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 - – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing commodity prices, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , wage bills are increasing,
increasing household debt because of falling income levels, there is backlash against globalization, 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 -
Low bargaining power of suppliers
– Suppliers of Ashmark Red in the sector have low bargaining power. Ashmark Corporation: Dealing with a Supply Disruption has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ashmark Red to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Ashmark Corporation: Dealing with a Supply Disruption firm has clearly differentiated products in the market place. This has enabled Ashmark Red to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ashmark Red to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Ashmark Red 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 Ashmark Corporation: Dealing with a Supply Disruption HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Ashmark Red 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.
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.
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.
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.
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.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ashmark Red is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ashmark Corporation: Dealing with a Supply Disruption can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ashmark Corporation: Dealing with a Supply Disruption, it seems that the employees of Ashmark Red 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.
High cash cycle compare to competitors
Ashmark Red 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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ashmark Corporation: Dealing with a Supply Disruption, is just above the industry average. Ashmark Red 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.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Ashmark Red is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ashmark Red needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ashmark Red to focus more on services rather than just following the product oriented approach.
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 -
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.
Better consumer reach
– The expansion of the 5G network will help Ashmark Red to increase its market reach. Ashmark Red 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.
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.
Building a culture of innovation
– managers at Ashmark Red 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ashmark Red can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
Leveraging digital technologies
– Ashmark Red 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.
Creating value in data economy
– The success of analytics program of Ashmark Red has opened avenues for new revenue streams for the organization in the industry. This can help Ashmark Red to build a more holistic ecosystem as suggested in the Ashmark Corporation: Dealing with a Supply Disruption case study. Ashmark Red can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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 -
Environmental challenges
– Ashmark Red 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. Ashmark Red can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 .
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.
Regulatory challenges
– Ashmark Red needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Technology acceleration in Forth Industrial Revolution
– Ashmark Red has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ashmark Red 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.
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 Ashmark Red.
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.
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 .
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.
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.
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.
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. Ashmark Red 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.
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. Ashmark Red needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
