Strategic Planning and Perspectives in Decision Making

Solution Preview

Please see response attached, which is also presented below. I hope this adds to your other response. Good luck with your final copy and take care.

RESPONSE:

(1) How would you address each company's weakness? If you were Makatume, what would you do about higher voltages?

(a) First take the perspective of S&W's Director of Strategic Planning and discuss S&W's weaknesses and what you would do about them.

Smith & White markets a full line of moderate quality professional and consumer tools. It also markets such products as lawn and garden, hobby tools, and kitchen appliances, all under the same brand name as its power tools. S&W does have some significant weaknesses. These include high costs due to old manufacturing plants located in high labor cost urban areas, market confusion between its professional and consumer tools, and negative feelings on the part of its distributors stemming from a perceived abuse of their dominant market position. It also doesn't have much of a presence in the fast growing cordless segment. In addition, a major hidden weakness is S&W's huge size, which makes it unwieldy in reacting to market phenomena during periods of rapid change.

However, some weaknesses are static (i.e., location and type of the building) and rather than focusing on these particular weaknesses, the Director will probably focus on ways to leverage the companies strengths and pursue opportunities that are good fit with the company (i.e., Are cordless units a good fit with the company? Should they increase the production of consumer tools in reaction to the external threat of the Chinese imports?)

As the S&W's Director of Strategic Planning, she would position her company by leveraging its strengths. Michael Porter has argued that a firm's strengths ultimately fall into two headings: cost advantage and differentiation. Thus, I would be considering what my company's competitive advantage is when I am considering my company weaknesses. In some cases a weaknesses is the opposite of the strength (i.e., huge size of S&W is both a strength and a weakness). Therefore, part of my strategic planning would be to employ a full SWOT analysis and corresponding Matrix to begin the process of determining the best strategy to address the company's weaknesses.

From the MATRX, I would probably look at the following:
W-O - ways to overcome weaknesses to ...