Case Study Description of Aurum Furniture and In-Law Management
One of the most complex challenges for a family business is when an in-law joins the firm. In-laws are part of the family through marriage; but they form a group of unique stakeholders in the family firm as marriage can be severed but blood cannot be changed. Consequently, in-laws are not always viewed as full-fledged family members. While the firm's founder and family members face challenges as they consider integrating in-laws into the family firm, the in-laws face many challenges in joining a family firm as well. This case illustrates these tensions by tracing John Malone's involvement working as an in-law for Aurum Furniture, a small family business located in a large Midwestern city in the U.S. Issues that would have been straightforward in a non-family firm were anything but that in the non-professionalized family firm. The case provides considerable flexibility with instructors having opportunity to discuss the dynamics among members of a small family business. While we emphasize the challenges faced by in-laws, the case is particularly well-suited to facilitate a more general discussion on the challenges that an individual encounters as he or she joins a non-professionalized family firm. As such, it can be used with family business owners as they reflect on their concept of family and the roles of individual members-especially, in-laws-and the firm's decisions to professionalize. The case can be used with graduate and undergraduate students and workshops in family business or small business management.
Authors :: Daniel T Holt, Jess H Chua, James J Chrisman, Shanan R Litchfield
Swot Analysis of "Aurum Furniture and In-Law Management" written by Daniel T Holt, Jess H Chua, James J Chrisman, Shanan R Litchfield includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Family Laws facing as an external strategic factors. Some of the topics covered in Aurum Furniture and In-Law Management case study are - Strategic Management Strategies, Succession planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Aurum Furniture and In-Law Management casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Aurum Furniture and In-Law Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aurum Furniture and In-Law Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Family Laws, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Family Laws 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 Aurum Furniture and In-Law Management can be done for the following purposes –
1. Strategic planning using facts provided in Aurum Furniture and In-Law Management case study
2. Improving business portfolio management of Family Laws
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 Family Laws
Strengths Aurum Furniture and In-Law Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Family Laws in Aurum Furniture and In-Law Management Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Family Laws 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 Family Laws in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Family Laws
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Family Laws does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Family Laws in the sector have low bargaining power. Aurum Furniture and In-Law Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Family Laws to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Family Laws is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Aurum Furniture and In-Law Management firm has clearly differentiated products in the market place. This has enabled Family Laws to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Family Laws to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Family Laws in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Family Laws is present in almost all the verticals within the industry. This has provided firm in Aurum Furniture and In-Law Management 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.
Innovation driven organization
– Family Laws is one of the most innovative firm in sector. Manager in Aurum Furniture and In-Law Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Family Laws 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Family Laws digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Family Laws 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.
Successful track record of launching new products
– Family Laws has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Family Laws has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Family Laws is one of the leading recruiters in the industry. Managers in the Aurum Furniture and In-Law Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Aurum Furniture and In-Law Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aurum Furniture and In-Law Management are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Family Laws supply chain. Even after few cautionary changes mentioned in the HBR case study - Aurum Furniture and In-Law Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Family Laws vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Family Laws is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aurum Furniture and In-Law Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Aurum Furniture and In-Law Management 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 Family Laws 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Family Laws 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. Family Laws 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Aurum Furniture and In-Law Management 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 Family Laws has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Family Laws 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Aurum Furniture and In-Law Management, is just above the industry average. Family Laws 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.
Low market penetration in new markets
– Outside its home market of Family Laws, firm in the HBR case study Aurum Furniture and In-Law Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Aurum Furniture and In-Law Management, 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.
Skills based hiring
– The stress on hiring functional specialists at Family Laws has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Family Laws 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 - Aurum Furniture and In-Law Management should strive to include more intangible value offerings along with its core products and services.
Opportunities Aurum Furniture and In-Law Management | 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 Aurum Furniture and In-Law Management are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Family Laws 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 Family Laws to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Family Laws 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.
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 Family Laws in the consumer business. Now Family Laws can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Family Laws 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 Aurum Furniture and In-Law Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Family Laws to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Family Laws 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.
Developing new processes and practices
– Family Laws 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Family Laws can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Family Laws to increase its market reach. Family Laws 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Family Laws 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Family Laws 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, Aurum Furniture and In-Law Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Family Laws is facing challenges because of the dominance of functional experts in the organization. Aurum Furniture and In-Law Management 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.
Buying journey improvements
– Family Laws can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aurum Furniture and In-Law Management 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.
Loyalty marketing
– Family Laws 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.
Threats Aurum Furniture and In-Law Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aurum Furniture and In-Law Management are -
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 Family Laws in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Family Laws business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Family Laws 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.
Environmental challenges
– Family Laws 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. Family Laws can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Family Laws
– 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 Family Laws.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Family Laws with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aurum Furniture and In-Law Management, Family Laws 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
– Family Laws has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Family Laws 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.
High dependence on third party suppliers
– Family Laws 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.
Stagnating economy with rate increase
– Family Laws 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.
Regulatory challenges
– Family Laws 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Family Laws 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 Aurum Furniture and In-Law Management .
Weighted SWOT Analysis of Aurum Furniture and In-Law Management 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 Aurum Furniture and In-Law Management 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 Aurum Furniture and In-Law Management 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 Aurum Furniture and In-Law Management 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 Aurum Furniture and In-Law Management 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 Family Laws needs to make to build a sustainable competitive advantage.
