MacAfee Building Supply: Improving Performance Across Retail Stores (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MacAfee Building Supply: Improving Performance Across Retail Stores (A)
MacAfee Building Supply, a distributor of building supplies and heating and plumbing products, had grown to become the largest company of its kind in the world by incentivizing profit-maximizing behavior at the local level. John Smith, a senior manager at the company's Build subdivision, had nevertheless grown concerned that MacAfee's incentive scheme, which incentivized profits at the branch level, was actually hindering long-term global profitability by creating a lack of cooperation among branches and discouraging branch manager's investment in long-term endeavors. In this three-part case students first recommend strategies for better aligning employees to a long-term focus, and then evaluate the results of the program the company selected.
Authors :: Ann Bartel, Rachel Griffith, Maria Guadalupe, Andrew Neely
Swot Analysis of "MacAfee Building Supply: Improving Performance Across Retail Stores (A)" written by Ann Bartel, Rachel Griffith, Maria Guadalupe, Andrew Neely includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Macafee Branch facing as an external strategic factors. Some of the topics covered in MacAfee Building Supply: Improving Performance Across Retail Stores (A) case study are - Strategic Management Strategies, Balanced scorecard, Employee retention, Motivating people and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the MacAfee Building Supply: Improving Performance Across Retail Stores (A) casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, central banks are concerned over increasing inflation, technology disruption, cloud computing is disrupting traditional business models, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of MacAfee Building Supply: Improving Performance Across Retail Stores (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MacAfee Building Supply: Improving Performance Across Retail Stores (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Macafee Branch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) can be done for the following purposes –
1. Strategic planning using facts provided in MacAfee Building Supply: Improving Performance Across Retail Stores (A) case study
2. Improving business portfolio management of Macafee Branch
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 Macafee Branch
Strengths MacAfee Building Supply: Improving Performance Across Retail Stores (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Macafee Branch in MacAfee Building Supply: Improving Performance Across Retail Stores (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Macafee Branch in the sector have low bargaining power. MacAfee Building Supply: Improving Performance Across Retail Stores (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Macafee Branch 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 Macafee Branch digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Macafee Branch 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
– Macafee Branch is present in almost all the verticals within the industry. This has provided firm in MacAfee Building Supply: Improving Performance Across Retail Stores (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Strong track record of project management
– Macafee Branch is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Leadership & Managing People field
– Macafee Branch 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 Macafee Branch in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Macafee Branch
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Macafee Branch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Macafee Branch 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– MacAfee Building Supply: Improving Performance Across Retail Stores (A) firm has clearly differentiated products in the market place. This has enabled Macafee Branch to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Macafee Branch to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Macafee Branch 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.
High brand equity
– Macafee Branch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Macafee Branch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses MacAfee Building Supply: Improving Performance Across Retail Stores (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MacAfee Building Supply: Improving Performance Across Retail Stores (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A), it seems that the employees of Macafee Branch 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.
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 Macafee Branch supply chain. Even after few cautionary changes mentioned in the HBR case study - MacAfee Building Supply: Improving Performance Across Retail Stores (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Macafee Branch vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Macafee Branch 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Macafee Branch 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A), is just above the industry average. Macafee Branch 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.
Slow decision making process
– As mentioned earlier in the report, Macafee Branch 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. Macafee Branch 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.
Low market penetration in new markets
– Outside its home market of Macafee Branch, firm in the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MacAfee Building Supply: Improving Performance Across Retail Stores (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Macafee Branch has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Macafee Branch 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.
Aligning sales with marketing
– It come across in the case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) can leverage the sales team experience to cultivate customer relationships as Macafee Branch is planning to shift buying processes online.
Opportunities MacAfee Building Supply: Improving Performance Across Retail Stores (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) are -
Building a culture of innovation
– managers at Macafee Branch 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.
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 Macafee Branch 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Macafee Branch can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Macafee Branch to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Macafee Branch 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.
Better consumer reach
– The expansion of the 5G network will help Macafee Branch to increase its market reach. Macafee Branch 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Macafee Branch 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, MacAfee Building Supply: Improving Performance Across Retail Stores (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Macafee Branch 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Macafee Branch 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.
Learning at scale
– Online learning technologies has now opened space for Macafee Branch 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.
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. Macafee Branch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Macafee Branch 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.
Manufacturing automation
– Macafee Branch 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.
Threats MacAfee Building Supply: Improving Performance Across Retail Stores (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) are -
Shortening product life cycle
– it is one of the major threat that Macafee Branch is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
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 Macafee Branch in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Macafee Branch 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. Macafee Branch can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Macafee Branch business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Macafee Branch 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 MacAfee Building Supply: Improving Performance Across Retail Stores (A) .
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. Macafee Branch 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Macafee Branch 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. Macafee Branch needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Macafee Branch 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.
Regulatory challenges
– Macafee Branch 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.
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 Macafee Branch.
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. Macafee Branch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of MacAfee Building Supply: Improving Performance Across Retail Stores (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study MacAfee Building Supply: Improving Performance Across Retail Stores (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of MacAfee Building Supply: Improving Performance Across Retail Stores (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Macafee Branch needs to make to build a sustainable competitive advantage.