Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile
This is a Darden case study.This is a minicase, one of 10 in a set of short cases written to illustrate the business benefits companies realize through adopting sustainable business strategies. This minicase documents the technology and systems innovations behind Shaw's successful introduction of closed loop recyclable carpet tiles (EcoWorx), a disruptive innovation in the flooring industry.
Swot Analysis of "Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile" written by Andrea Larson, Jeff York includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecoworx Cradle facing as an external strategic factors. Some of the topics covered in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile case study are - Strategic Management Strategies, Innovation, International business, Strategy, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile casestudy better are - – technology disruption, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, wage bills are increasing, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecoworx Cradle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecoworx Cradle 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile can be done for the following purposes –
1. Strategic planning using facts provided in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile case study
2. Improving business portfolio management of Ecoworx Cradle
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 Ecoworx Cradle
Strengths Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecoworx Cradle in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile Harvard Business Review case study are -
Innovation driven organization
– Ecoworx Cradle is one of the most innovative firm in sector. Manager in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Ecoworx Cradle in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Ecoworx Cradle 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 Ecoworx Cradle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Ecoworx Cradle has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ecoworx Cradle has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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.
Ability to lead change in Leadership & Managing People field
– Ecoworx Cradle 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 Ecoworx Cradle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ecoworx Cradle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ecoworx Cradle 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 Ecoworx Cradle 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.
Ability to recruit top talent
– Ecoworx Cradle is one of the leading recruiters in the industry. Managers in the Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Ecoworx Cradle 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Ecoworx Cradle 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.
Analytics focus
– Ecoworx Cradle 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 Andrea Larson, Jeff York 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.
Weaknesses Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile, is just above the industry average. Ecoworx Cradle 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 operating costs
– Compare to the competitors, firm in the HBR case study Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Ecoworx Cradle 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile, it seems that the employees of Ecoworx Cradle 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.
Lack of clear differentiation of Ecoworx Cradle products
– To increase the profitability and margins on the products, Ecoworx Cradle needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Ecoworx Cradle 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 decision making process
– As mentioned earlier in the report, Ecoworx Cradle 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. Ecoworx Cradle 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.
Increasing silos among functional specialists
– The organizational structure of Ecoworx Cradle is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ecoworx Cradle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecoworx Cradle to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Ecoworx Cradle, firm in the HBR case study Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Andrea Larson, Jeff York suggests that, Ecoworx Cradle 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 Ecoworx Cradle 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 - Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Ecoworx Cradle has relatively successful track record of launching new products.
Opportunities Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile | 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile are -
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. Ecoworx Cradle 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. Ecoworx Cradle 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 Ecoworx Cradle 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ecoworx Cradle 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.
Developing new processes and practices
– Ecoworx Cradle can develop new processes and procedures in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ecoworx Cradle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Ecoworx Cradle 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.
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 Ecoworx Cradle 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.
Buying journey improvements
– Ecoworx Cradle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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
– Ecoworx Cradle 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecoworx Cradle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Ecoworx Cradle 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.
Creating value in data economy
– The success of analytics program of Ecoworx Cradle has opened avenues for new revenue streams for the organization in the industry. This can help Ecoworx Cradle to build a more holistic ecosystem as suggested in the Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile case study. Ecoworx Cradle can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Ecoworx Cradle 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.
Better consumer reach
– The expansion of the 5G network will help Ecoworx Cradle to increase its market reach. Ecoworx Cradle 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.
Threats Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Ecoworx Cradle in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Ecoworx Cradle 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecoworx Cradle with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Ecoworx Cradle is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Consumer confidence and its impact on Ecoworx Cradle 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.
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 Ecoworx Cradle 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. Ecoworx Cradle needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Ecoworx Cradle 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, Ecoworx Cradle 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile .
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. Ecoworx Cradle can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Ecoworx Cradle.
Weighted SWOT Analysis of Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Shaw Industries: EcoWorx and Cradle-to-Cradle Innovation in Carpet Tile 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 Ecoworx Cradle needs to make to build a sustainable competitive advantage.
