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 - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
Learning organization
- Macafee Branch 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 Macafee Branch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MacAfee Building Supply: Improving Performance Across Retail Stores (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Macafee Branch is one of the most innovative firm in sector. Manager in MacAfee Building Supply: Improving Performance Across Retail Stores (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the MacAfee Building Supply: Improving Performance Across Retail Stores (A) 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.
Successful track record of launching new products
– Macafee Branch has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Macafee Branch 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.
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.
Ability to recruit top talent
– Macafee Branch is one of the leading recruiters in the industry. Managers in the MacAfee Building Supply: Improving Performance Across Retail Stores (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Macafee Branch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in MacAfee Building Supply: Improving Performance Across Retail Stores (A) 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.
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.
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.
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.
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.
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 -
Lack of clear differentiation of Macafee Branch products
– To increase the profitability and margins on the products, Macafee Branch needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Capital Spending Reduction
– Even during the low interest decade, Macafee Branch 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.
Slow to strategic competitive environment developments
– As MacAfee Building Supply: Improving Performance Across Retail Stores (A) HBR case study mentions - Macafee Branch 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.
Increasing silos among functional specialists
– The organizational structure of Macafee Branch is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Macafee Branch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Macafee Branch to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study MacAfee Building Supply: Improving Performance Across Retail Stores (A), 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study MacAfee Building Supply: Improving Performance Across Retail Stores (A), in the dynamic environment Macafee Branch has struggled to respond to the nimble upstart competition. Macafee Branch has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 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.
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 -
Creating value in data economy
– The success of analytics program of Macafee Branch has opened avenues for new revenue streams for the organization in the industry. This can help Macafee Branch to build a more holistic ecosystem as suggested in the MacAfee Building Supply: Improving Performance Across Retail Stores (A) case study. Macafee Branch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Loyalty marketing
– Macafee Branch has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Macafee Branch in the consumer business. Now Macafee Branch can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Macafee Branch can use these opportunities to build new business models that can help the communities that Macafee Branch operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
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.
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.
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.
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. Macafee Branch 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. Macafee Branch 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 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Macafee Branch is facing challenges because of the dominance of functional experts in the organization. MacAfee Building Supply: Improving Performance Across Retail Stores (A) 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.
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 -
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.
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.
High dependence on third party suppliers
– Macafee Branch high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Macafee Branch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Macafee Branch has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Macafee Branch 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.
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) .
Increasing wage structure of Macafee Branch
– 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 Macafee Branch.
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.
Stagnating economy with rate increase
– Macafee Branch 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.
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.
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.
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.
