Cavco (CVCO) SWOT Analysis / TOWS Matrix / MBA Resources
Mobile Homes & RVs
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Cavco (United States)
Based on various researches at Oak Spring University , Cavco is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing energy prices, geopolitical disruptions, cloud computing is disrupting traditional business models,
technology disruption, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cavco can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cavco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cavco 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 Cavco can be done for the following purposes –
1. Strategic planning of Cavco
2. Improving business portfolio management of Cavco
3. Assessing feasibility of the new initiative in United States
4. Making a Mobile Homes & RVs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cavco
Strengths of Cavco | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cavco are -
Low bargaining power of suppliers
– Suppliers of Cavco in the Capital Goods sector have low bargaining power. Cavco has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cavco to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Cavco 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 Cavco is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cavco emphasize – knowledge, initiative, and innovation.
Digital Transformation in Mobile Homes & RVs industry
- digital transformation varies from industry to industry. For Cavco digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cavco 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.
Strong track record of project management in the Mobile Homes & RVs industry
– Cavco is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Mobile Homes & RVs industry
– Cavco has clearly differentiated products in the market place. This has enabled Cavco to fetch slight price premium compare to the competitors in the Mobile Homes & RVs industry. The sustainable margins have also helped Cavco to invest into research and development (R&D) and innovation.
Innovation driven organization
– Cavco is one of the most innovative firm in Mobile Homes & RVs sector.
Training and development
– Cavco has one of the best training and development program in Capital Goods industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Cavco 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 Mobile Homes & RVs industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Cavco
– The covid-19 pandemic has put organizational resilience at the centre of everthing Cavco does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Cavco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cavco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Cavco 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 Mobile Homes & RVs
– Cavco is one of the leading players in the Mobile Homes & RVs industry in United States. Over the years it has not only transformed the business landscape in the Mobile Homes & RVs industry in United States but also across the existing markets. The ability to lead change has enabled Cavco in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Cavco | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cavco are -
Employees’ less understanding of Cavco strategy
– From the outside it seems that the employees of Cavco 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.
No frontier risks strategy
– From the 10K / annual statement of Cavco, it seems that company is thinking out the frontier risks that can impact Mobile Homes & RVs industry. 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 Cavco is one of the leading players in the Mobile Homes & RVs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Mobile Homes & RVs industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Mobile Homes & RVs industry, Cavco needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners in Mobile Homes & RVs industry
– because of the regulatory requirements in United States, Cavco 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 Mobile Homes & RVs industry.
Slow decision making process
– As mentioned earlier in the report, Cavco has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Mobile Homes & RVs industry over the last five years. Cavco 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.
Capital Spending Reduction
– Even during the low interest decade, Cavco 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 Mobile Homes & RVs industry using digital technology.
Lack of clear differentiation of Cavco products
– To increase the profitability and margins on the products, Cavco needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Cavco is just above the Mobile Homes & RVs industry average. It 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.
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 Cavco supply chain. Even after few cautionary changes, Cavco is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cavco vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Cavco is dominated by functional specialists. It is not different from other players in the Mobile Homes & RVs industry, but Cavco needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cavco to focus more on services in the Mobile Homes & RVs industry rather than just following the product oriented approach.
Cavco Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cavco are -
Buying journey improvements
– Cavco can improve the customer journey of consumers in the Mobile Homes & RVs industry by using analytics and artificial intelligence. It 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Mobile Homes & RVs industry, but it has also influenced the consumer preferences. Cavco can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Cavco 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.
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. Cavco can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cavco 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 Cavco to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Cavco can develop new processes and procedures in Mobile Homes & RVs 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.
Using analytics as competitive advantage
– Cavco has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Mobile Homes & RVs sector. This continuous investment in analytics has enabled Cavco to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cavco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cavco can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Cavco can use the latest technology developments to improve its manufacturing and designing process in Mobile Homes & RVs sector. 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 Cavco to increase its market reach. Cavco 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
– Cavco 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.
Creating value in data economy
– The success of analytics program of Cavco has opened avenues for new revenue streams for the organization in Mobile Homes & RVs industry. This can help Cavco to build a more holistic ecosystem for Cavco products in the Mobile Homes & RVs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cavco in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Mobile Homes & RVs industry, and it will provide faster access to the consumers.
Threats Cavco External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cavco are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cavco in Mobile Homes & RVs industry. The Mobile Homes & RVs 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. Cavco needs to understand the core reasons impacting the Mobile Homes & RVs industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Mobile Homes & RVs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cavco can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Mobile Homes & RVs industry are lowering. It can presents Cavco with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Mobile Homes & RVs sector.
Stagnating economy with rate increase
– Cavco 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 Mobile Homes & RVs industry.
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.
Regulatory challenges
– Cavco 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 Mobile Homes & RVs industry regulations.
Increasing wage structure of Cavco
– 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 Cavco.
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. Cavco 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.
Consumer confidence and its impact on Cavco 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 Mobile Homes & RVs industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Cavco has witnessed rapid integration of technology during Covid-19 in the Mobile Homes & RVs industry. As one of the leading players in the industry, Cavco needs to keep up with the evolution of technology in the Mobile Homes & RVs 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.
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 Cavco business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Cavco Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cavco 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 Cavco 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 Cavco 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 Cavco 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 Cavco needs to make to build a sustainable competitive advantage.
