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, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, increasing energy prices, etc
Introduction to SWOT Analysis of Sawchyn Guitars: Can an Old Business Learn New Tricks?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guitars Sawchyn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guitars Sawchyn operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Sawchyn Guitars: Can an Old Business Learn New Tricks? can be done for the following purposes –
1. Strategic planning using facts provided in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study
2. Improving business portfolio management of Guitars Sawchyn
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guitars Sawchyn
Strengths Sawchyn Guitars: Can an Old Business Learn New Tricks? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guitars Sawchyn in Sawchyn Guitars: Can an Old Business Learn New Tricks? Harvard Business Review case study are -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Diverse revenue streams
– Guitars Sawchyn is present in almost all the verticals within the industry. This has provided firm in Sawchyn Guitars: Can an Old Business Learn New Tricks? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Guitars Sawchyn 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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Guitars Sawchyn can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– Guitars Sawchyn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sawchyn Guitars: Can an Old Business Learn New Tricks? 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.
Using analytics as competitive advantage
– Guitars Sawchyn has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Sawchyn Guitars: Can an Old Business Learn New Tricks? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guitars Sawchyn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
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.
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 Guitars Sawchyn.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sawchyn Guitars: Can an Old Business Learn New Tricks?, Guitars Sawchyn may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
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.
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? .
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.
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 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.
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.
