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 – there is increasing trade war between United States & China, increasing commodity prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, technology disruption,
wage bills are increasing, cloud computing is disrupting traditional business models, 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.
Ability to recruit top talent
– Cavco is one of the leading players in the Mobile Homes & RVs industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Effective Research and Development (R&D)
– Cavco has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cavco staying ahead in the Mobile Homes & RVs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Diverse revenue streams
– Cavco is present in almost all the verticals within the Mobile Homes & RVs industry. This has provided Cavco 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.
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.
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.
Operational resilience
– The operational resilience strategy of Cavco comprises – understanding the underlying the factors in the Mobile Homes & RVs 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
– Cavco is one of the most innovative firm in Mobile Homes & RVs sector.
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.
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.
Weaknesses of Cavco | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cavco are -
Skills based hiring in Mobile Homes & RVs industry
– The stress on hiring functional specialists at Cavco 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.
High operating costs
– Compare to the competitors, Cavco has high operating costs in the Mobile Homes & RVs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cavco lucrative customers.
Need for greater diversity
– Cavco has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Products dominated business model
– Even though Cavco has some of the most successful models in the Mobile Homes & RVs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cavco should strive to include more intangible value offerings along with its core products and services.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cavco is slow explore the new channels of communication. These new channels of communication can help Cavco to provide better information regarding Mobile Homes & RVs products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Cavco 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.
High dependence on Cavco ‘s star products
– The top 2 products and services of Cavco still accounts for major business revenue. This dependence on star products in Mobile Homes & RVs industry has resulted into insufficient focus on developing new products, even though Cavco has relatively successful track record of launching new products.
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.
Cavco Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cavco are -
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.
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.
Building a culture of innovation
– managers at Cavco 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 Mobile Homes & RVs industry.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Mobile Homes & RVs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cavco 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. Cavco 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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Cavco 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.
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 Cavco 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.
Threats Cavco External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cavco are -
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.
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.
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 Cavco.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Cavco may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Mobile Homes & RVs sector.
High dependence on third party suppliers
– Cavco 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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Cavco is facing in Mobile Homes & RVs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.