Cervus Equipment Corporation: Harvesting a New Future SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cervus Equipment Corporation: Harvesting a New Future
Cervus Equipment Corporation has grown its business substantially over the past 10 years through regional acquisitions and strong organic growth. The company was founded to manage and consolidate farm equipment dealerships in western Canada but, in partnership with original equipment manufacturers, has branched into the construction equipment and long haul trucking manufacturing industries and has moved into New Zealand and Australia. The board of directors is now looking for the new chief executive officer (CEO) to chart an innovative growth strategy that will see the company triple in size over the next five years. The market fundamentals to support this growth are quite strong and realistic; however, the growth opportunities in the company's traditional Canadian markets are not sufficient and its customers' requirements are being driven to new levels of complexity due to a technology revolution happening within the industry. At the same time, its experience overseas has ultimately provided an opportunity to develop a greater understanding of the differences in international markets and new cultures. The CEO needs to come up with a growth plan that puts Cervus Equipment into non-traditional markets or new industries while addressing the changes happening in the industry. Daniel Doiron is affiliated with University of New Brunswick Saint John. Davis Schryer is affiliated with Cervus Equipment Corporation.
Swot Analysis of "Cervus Equipment Corporation: Harvesting a New Future" written by Daniel Doiron, Davis Schryer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cervus Equipment facing as an external strategic factors. Some of the topics covered in Cervus Equipment Corporation: Harvesting a New Future case study are - Strategic Management Strategies, International business, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Cervus Equipment Corporation: Harvesting a New Future casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing energy prices, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Cervus Equipment Corporation: Harvesting a New Future
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cervus Equipment Corporation: Harvesting a New Future case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cervus Equipment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cervus Equipment 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 Cervus Equipment Corporation: Harvesting a New Future can be done for the following purposes –
1. Strategic planning using facts provided in Cervus Equipment Corporation: Harvesting a New Future case study
2. Improving business portfolio management of Cervus Equipment
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 Cervus Equipment
Strengths Cervus Equipment Corporation: Harvesting a New Future | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cervus Equipment in Cervus Equipment Corporation: Harvesting a New Future Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Cervus Equipment 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 Cervus Equipment in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– Cervus Equipment Corporation: Harvesting a New Future firm has clearly differentiated products in the market place. This has enabled Cervus Equipment to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Cervus Equipment to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Cervus Equipment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cervus Equipment 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.
Learning organization
- Cervus Equipment 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 Cervus Equipment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cervus Equipment Corporation: Harvesting a New Future Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Cervus Equipment 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 Cervus Equipment Corporation: Harvesting a New Future 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.
Innovation driven organization
– Cervus Equipment is one of the most innovative firm in sector. Manager in Cervus Equipment Corporation: Harvesting a New Future Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Cervus Equipment 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 Daniel Doiron, Davis Schryer 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.
High brand equity
– Cervus Equipment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cervus Equipment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Cervus Equipment in the sector have low bargaining power. Cervus Equipment Corporation: Harvesting a New Future has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cervus Equipment to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Cervus Equipment
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cervus Equipment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Cervus Equipment has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cervus Equipment Corporation: Harvesting a New Future 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.
Weaknesses Cervus Equipment Corporation: Harvesting a New Future | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cervus Equipment Corporation: Harvesting a New Future are -
Slow to strategic competitive environment developments
– As Cervus Equipment Corporation: Harvesting a New Future HBR case study mentions - Cervus Equipment 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, Cervus Equipment 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.
Lack of clear differentiation of Cervus Equipment products
– To increase the profitability and margins on the products, Cervus Equipment needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Cervus Equipment 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. Cervus Equipment 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.
Aligning sales with marketing
– It come across in the case study Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment Corporation: Harvesting a New Future can leverage the sales team experience to cultivate customer relationships as Cervus Equipment is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cervus Equipment Corporation: Harvesting a New Future, it seems that the employees of Cervus Equipment 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.
Increasing silos among functional specialists
– The organizational structure of Cervus Equipment is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Cervus Equipment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cervus Equipment to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cervus Equipment Corporation: Harvesting a New Future, is just above the industry average. Cervus Equipment 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 Cervus Equipment, firm in the HBR case study Cervus Equipment Corporation: Harvesting a New Future needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cervus Equipment Corporation: Harvesting a New Future, in the dynamic environment Cervus Equipment has struggled to respond to the nimble upstart competition. Cervus Equipment has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Cervus Equipment 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.
Opportunities Cervus Equipment Corporation: Harvesting a New Future | 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 Cervus Equipment Corporation: Harvesting a New Future are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Cervus Equipment 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.
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 Cervus Equipment 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.
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. Cervus Equipment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cervus Equipment can use these opportunities to build new business models that can help the communities that Cervus Equipment operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Cervus Equipment 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.
Better consumer reach
– The expansion of the 5G network will help Cervus Equipment to increase its market reach. Cervus Equipment 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.
Leveraging digital technologies
– Cervus Equipment 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cervus Equipment is facing challenges because of the dominance of functional experts in the organization. Cervus Equipment Corporation: Harvesting a New Future 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.
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 Cervus Equipment in the consumer business. Now Cervus Equipment can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Cervus Equipment 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.
Building a culture of innovation
– managers at Cervus Equipment 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.
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. Cervus Equipment 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. Cervus Equipment 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cervus Equipment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Cervus Equipment Corporation: Harvesting a New Future External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cervus Equipment Corporation: Harvesting a New Future are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cervus Equipment in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Cervus Equipment has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Cervus Equipment 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 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. Cervus Equipment needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Cervus Equipment 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. Cervus Equipment can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cervus Equipment Corporation: Harvesting a New Future, Cervus Equipment 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 .
Consumer confidence and its impact on Cervus Equipment 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cervus Equipment 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
– Cervus Equipment 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.
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 Cervus Equipment in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
Shortening product life cycle
– it is one of the major threat that Cervus Equipment is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Cervus Equipment 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 Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment Corporation: Harvesting a New Future 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 Cervus Equipment needs to make to build a sustainable competitive advantage.