Pennycook Power Boats: Considering an Offer to Sell the Firm (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pennycook Power Boats: Considering an Offer to Sell the Firm (A)
In early 2016, the chief executive officer (CEO) of Pennycook Power Boats was approached by the CEO of a competitor, who was interested in purchasing Pennycook Power Boats and asked to see the company's audited financial statements. The CEO of Pennycook Power Boats faced a dilemma: he wanted to engage in a meaningful discussion about a possible sale but also needed to protect his firm's business interests.
Swot Analysis of "Pennycook Power Boats: Considering an Offer to Sell the Firm (A)" written by Eric A. Morse, Ken Mark, David Kennedy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pennycook Boats facing as an external strategic factors. Some of the topics covered in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) case study are - Strategic Management Strategies, Communication, Competition, Financial analysis, Manufacturing, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Pennycook Power Boats: Considering an Offer to Sell the Firm (A) casestudy better are - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Pennycook Power Boats: Considering an Offer to Sell the Firm (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pennycook Boats, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pennycook Boats 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) can be done for the following purposes –
1. Strategic planning using facts provided in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) case study
2. Improving business portfolio management of Pennycook Boats
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 Pennycook Boats
Strengths Pennycook Power Boats: Considering an Offer to Sell the Firm (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pennycook Boats in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) Harvard Business Review case study are -
Ability to recruit top talent
– Pennycook Boats is one of the leading recruiters in the industry. Managers in the Pennycook Power Boats: Considering an Offer to Sell the Firm (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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.
Diverse revenue streams
– Pennycook Boats is present in almost all the verticals within the industry. This has provided firm in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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.
Strong track record of project management
– Pennycook Boats is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Pennycook Boats 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 Pennycook Boats is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Pennycook Boats in the sector have low bargaining power. Pennycook Power Boats: Considering an Offer to Sell the Firm (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pennycook Boats to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Pennycook Boats 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 Eric A. Morse, Ken Mark, David Kennedy 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.
Effective Research and Development (R&D)
– Pennycook Boats 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Pennycook Boats 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 Pennycook Boats 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 Pennycook Boats digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pennycook Boats 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.
Superior customer experience
– The customer experience strategy of Pennycook Boats in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Pennycook Boats
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pennycook Boats does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Pennycook Power Boats: Considering an Offer to Sell the Firm (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pennycook Power Boats: Considering an Offer to Sell the Firm (A) are -
Capital Spending Reduction
– Even during the low interest decade, Pennycook Boats 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.
Aligning sales with marketing
– It come across in the case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) can leverage the sales team experience to cultivate customer relationships as Pennycook Boats is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pennycook Boats is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A), it seems that the employees of Pennycook Boats 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.
Interest costs
– Compare to the competition, Pennycook Boats has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Eric A. Morse, Ken Mark, David Kennedy suggests that, Pennycook Boats 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Boats 's lucrative customers.
Products dominated business model
– Even though Pennycook Boats 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 - Pennycook Power Boats: Considering an Offer to Sell the Firm (A) should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Pennycook Boats 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.
Lack of clear differentiation of Pennycook Boats products
– To increase the profitability and margins on the products, Pennycook Boats needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A), in the dynamic environment Pennycook Boats has struggled to respond to the nimble upstart competition. Pennycook Boats has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Pennycook Power Boats: Considering an Offer to Sell the Firm (A) | 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) are -
Using analytics as competitive advantage
– Pennycook Boats 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pennycook Boats to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Pennycook Boats can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pennycook Boats 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.
Manufacturing automation
– Pennycook Boats 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pennycook Boats can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Pennycook Boats 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.
Loyalty marketing
– Pennycook Boats 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pennycook Boats 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 Pennycook Boats to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Pennycook Boats to increase its market reach. Pennycook Boats 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.
Buying journey improvements
– Pennycook Boats can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pennycook Boats 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, Pennycook Power Boats: Considering an Offer to Sell the Firm (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Pennycook Boats 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pennycook Boats 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.
Threats Pennycook Power Boats: Considering an Offer to Sell the Firm (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A) are -
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. Pennycook Boats 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 Pennycook Boats with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Pennycook Boats 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.
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. Pennycook Boats can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Pennycook Boats 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.
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 Pennycook Boats business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pennycook Boats 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.
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.
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. Pennycook Boats needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Pennycook Boats has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Pennycook Boats 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.
Stagnating economy with rate increase
– Pennycook Boats 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.
Shortening product life cycle
– it is one of the major threat that Pennycook Boats 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 Pennycook Boats
– 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 Pennycook Boats.
Weighted SWOT Analysis of Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Boats needs to make to build a sustainable competitive advantage.