Howard Industries: A Social Enterprise Worth Continuing? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Howard Industries: A Social Enterprise Worth Continuing?

Barbara Levesque was preparing for her monthly board meeting on January 18, 2016. Five years ago John Howard Society of the North Okanagan (JHSNOK) made a strategic decision to pursue social enterprise. Its primary purpose was to better support the growth and development of their clients. A secondary driver was to find additional ways to diversify their funding sources to have more financial independence and stability. Social enterprise was identified as the vehicle to expand their impact, more fully meet their mission, and help contribute to long term operational funding. In 2010, Howard Industries was incorporated and two social-purpose ventures were created: "Uncle Howie's Kitchen" provided low cost catering and "Clean Sweep" offered minor renovations, painting and cleaning that mainly serviced the non-profit and public sector. By 2015, the investment in Howard Industries had started to pay off and to-date their social enterprises had contributed $4500 to its parent organization. The management team estimated that approximately 18 clients of JHSNOK worked full time in the two businesses throughout the four-year period from 2011 to 2015, and significant transformative change for some of these men had occurred. Howard Industries was at a pivotal point in development. The market showed an opportunity to maintain and expand current contracts, increase their profitability, and move their clients into leadership roles in the business. In order to grow, additional management time would have to be allocated to support it. Levesque had been asked by her Board to report on what Howard Industries achieved in 2015, and provide recommendations for its future direction. With the five-year social enterprise pilot coming to an end, Levesque needed to decide if Howard Industries was worth continuing and if so, how would she convince the Board to renew their commitment to this social venture.

Authors :: Kyleen Myrah, Kerry Rempel, Dean Warner

Topics :: Innovation & Entrepreneurship

Tags :: Social enterprise, Social responsibility, Strategic planning, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Howard Industries: A Social Enterprise Worth Continuing?" written by Kyleen Myrah, Kerry Rempel, Dean Warner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Howard Levesque facing as an external strategic factors. Some of the topics covered in Howard Industries: A Social Enterprise Worth Continuing? case study are - Strategic Management Strategies, Social enterprise, Social responsibility, Strategic planning, Sustainability and Innovation & Entrepreneurship.

Some of the macro environment factors that can be used to understand the Howard Industries: A Social Enterprise Worth Continuing? casestudy better are - – challanges to central banks by blockchain based private currencies, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing energy prices, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Howard Industries: A Social Enterprise Worth Continuing?

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Howard Industries: A Social Enterprise Worth Continuing? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Howard Levesque, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Howard Levesque 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Howard Industries: A Social Enterprise Worth Continuing? can be done for the following purposes –
1. Strategic planning using facts provided in Howard Industries: A Social Enterprise Worth Continuing? case study
2. Improving business portfolio management of Howard Levesque
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 Howard Levesque

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Strengths Howard Industries: A Social Enterprise Worth Continuing? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Howard Levesque in Howard Industries: A Social Enterprise Worth Continuing? Harvard Business Review case study are -

Diverse revenue streams

– Howard Levesque is present in almost all the verticals within the industry. This has provided firm in Howard Industries: A Social Enterprise Worth Continuing? 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.

Organizational Resilience of Howard Levesque

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Howard Levesque does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Innovation & Entrepreneurship segment

- digital transformation varies from industry to industry. For Howard Levesque digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Howard Levesque 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.

High switching costs

– The high switching costs that Howard Levesque has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Low bargaining power of suppliers

– Suppliers of Howard Levesque in the sector have low bargaining power. Howard Industries: A Social Enterprise Worth Continuing? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Howard Levesque to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Howard Levesque is one of the leading recruiters in the industry. Managers in the Howard Industries: A Social Enterprise Worth Continuing? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Innovation driven organization

– Howard Levesque is one of the most innovative firm in sector. Manager in Howard Industries: A Social Enterprise Worth Continuing? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Successful track record of launching new products

– Howard Levesque has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Howard Levesque 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.

Operational resilience

– The operational resilience strategy in the Howard Industries: A Social Enterprise Worth Continuing? 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.

Highly skilled collaborators

– Howard Levesque 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 Howard Industries: A Social Enterprise Worth Continuing? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Innovation & Entrepreneurship industry

– Howard Industries: A Social Enterprise Worth Continuing? firm has clearly differentiated products in the market place. This has enabled Howard Levesque to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Howard Levesque to invest into research and development (R&D) and innovation.

Analytics focus

– Howard Levesque 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 Kyleen Myrah, Kerry Rempel, Dean Warner 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.

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Weaknesses Howard Industries: A Social Enterprise Worth Continuing? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Howard Industries: A Social Enterprise Worth Continuing? are -

Low market penetration in new markets

– Outside its home market of Howard Levesque, firm in the HBR case study Howard Industries: A Social Enterprise Worth Continuing? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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 Howard Levesque supply chain. Even after few cautionary changes mentioned in the HBR case study - Howard Industries: A Social Enterprise Worth Continuing?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Howard Levesque vulnerable to further global disruptions in South East Asia.

Skills based hiring

– The stress on hiring functional specialists at Howard Levesque 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Howard Industries: A Social Enterprise Worth Continuing?, in the dynamic environment Howard Levesque has struggled to respond to the nimble upstart competition. Howard Levesque has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, firm in the HBR case study Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Levesque 's lucrative customers.

Slow to strategic competitive environment developments

– As Howard Industries: A Social Enterprise Worth Continuing? HBR case study mentions - Howard Levesque 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.

Lack of clear differentiation of Howard Levesque products

– To increase the profitability and margins on the products, Howard Levesque needs to provide more differentiated products than what it is currently offering in the marketplace.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Levesque has relatively successful track record of launching new products.

Aligning sales with marketing

– It come across in the case study Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Industries: A Social Enterprise Worth Continuing? can leverage the sales team experience to cultivate customer relationships as Howard Levesque is planning to shift buying processes online.

Interest costs

– Compare to the competition, Howard Levesque 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Howard Levesque is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Howard Industries: A Social Enterprise Worth Continuing? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

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Opportunities Howard Industries: A Social Enterprise Worth Continuing? | 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 Howard Industries: A Social Enterprise Worth Continuing? are -

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 Howard Levesque in the consumer business. Now Howard Levesque can target international markets with far fewer capital restrictions requirements than the existing system.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Howard Levesque can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Howard Levesque can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Loyalty marketing

– Howard Levesque 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Howard Levesque can use these opportunities to build new business models that can help the communities that Howard Levesque operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Howard Levesque 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 Howard Levesque to hire the very best people irrespective of their geographical location.

Developing new processes and practices

– Howard Levesque 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

– Howard Levesque 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.

Learning at scale

– Online learning technologies has now opened space for Howard Levesque 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Howard Levesque can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Howard Levesque is facing challenges because of the dominance of functional experts in the organization. Howard Industries: A Social Enterprise Worth Continuing? 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.

Buying journey improvements

– Howard Levesque can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Howard Industries: A Social Enterprise Worth Continuing? 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.

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 Howard Levesque 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.

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. Howard Levesque can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Howard Industries: A Social Enterprise Worth Continuing? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Howard Industries: A Social Enterprise Worth Continuing? are -

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 Howard Levesque.

Increasing wage structure of Howard Levesque

– 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 Howard Levesque.

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.

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. Howard Levesque 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

– Howard Levesque 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.

Consumer confidence and its impact on Howard Levesque 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Howard Levesque 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.

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 Howard Levesque business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Howard Levesque 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 Howard Industries: A Social Enterprise Worth Continuing? .

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 Howard Levesque in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Howard Levesque has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Howard Levesque 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.

Environmental challenges

– Howard Levesque 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. Howard Levesque can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.

Shortening product life cycle

– it is one of the major threat that Howard Levesque is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Industries: A Social Enterprise Worth Continuing? 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 Howard Levesque needs to make to build a sustainable competitive advantage.

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