Ashmark Corporation: Dealing with a Supply Disruption SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ashmark Corporation: Dealing with a Supply Disruption
When Ashmark Corporation's largest supplier, Red Star Castings (Red Star), was forced to declare bankruptcy, Ashmark had to develop and implement a contingency plan, while also appeasing its customers, who were growing increasingly impatient for their parts to arrive. Since Red Star closed, Ashmark had been late on 200 units of production due to missing components. Although this figure represented less than 1 per cent of the company's total monthly shipments, things were likely to get more difficult, especially with the loss of key employees due to the stressful situation. In addition, the new supplier was having trouble bringing the tooling online, there were delays in the qualification and testing process, and the modest amount of inventory built up in advance of the bankruptcy had diminished. As Ashmark looked to move forwards, it would need to develop a much better sense of how to manage supply chain risk. Brent B. Moritz is affiliated with Pennsylvania State University. Christopher W. Craighead is affiliated with University of Tennessee.
Authors :: Brent B. Moritz, Christopher W. Craighead
Swot Analysis of "Ashmark Corporation: Dealing with a Supply Disruption" written by Brent B. Moritz, Christopher W. Craighead includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ashmark Red facing as an external strategic factors. Some of the topics covered in Ashmark Corporation: Dealing with a Supply Disruption case study are - Strategic Management Strategies, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ashmark Corporation: Dealing with a Supply Disruption casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, cloud computing is disrupting traditional business models, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Ashmark Corporation: Dealing with a Supply Disruption
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ashmark Corporation: Dealing with a Supply Disruption case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ashmark Red, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ashmark Red 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 Ashmark Corporation: Dealing with a Supply Disruption can be done for the following purposes –
1. Strategic planning using facts provided in Ashmark Corporation: Dealing with a Supply Disruption case study
2. Improving business portfolio management of Ashmark Red
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 Ashmark Red
Strengths Ashmark Corporation: Dealing with a Supply Disruption | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ashmark Red in Ashmark Corporation: Dealing with a Supply Disruption Harvard Business Review case study are -
Learning organization
- Ashmark Red 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 Ashmark Red is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ashmark Corporation: Dealing with a Supply Disruption Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Ashmark Red is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Ashmark Red in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ashmark Red is one of the most innovative firm in sector. Manager in Ashmark Corporation: Dealing with a Supply Disruption Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Ashmark Red 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.
Training and development
– Ashmark Red has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ashmark Corporation: Dealing with a Supply Disruption 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.
Effective Research and Development (R&D)
– Ashmark Red 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 Ashmark Corporation: Dealing with a Supply Disruption - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Ashmark Red has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ashmark Red 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.
Diverse revenue streams
– Ashmark Red is present in almost all the verticals within the industry. This has provided firm in Ashmark Corporation: Dealing with a Supply Disruption case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Operational resilience
– The operational resilience strategy in the Ashmark Corporation: Dealing with a Supply Disruption 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 recruit top talent
– Ashmark Red is one of the leading recruiters in the industry. Managers in the Ashmark Corporation: Dealing with a Supply Disruption are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Ashmark Red
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ashmark Red does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Ashmark Corporation: Dealing with a Supply Disruption | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ashmark Corporation: Dealing with a Supply Disruption are -
Aligning sales with marketing
– It come across in the case study Ashmark Corporation: Dealing with a Supply Disruption that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ashmark Corporation: Dealing with a Supply Disruption can leverage the sales team experience to cultivate customer relationships as Ashmark Red is planning to shift buying processes online.
Need for greater diversity
– Ashmark Red 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.
Interest costs
– Compare to the competition, Ashmark Red 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.
No frontier risks strategy
– After analyzing the HBR case study Ashmark Corporation: Dealing with a Supply Disruption, 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.
Slow decision making process
– As mentioned earlier in the report, Ashmark Red 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. Ashmark Red 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ashmark Corporation: Dealing with a Supply Disruption, in the dynamic environment Ashmark Red has struggled to respond to the nimble upstart competition. Ashmark Red has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Ashmark Red, firm in the HBR case study Ashmark Corporation: Dealing with a Supply Disruption needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Red has relatively successful track record of launching new products.
Lack of clear differentiation of Ashmark Red products
– To increase the profitability and margins on the products, Ashmark Red needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Ashmark Red has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Ashmark Red needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Ashmark Corporation: Dealing with a Supply Disruption | 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 Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Red 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, Ashmark Red is facing challenges because of the dominance of functional experts in the organization. Ashmark Corporation: Dealing with a Supply Disruption 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.
Developing new processes and practices
– Ashmark Red 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ashmark Red can use these opportunities to build new business models that can help the communities that Ashmark Red operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Ashmark Red 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.
Loyalty marketing
– Ashmark Red 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ashmark Red 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.
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. Ashmark Red 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. Ashmark Red 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ashmark Red 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 Ashmark Red to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Ashmark Red 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.
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 Ashmark Red in the consumer business. Now Ashmark Red can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ashmark Red 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. Ashmark Red can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Ashmark Corporation: Dealing with a Supply Disruption External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ashmark Corporation: Dealing with a Supply Disruption are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ashmark Red 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 Ashmark Corporation: Dealing with a Supply Disruption .
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 Ashmark Red business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Ashmark Red 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.
Increasing wage structure of Ashmark Red
– 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 Ashmark Red.
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. Ashmark Red can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ashmark Corporation: Dealing with a Supply Disruption, Ashmark Red 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 .
Shortening product life cycle
– it is one of the major threat that Ashmark Red is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Stagnating economy with rate increase
– Ashmark Red 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 Ashmark Red with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ashmark Red 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.
High dependence on third party suppliers
– Ashmark Red 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.
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 Ashmark Red in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Corporation: Dealing with a Supply Disruption 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 Ashmark Red needs to make to build a sustainable competitive advantage.