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 - – technology disruption, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
geopolitical disruptions, increasing energy prices, 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 -
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.
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.
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.
Training and development
– Pennycook Boats has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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.
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.
Innovation driven organization
– Pennycook Boats is one of the most innovative firm in sector. Manager in Pennycook Power Boats: Considering an Offer to Sell the Firm (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
High switching costs
– The high switching costs that Pennycook Boats 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.
Highly skilled collaborators
– Pennycook Boats 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of Pennycook Boats, firm in the HBR case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) 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 Pennycook Boats has relatively successful track record of launching new products.
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.
Need for greater diversity
– Pennycook Boats 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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
Learning at scale
– Online learning technologies has now opened space for Pennycook Boats 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.
Creating value in data economy
– The success of analytics program of Pennycook Boats has opened avenues for new revenue streams for the organization in the industry. This can help Pennycook Boats to build a more holistic ecosystem as suggested in the Pennycook Power Boats: Considering an Offer to Sell the Firm (A) case study. Pennycook Boats can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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. Pennycook Boats 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. Pennycook Boats 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.
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 Pennycook Boats in the consumer business. Now Pennycook Boats can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pennycook Power Boats: Considering an Offer to Sell the Firm (A), Pennycook Boats 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 .
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.
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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pennycook Boats 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 Pennycook Power Boats: Considering an Offer to Sell the Firm (A) .
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 Pennycook Boats.
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.
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.
