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 - – there is backlash against globalization, central banks are concerned over increasing inflation, increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption,
wage bills are increasing, cloud computing is disrupting traditional business models, 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 -
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.
Ability to lead change in Innovation & Entrepreneurship field
– Guitars Sawchyn is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Guitars Sawchyn in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Guitars Sawchyn 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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
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. Guitars Sawchyn 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. Guitars Sawchyn 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.
Creating value in data economy
– The success of analytics program of Guitars Sawchyn has opened avenues for new revenue streams for the organization in the industry. This can help Guitars Sawchyn to build a more holistic ecosystem as suggested in the Sawchyn Guitars: Can an Old Business Learn New Tricks? case study. Guitars Sawchyn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Regulatory challenges
– Guitars Sawchyn needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
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.
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? .
Stagnating economy with rate increase
– Guitars Sawchyn 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 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.