River Bend Trading: Navigating Rough Waters SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of River Bend Trading: Navigating Rough Waters
The case challenges students to develop a turnaround strategy for a small-town retail business following the loss of a major supplier. The students must develop a retrenchment strategy (i.e., cost and asset reductions) and a recovery strategy to rebuild the core business and develop the adjacent possibilities (i.e., adjacencies). It was February 2009 in Columbus, Montana, population 2,000. Lois Frerck (frair ic) owned River Bend Trading (RBT), an apparel and gift shop located next to the Montana Silversmiths Outlet (Silversmiths). Silversmiths manufactured silver jewelry, rodeo trophy belt buckles, and other western products in Columbus. RBT was a Silversmiths' dealer, and 50 percent of its sales came from Silversmith's products. In 2006, RBT's sales peaked at $485,951, and Silversmiths decided to sell directly to its customers over the internet. In January 2007, it revoked RBT's dealer status. Devastated, Lois and Mary analyzed their options, but they were unable to offset the loss of Silversmiths' products with new products. With the onset of the recession in 2007, RBT's sales plummeted. In November 2008, Mary told Lois, "The business is dying. I can't handle it. I'm out of here! I'll take my half of the debt," and she left. As the recession took its toll on local businesses and the tourist trade, RBT's 2008 sales fell to $220,023. In February 2009 Lois asked her sister Amy, "What should I do?"
Swot Analysis of "River Bend Trading: Navigating Rough Waters" written by Tom D. Hinthorne, Patricia A. Holman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Silversmiths Lois facing as an external strategic factors. Some of the topics covered in River Bend Trading: Navigating Rough Waters case study are - Strategic Management Strategies, Financial analysis, Financial management, Growth strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the River Bend Trading: Navigating Rough Waters casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing household debt because of falling income levels, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of River Bend Trading: Navigating Rough Waters
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in River Bend Trading: Navigating Rough Waters case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Silversmiths Lois, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Silversmiths Lois 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 River Bend Trading: Navigating Rough Waters can be done for the following purposes –
1. Strategic planning using facts provided in River Bend Trading: Navigating Rough Waters case study
2. Improving business portfolio management of Silversmiths Lois
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 Silversmiths Lois
Strengths River Bend Trading: Navigating Rough Waters | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Silversmiths Lois in River Bend Trading: Navigating Rough Waters Harvard Business Review case study are -
Analytics focus
– Silversmiths Lois 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 Tom D. Hinthorne, Patricia A. Holman 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Silversmiths Lois digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Silversmiths Lois 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.
Effective Research and Development (R&D)
– Silversmiths Lois 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 River Bend Trading: Navigating Rough Waters - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Silversmiths Lois
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Silversmiths Lois does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Leadership & Managing People industry
– River Bend Trading: Navigating Rough Waters firm has clearly differentiated products in the market place. This has enabled Silversmiths Lois to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Silversmiths Lois to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Silversmiths Lois 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.
Diverse revenue streams
– Silversmiths Lois is present in almost all the verticals within the industry. This has provided firm in River Bend Trading: Navigating Rough Waters 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.
Low bargaining power of suppliers
– Suppliers of Silversmiths Lois in the sector have low bargaining power. River Bend Trading: Navigating Rough Waters has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Silversmiths Lois to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Silversmiths Lois is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Silversmiths Lois 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.
Ability to lead change in Leadership & Managing People field
– Silversmiths Lois 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 Silversmiths Lois in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Silversmiths Lois 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 River Bend Trading: Navigating Rough Waters HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses River Bend Trading: Navigating Rough Waters | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of River Bend Trading: Navigating Rough Waters are -
No frontier risks strategy
– After analyzing the HBR case study River Bend Trading: Navigating Rough Waters, 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.
Slow to strategic competitive environment developments
– As River Bend Trading: Navigating Rough Waters HBR case study mentions - Silversmiths Lois 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.
Capital Spending Reduction
– Even during the low interest decade, Silversmiths Lois 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.
Products dominated business model
– Even though Silversmiths Lois 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 - River Bend Trading: Navigating Rough Waters should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Silversmiths Lois 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Tom D. Hinthorne, Patricia A. Holman suggests that, Silversmiths Lois 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 River Bend Trading: Navigating Rough Waters 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 Silversmiths Lois has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study River Bend Trading: Navigating Rough Waters, in the dynamic environment Silversmiths Lois has struggled to respond to the nimble upstart competition. Silversmiths Lois has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study River Bend Trading: Navigating Rough Waters, it seems that the employees of Silversmiths Lois 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.
Slow decision making process
– As mentioned earlier in the report, Silversmiths Lois 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. Silversmiths Lois 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.
Increasing silos among functional specialists
– The organizational structure of Silversmiths Lois is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Silversmiths Lois needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Silversmiths Lois to focus more on services rather than just following the product oriented approach.
Opportunities River Bend Trading: Navigating Rough Waters | 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 River Bend Trading: Navigating Rough Waters are -
Using analytics as competitive advantage
– Silversmiths Lois 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 River Bend Trading: Navigating Rough Waters - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Silversmiths Lois to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Silversmiths Lois can use these opportunities to build new business models that can help the communities that Silversmiths Lois operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Silversmiths Lois 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 Silversmiths Lois can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Silversmiths Lois 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.
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. Silversmiths Lois can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Silversmiths Lois can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. River Bend Trading: Navigating Rough Waters 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.
Developing new processes and practices
– Silversmiths Lois 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Silversmiths Lois 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Silversmiths Lois is facing challenges because of the dominance of functional experts in the organization. River Bend Trading: Navigating Rough Waters 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Silversmiths Lois 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, River Bend Trading: Navigating Rough Waters, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Silversmiths Lois 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.
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 Silversmiths Lois in the consumer business. Now Silversmiths Lois can target international markets with far fewer capital restrictions requirements than the existing system.
Threats River Bend Trading: Navigating Rough Waters External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study River Bend Trading: Navigating Rough Waters are -
Regulatory challenges
– Silversmiths Lois 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.
Stagnating economy with rate increase
– Silversmiths Lois 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. Silversmiths Lois 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.
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 Silversmiths Lois.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Silversmiths Lois 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.
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. Silversmiths Lois needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on Silversmiths Lois demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study River Bend Trading: Navigating Rough Waters, Silversmiths Lois 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 .
Environmental challenges
– Silversmiths Lois 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. Silversmiths Lois can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Silversmiths Lois has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Silversmiths Lois 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.
Shortening product life cycle
– it is one of the major threat that Silversmiths Lois 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 Silversmiths Lois
– 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 Silversmiths Lois.
Weighted SWOT Analysis of River Bend Trading: Navigating Rough Waters 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 River Bend Trading: Navigating Rough Waters 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 River Bend Trading: Navigating Rough Waters 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 River Bend Trading: Navigating Rough Waters 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 River Bend Trading: Navigating Rough Waters 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 Silversmiths Lois needs to make to build a sustainable competitive advantage.
