Fernwood Art Investments: Leading in an Imperfect Marketplace SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fernwood Art Investments: Leading in an Imperfect Marketplace
As Bruce Taub, founder of Fernwood, strolled past some of New York City's finest galleries, he pondered the unique challenges that Fernwood faced. Where others had seen the inefficiency of imperfect markets, Taub saw an opportunity to revolutionize the very nature of how Americans related to the fine art market. As its chairman and founder, Taub had built Fernwood to serve as a vehicle for his vision: to democratize investment in art such that "even my secretary could someday own (shares of art) in her 401(k)." As Taub walked through the doors at Christies, he knew that in the near future, he was going to decide the path that would initially guide Fernwood toward investors. He also knew that at least in the short-term, he needed the support of the art community, and he wondered what else he could or should do to win that support.
Authors :: Boris Groysberg, Joel Podolny, Tim Keller
Swot Analysis of "Fernwood Art Investments: Leading in an Imperfect Marketplace" written by Boris Groysberg, Joel Podolny, Tim Keller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fernwood Taub facing as an external strategic factors. Some of the topics covered in Fernwood Art Investments: Leading in an Imperfect Marketplace case study are - Strategic Management Strategies, Financial management, Leadership, Leading teams, Marketing, Strategy execution and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Fernwood Art Investments: Leading in an Imperfect Marketplace casestudy better are - – increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Fernwood Art Investments: Leading in an Imperfect Marketplace
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fernwood Art Investments: Leading in an Imperfect Marketplace case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fernwood Taub, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fernwood Taub 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 Fernwood Art Investments: Leading in an Imperfect Marketplace can be done for the following purposes –
1. Strategic planning using facts provided in Fernwood Art Investments: Leading in an Imperfect Marketplace case study
2. Improving business portfolio management of Fernwood Taub
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fernwood Taub
Strengths Fernwood Art Investments: Leading in an Imperfect Marketplace | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fernwood Taub in Fernwood Art Investments: Leading in an Imperfect Marketplace Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Fernwood Art Investments: Leading in an Imperfect Marketplace 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.
High brand equity
– Fernwood Taub has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fernwood Taub to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Fernwood Taub 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 Fernwood Taub is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fernwood Art Investments: Leading in an Imperfect Marketplace Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Fernwood Taub 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 Fernwood Art Investments: Leading in an Imperfect Marketplace - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Fernwood Taub digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fernwood Taub 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 Fernwood Taub 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 Fernwood Taub in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Fernwood Taub 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 Fernwood Art Investments: Leading in an Imperfect Marketplace HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Fernwood Taub in the sector have low bargaining power. Fernwood Art Investments: Leading in an Imperfect Marketplace has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fernwood Taub to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Fernwood Taub has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fernwood Taub 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.
Innovation driven organization
– Fernwood Taub is one of the most innovative firm in sector. Manager in Fernwood Art Investments: Leading in an Imperfect Marketplace Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– Fernwood Art Investments: Leading in an Imperfect Marketplace firm has clearly differentiated products in the market place. This has enabled Fernwood Taub to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fernwood Taub to invest into research and development (R&D) and innovation.
Weaknesses Fernwood Art Investments: Leading in an Imperfect Marketplace | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fernwood Art Investments: Leading in an Imperfect Marketplace are -
Slow to strategic competitive environment developments
– As Fernwood Art Investments: Leading in an Imperfect Marketplace HBR case study mentions - Fernwood Taub 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.
No frontier risks strategy
– After analyzing the HBR case study Fernwood Art Investments: Leading in an Imperfect Marketplace, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Taub has relatively successful track record of launching new products.
Need for greater diversity
– Fernwood Taub 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.
Increasing silos among functional specialists
– The organizational structure of Fernwood Taub is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fernwood Taub needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fernwood Taub to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Fernwood Taub products
– To increase the profitability and margins on the products, Fernwood Taub needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fernwood Art Investments: Leading in an Imperfect Marketplace, in the dynamic environment Fernwood Taub has struggled to respond to the nimble upstart competition. Fernwood Taub has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Fernwood Taub has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Boris Groysberg, Joel Podolny, Tim Keller suggests that, Fernwood Taub 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.
Products dominated business model
– Even though Fernwood Taub 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 - Fernwood Art Investments: Leading in an Imperfect Marketplace should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Fernwood Art Investments: Leading in an Imperfect Marketplace, it seems that the employees of Fernwood Taub 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 Fernwood Art Investments: Leading in an Imperfect Marketplace | 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 Fernwood Art Investments: Leading in an Imperfect Marketplace are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fernwood Taub is facing challenges because of the dominance of functional experts in the organization. Fernwood Art Investments: Leading in an Imperfect Marketplace 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.
Leveraging digital technologies
– Fernwood Taub can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fernwood Taub can use these opportunities to build new business models that can help the communities that Fernwood Taub operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fernwood Taub 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 Fernwood Taub in the consumer business. Now Fernwood Taub 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 Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fernwood Taub 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. Fernwood Taub 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.
Building a culture of innovation
– managers at Fernwood Taub 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 Leadership & Managing People segment.
Buying journey improvements
– Fernwood Taub can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fernwood Art Investments: Leading in an Imperfect Marketplace 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.
Creating value in data economy
– The success of analytics program of Fernwood Taub has opened avenues for new revenue streams for the organization in the industry. This can help Fernwood Taub to build a more holistic ecosystem as suggested in the Fernwood Art Investments: Leading in an Imperfect Marketplace case study. Fernwood Taub can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Fernwood Taub 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 Fernwood Taub 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 Fernwood Taub to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fernwood Taub in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Fernwood Taub can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Fernwood Art Investments: Leading in an Imperfect Marketplace External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fernwood Art Investments: Leading in an Imperfect Marketplace are -
High dependence on third party suppliers
– Fernwood Taub 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.
Stagnating economy with rate increase
– Fernwood Taub 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fernwood Taub with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Fernwood Taub business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Fernwood Taub needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fernwood Taub in the Leadership & Managing People industry. The Leadership & Managing People 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fernwood Art Investments: Leading in an Imperfect Marketplace, Fernwood Taub may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Consumer confidence and its impact on Fernwood Taub 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.
Environmental challenges
– Fernwood Taub 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. Fernwood Taub can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Fernwood Taub.
Shortening product life cycle
– it is one of the major threat that Fernwood Taub is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fernwood Taub can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Art Investments: Leading in an Imperfect Marketplace 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 Fernwood Taub needs to make to build a sustainable competitive advantage.