighted SWOT Analysis of Chabros International Group: A World of Wood 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 Chabros International Group: A World of Wood 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 Chabros International Group: A World of Wood 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 Chabros International Group: A World of Wood 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 Chabros International Group: A World of Wood 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 Chabros Chami needs to make to build a sustainable competitive advantage.