Rick Drumm (his real name), once a teen-age drumming contest winner, is facing the most promising, but also the most challenging, career transition in his career as a manager and a leader. While a second-year MBA student in a fast-track program, and working as President of Vic Firth Inc, a $20 million-sales drumstick manufacturer, he is being recruited to become president of J. D'Addario & Co., the largest manufacturer of musical accessories in the US. Having survived a series of interviews - by the headhunter, various Board members, and the Chairman of D'Addario - he is informed that he has to be interviewed by Jack Welch, the legendary CEO of General Electric, as the final step in his selection process. Rick has to decide how to prepare for this interview, how to approach this final test of his qualifications to assume the leadership of a much larger and more complex organization. The (C) case focuses on Jim D'Addario (the scion of the D'Addario clan, and Chairman and CEO of the company), and his views about the growing needs for executive leadership at this historically venerable musical accessories company. The case provides the history of this enterprise through various transitions in business focus and leadership, and of how Jim came to ask Welch to interview his "best candidate". The case also describes Jim's views on what the company needed at this point in time, and his perspective on Rick Drumm's key attributes. The case closes with Rick describing his initial steps to diagnose the most pressing problems at D'Addario, and the actions he took to take charge of the situation.
Swot Analysis of "Rick Drumm (C)" written by J. B.M. Kassarjian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that D'addario Rick facing as an external strategic factors. Some of the topics covered in Rick Drumm (C) case study are - Strategic Management Strategies, Leadership, Organizational culture, Professional transitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Rick Drumm (C) casestudy better are - – technology disruption, wage bills are increasing, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rick Drumm (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the D'addario Rick, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which D'addario Rick 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 Rick Drumm (C) can be done for the following purposes –
1. Strategic planning using facts provided in Rick Drumm (C) case study
2. Improving business portfolio management of D'addario Rick
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 D'addario Rick
Strengths Rick Drumm (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of D'addario Rick in Rick Drumm (C) Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Rick Drumm (C) firm has clearly differentiated products in the market place. This has enabled D'addario Rick to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped D'addario Rick to invest into research and development (R&D) and innovation.
High brand equity
– D'addario Rick has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled D'addario Rick to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of D'addario Rick in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– D'addario Rick is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– D'addario Rick 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 Rick Drumm (C) 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 D'addario Rick in the sector have low bargaining power. Rick Drumm (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps D'addario Rick to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– D'addario Rick has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. D'addario Rick 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.
Ability to lead change in Leadership & Managing People field
– D'addario Rick 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 D'addario Rick in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– D'addario Rick has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rick Drumm (C) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- D'addario Rick 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 D'addario Rick is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rick Drumm (C) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of D'addario Rick
– The covid-19 pandemic has put organizational resilience at the centre of everthing that D'addario Rick does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Rick Drumm (C) 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.
Weaknesses Rick Drumm (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rick Drumm (C) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rick Drumm (C), is just above the industry average. D'addario Rick 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.
Products dominated business model
– Even though D'addario Rick 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 - Rick Drumm (C) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
D'addario Rick has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Rick Drumm (C), it seems that the employees of D'addario Rick 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.
Workers concerns about automation
– As automation is fast increasing in the segment, D'addario Rick 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, D'addario Rick is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rick Drumm (C) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Rick Drumm (C) 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 D'addario Rick has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of D'addario Rick supply chain. Even after few cautionary changes mentioned in the HBR case study - Rick Drumm (C), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left D'addario Rick vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at D'addario Rick has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of D'addario Rick is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. D'addario Rick needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help D'addario Rick to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– D'addario Rick 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.
Opportunities Rick Drumm (C) | 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 Rick Drumm (C) 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 D'addario Rick 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.
Creating value in data economy
– The success of analytics program of D'addario Rick has opened avenues for new revenue streams for the organization in the industry. This can help D'addario Rick to build a more holistic ecosystem as suggested in the Rick Drumm (C) case study. D'addario Rick can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– D'addario Rick 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.
Manufacturing automation
– D'addario Rick can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Learning at scale
– Online learning technologies has now opened space for D'addario Rick 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 D'addario Rick 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects D'addario Rick can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, D'addario Rick is facing challenges because of the dominance of functional experts in the organization. Rick Drumm (C) 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.
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. D'addario Rick can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– D'addario Rick 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.
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 D'addario Rick in the consumer business. Now D'addario Rick can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, D'addario Rick can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Rick Drumm (C), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help D'addario Rick to increase its market reach. D'addario Rick 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 Rick Drumm (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rick Drumm (C) are -
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 D'addario Rick business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rick Drumm (C), D'addario Rick 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, D'addario Rick 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 Rick Drumm (C) .
Technology acceleration in Forth Industrial Revolution
– D'addario Rick has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, D'addario Rick needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for D'addario Rick 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.
Shortening product life cycle
– it is one of the major threat that D'addario Rick is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of D'addario Rick
– 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 D'addario Rick.
Consumer confidence and its impact on D'addario Rick 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.
Stagnating economy with rate increase
– D'addario Rick 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.
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. D'addario Rick needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 D'addario Rick.
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. D'addario Rick 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents D'addario Rick with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Rick Drumm (C) 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 Rick Drumm (C) 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 Rick Drumm (C) 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 Rick Drumm (C) 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 Rick Drumm (C) 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 D'addario Rick needs to make to build a sustainable competitive advantage.
