Babbitt Ranches: Governance and Strategic Planning in a Family Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Babbitt Ranches: Governance and Strategic Planning in a Family Business
The board of Babbitt Ranches had officially adopted a constitution to guide the future of the family business. Babbitt Ranches was a fourth-generation, 122 year old family firm with extensive landholdings in Arizona. The firm's board recognized responsibility and obligation to organizational, ecological, economical, and community values through multiple bottom-line criteria in the new constitution. In addition, the constitution reinforced the family's heritage by outlining a philosophy designed to direct processes, interactions, and critical decisions. Several business opportunities were being considered by the board that could be evaluated using the framework provided by the constitution. The challenge for Billy Cordasco, the firm's president, was to operationalize the constitution to evaluate the current set of opportunities and to ensure the constitution was used as a "touchstone" for firm decisions on an ongoing basis.
Swot Analysis of "Babbitt Ranches: Governance and Strategic Planning in a Family Business" written by Lisa F Majure, Kathryn S Savage includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Constitution Babbitt facing as an external strategic factors. Some of the topics covered in Babbitt Ranches: Governance and Strategic Planning in a Family Business case study are - Strategic Management Strategies, Entrepreneurship, Ethics, Strategic planning, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Babbitt Ranches: Governance and Strategic Planning in a Family Business casestudy better are - – increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing transportation and logistics costs, increasing energy prices,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Babbitt Ranches: Governance and Strategic Planning in a Family Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Babbitt Ranches: Governance and Strategic Planning in a Family Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Constitution Babbitt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Constitution Babbitt 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business can be done for the following purposes –
1. Strategic planning using facts provided in Babbitt Ranches: Governance and Strategic Planning in a Family Business case study
2. Improving business portfolio management of Constitution Babbitt
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 Constitution Babbitt
Strengths Babbitt Ranches: Governance and Strategic Planning in a Family Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Constitution Babbitt in Babbitt Ranches: Governance and Strategic Planning in a Family Business Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Constitution Babbitt in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Constitution Babbitt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Constitution Babbitt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Constitution Babbitt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Constitution Babbitt has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Constitution Babbitt in the sector have low bargaining power. Babbitt Ranches: Governance and Strategic Planning in a Family Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Constitution Babbitt to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Innovation & Entrepreneurship field
– Constitution Babbitt 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 Constitution Babbitt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Constitution Babbitt 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 Lisa F Majure, Kathryn S Savage can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Constitution Babbitt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Constitution Babbitt 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.
Organizational Resilience of Constitution Babbitt
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Constitution Babbitt does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Constitution Babbitt 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 Constitution Babbitt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Babbitt Ranches: Governance and Strategic Planning in a Family Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Constitution Babbitt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Babbitt Ranches: Governance and Strategic Planning in a Family Business firm has clearly differentiated products in the market place. This has enabled Constitution Babbitt to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Constitution Babbitt to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Constitution Babbitt 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Babbitt Ranches: Governance and Strategic Planning in a Family Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Babbitt Ranches: Governance and Strategic Planning in a Family Business are -
Products dominated business model
– Even though Constitution Babbitt 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 - Babbitt Ranches: Governance and Strategic Planning in a Family Business should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Constitution Babbitt 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 strategic competitive environment developments
– As Babbitt Ranches: Governance and Strategic Planning in a Family Business HBR case study mentions - Constitution Babbitt 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.
Increasing silos among functional specialists
– The organizational structure of Constitution Babbitt is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Constitution Babbitt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Constitution Babbitt to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Babbitt Ranches: Governance and Strategic Planning in a Family Business, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Babbitt Ranches: Governance and Strategic Planning in a Family Business, is just above the industry average. Constitution Babbitt 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Babbitt Ranches: Governance and Strategic Planning in a Family Business, in the dynamic environment Constitution Babbitt has struggled to respond to the nimble upstart competition. Constitution Babbitt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Constitution Babbitt 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.
Need for greater diversity
– Constitution Babbitt 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Constitution Babbitt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Babbitt Ranches: Governance and Strategic Planning in a Family Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Constitution Babbitt 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. Constitution Babbitt 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.
Opportunities Babbitt Ranches: Governance and Strategic Planning in a Family Business | 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Constitution Babbitt 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Constitution Babbitt is facing challenges because of the dominance of functional experts in the organization. Babbitt Ranches: Governance and Strategic Planning in a Family Business 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.
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. Constitution Babbitt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Constitution Babbitt 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 Constitution Babbitt to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Constitution Babbitt 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
– Constitution Babbitt 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.
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. Constitution Babbitt 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 Constitution Babbitt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Constitution Babbitt in the consumer business. Now Constitution Babbitt can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Constitution Babbitt 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.
Building a culture of innovation
– managers at Constitution Babbitt 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.
Better consumer reach
– The expansion of the 5G network will help Constitution Babbitt to increase its market reach. Constitution Babbitt 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Constitution Babbitt 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.
Threats Babbitt Ranches: Governance and Strategic Planning in a Family Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Babbitt Ranches: Governance and Strategic Planning in a Family Business are -
Shortening product life cycle
– it is one of the major threat that Constitution Babbitt is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Constitution Babbitt
– 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 Constitution Babbitt.
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 Constitution Babbitt.
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.
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 Constitution Babbitt business can come under increasing regulations regarding data privacy, data security, etc.
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. Constitution Babbitt 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Babbitt Ranches: Governance and Strategic Planning in a Family Business, Constitution Babbitt 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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Constitution Babbitt 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.
High dependence on third party suppliers
– Constitution Babbitt 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.
Technology acceleration in Forth Industrial Revolution
– Constitution Babbitt has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Constitution Babbitt 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.
Stagnating economy with rate increase
– Constitution Babbitt 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.
Environmental challenges
– Constitution Babbitt 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. Constitution Babbitt can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Babbitt Ranches: Governance and Strategic Planning in a Family Business 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 Constitution Babbitt needs to make to build a sustainable competitive advantage.
