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 - – increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
geopolitical disruptions, there is backlash against globalization, 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 -
High brand equity
– Family Laws has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Family Laws to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Operational resilience
– The operational resilience strategy in the Aurum Furniture and In-Law Management 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.
Highly skilled collaborators
– Family Laws 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 Aurum Furniture and In-Law Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Family Laws 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 Family Laws is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aurum Furniture and In-Law Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Training and development
– Family Laws has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Aurum Furniture and In-Law Management 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.
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.
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.
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.
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.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of Family Laws is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Family Laws needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Family Laws to focus more on services rather than just following the product oriented approach.
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.
High cash cycle compare to competitors
Family Laws 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.
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.
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.
Slow to strategic competitive environment developments
– As Aurum Furniture and In-Law Management HBR case study mentions - Family Laws takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aurum Furniture and In-Law Management, in the dynamic environment Family Laws has struggled to respond to the nimble upstart competition. Family Laws has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Aurum Furniture and In-Law Management 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 Aurum Furniture and In-Law Management can leverage the sales team experience to cultivate customer relationships as Family Laws is planning to shift buying processes online.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Daniel T Holt, Jess H Chua, James J Chrisman, Shanan R Litchfield suggests that, Family Laws 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 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.
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 -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Family Laws 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. Family Laws 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. Family Laws 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 Family Laws 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.
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. Family Laws 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 Family Laws 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Family Laws can use these opportunities to build new business models that can help the communities that Family Laws operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
Creating value in data economy
– The success of analytics program of Family Laws has opened avenues for new revenue streams for the organization in the industry. This can help Family Laws to build a more holistic ecosystem as suggested in the Aurum Furniture and In-Law Management case study. Family Laws can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
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 -
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.
Shortening product life cycle
– it is one of the major threat that Family Laws is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Family Laws 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.
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. Family Laws can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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 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.
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.
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.
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. Family Laws needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
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.