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SNHU - MBA-560 - Marketing and Strategy
Written by: Chris Bell - July, 2017

SWOT - Strengths, Weaknesses, Opportunities and Threats

Abstract

WesBell Electronics sets itself aside from the competition by accepting service orders beyond distribution, and purchasing tooling and equipment along the way. Their core competition is distribution so they aren't yet considered to be in competition with contract manufactures, but recently launched a new website that offers products and services in which the competition, in both areas, will soon take notice.

SWOT - Strengths, Weaknesses, Opportunities and Threats

Strengths

Four strengths of WesBell include buying products direct from manufacturers, offering services as a one-stop-shop, positive net income and cash flow since existence and the first to market on a website that offers services for sale. If a distribution competitor decided to add services to their business model then they would need to make an initial investment in equipment and supplies, but more importantly, an investment of time into training employees and seeking out dedicated long term staff. The intangible portion of WesBell would stop the competition from wiping them out with a simple investment because of strong teamwork within their staff and long term knowledge of the industry and market fluctuations.

Offering services came naturally to WesBell and since they never liked to turn down business they began accepting more orders that needed to be cut, stripped, tinned, soldered and assembled. WesBell grew from $0 to $9 million in sales over 29 years and stayed positive in cash and net income which proves the owner new how to reinvest money into the company in order to grow. The new website is the most recent investment into marketing and branding but the results are yet to show up in the data since the website is less than a year old. There were numerous websites very similar to WesBell's old website full of products for sale. Since their customers continued to ask for services after placing orders, it seemed natural for WesBell to answer those questions directly.


Weaknesses

WesBell's weaknesses are nearby with smaller available capitol and smaller overall capabilities. They also struggle with growing pains and lack of corporate knowledge. WesBell family owned success story but hardly competes with those that are 10x the size, so direct competition becomes difficult at times. It entirely possible that WesBell would be offered a job that their capacity couldn't handle, which means they would need to invest in more space and staff or turn down the order. That also assumes that WesBell could afford the upfront costs of producing such orders. These types of growing pains affect WesBell's marketing strategy because they want to attract electricians, repair shops, manufacturers or repair companies of equipment such as generators or electronic devices. Nonetheless, WesBell continues to win new business from customers and grows to $9 million in revenue, which gives them a forth problem of knowledge of unknown territory. When do they expand their facility or hire more staff? When do they update their computer system or their website?

SWOT Analysis Contract Manufacturing

Opportunities

WesBell has opportunities everywhere and needs to choose from the lot in order to continuously improve as fast as they can. WesBell could upgrade to a barcoded inventory system, create more cost savings programs, discuss growth opportunities and look into purchasing a building rather than extending their lease. Spools of wire are manufactured by equipment and placed on a large spool which means the tag of (1,000') will be slightly different than that. Each spool is cut multiple times before finishing it so keeping track of each length has been problematic. Many of WesBell's customers demand quick delivery forcing them to buy from more expensive vendors to support customer needs. Perhaps an investment in more inventory would save money over time. Their new website was an opportunity that was discussed and executed. The repetition of the meetings and planning would prove to be a great way to work on opportunities in the future. They are currently packed into 10,000 square feet and need more room to conduct more business. It's a perfect time to invest in a building rather than continuing a lease.

Threats

While WesBell can keep running their race there are multiple threats that could compromise their revenue and profits. Perhaps WesBell is introducing the new way for distributors to operate, by adding services to their line of products. Some of the bigger competitors could easily buy the same equipment and supplies to produce the same products, and if WesBell isn't continuously improving, they could risk seeing their competition catch up to their intangible assets. Another threat to the organization is that the original owner is going to be leaving soon. He's already 67 years old and only has a few years to leave his company to his three sons. If it's handled the right way it could be an opportunity for improvement as well, because the owner will leave behind a salary that can then be used to pay down debt and invest in a bigger building. The services business is another threat to WesBell because it may not work out as planned. If they continue to push, quote and lose opportunities then they risk shutting down that portion of the company, selling the equipment and laying off employees.

Opportunities & Consumer Trends

Emerging consumer trends such as quality, speed and efficiency impact branding and success for WesBell's products and services and they therefore use a motto of continuous improvement. WesBell has always added new services to complement their products because customers directly ask for cut wire and completed wire harnesses. Loyalty will forever be a relevant trend in consumer behavior, and since quality, speed and efficiency are expected it's important to take strides in the direction of trust and loyalty. Businesses have failed after the previous owner left, who happened to be best friends with their biggest customer. Trump is pushing for companies to bring manufacturing back to the USA, and while some will resist others are bound to create a stir in the market. WesBell is excited for the increase in available services coming back to America, and they're continuously improving by building a website with services incorporated and creating a new marketing campaign to let more than their current customers about their service's business.

SWOT VS Pest Analysis Contract Manufacturing

Most of WesBell's marketing is done online through online retailers, search engine optimization, local websites, review websites and informational online posts. Consumers like see an online presence of a company and possibly reviews before calling. In fact, a strong online presence sets a company aside by the thought of it costing a lot of money and on the opposite side, how no online presence is a big mistake in most industries today. There aren't any websites that offer services online on the distribution or manufacturing sites. "Please call here" is the best competitive website's first impression, so WesBell is clearly the first-to-market for this idea. In a time when Amazon, Apple, Google, Facebook and Tesla each rule in a global popularity contest through new technology, it seems inevitable that current consumer trends will soon lead OEM companies to WesBell. "Employees from both tech companies [Google and Facebook] are pretty stoked to be there, but Facebook has the edge over Google with a satisfaction rating of 93% compared to Google's rating of 84%, according to employees who completed PayScale's survey. (Gillet, 2015)" Having a group of dedicated employees that believe in a company's ethics and morals will drive more people to apply for job. It would be difficult for an unethical and immoral company to hire experienced and educated staff so it's important to be desirable as an employer, especially when the company is in the public eye.

Opportunities & Ethics

Opportunities for certain ethics violations would involve understanding the difference between buying efficient equipment as an improvement versus buying equipment to downsize staff. Another opportunity related to branding success is creating a safe, lean and ecofriendly working environment around the machines, warehouse fork trucks and oversized inventory. Warehouse related job descriptions can involve handling fuel for the equipment and other chemicals that require a mask, and WesBell will gain visibility by doing everything safe, legal and ethical. A study was conducted for office workers to figure out if their environment affected their happiness, and they result was affirmative. "A satisfied and motivated staff is a necessary element of good healthcare delivery, and healthcare executives should regularly examine the factors that influence clinicians' perceptions of quality and satisfaction to understand and plan for necessary changes. (Sadatsafavi, Walewski & Shepley, 2015)" The study goes on to discuss the temperature of work areas, patient areas and overall satisfaction of employees in relation to temperature and even lighting. This seems minimal compared to the warehouse employees at WesBell that have more opportunity to be unhappy.

As WesBell increases sales in services they begin to create an ethical problem with the current contract manufacturer customers, as WesBell will soon end up competing with them for an end user's business. Copper drawing plant >>Wire manufacturer>>Distributor>>Contact Manufacturer>>End user>> ends up connecting wires to devices in all sorts of ways which means WesBell is trying to vertically (downwardly) integrate and risks losing some distribution customers in the process. However, this presents the opportunity for WesBell because their service's business provides higher profit margins, room for improvement on costs and long term customers that continue to make devices for years. They are also much more repetitive which makes it easy to implement efficiency improvements which improves the bottom line. It's also worth mentioning that hiring within as they grow is another way to create a positive ethics presence in the market. "We propose a system life cycle approach with special consideration of the ‘human in the loop' and we argue that it will be worthwhile to describe human capabilities, features and actions in a similar way as is done with the capabilities, features and actions of the technical components of a complex technical system. (Steusloff, 2016)"

It can prove to be a return on investment to buy a piece of equipment and trade it for a few employees, and for bigger companies it could be 10 pieces of equipment and hundreds of employee layoffs. It would be highly unethical to announce a company layoff because of the purchase of a few machines. However, the business plan could account for the transition of those employees into new roles or providing educational reimbursement programs so that manual labor employees could become equipment servicers or eventually technology engineers. For every job lost there's a job gained, and the business plan should account for helping the employees move forward in the company, not behind.

Affect

Ethics and consumer trends affect marketing and branding because all employees, customers and vendors should be treated fairly and with respect, in business and in life. The business plan incorporates 5% of revenue to support marketing efforts, sometimes more as technology is becoming a bigger part of most budgets with numerous IT related costs and online platforms to join and maintain. Treating your own employees with respect and praise can quickly affect public image as proven by the glamorous work environments of the biggest tech firms. These ethics battles can push a company to ignore marketing and growth only to focus on lowering costs and downsizing. Recycling the profits back into the company allows WesBell to keep up with technology as a continuous improvement initiative. Their online presence can have a wow-factor that the industry hasn't yet seen.

Core Competencies

First Core Competency

WesBell's first core competency begins with their ability to purchase direct from manufacturers when contract assembly companies are forced to buy through distribution. A study was done to show how vertical integration helps solve problems in modular production systems and manufacturing plants, "Modular production systems with high flexibility, capable of interacting with products and humans, and vertically integrated with the business environment provide new possibilities for overcoming these challenges. (Wrede, Beyer, Dreyer, Wojtynek, & Steil, 2016)" WesBell has been in business since 1988 as a distributor of wire and cable products. They accepted a few service orders from current customers along the way, but mostly sold bulk wire to contract manufacturers and end users. In the recent years WesBell has grown their production line because customers continue to ask for additional services. WesBell has maintained their positive relationships with wire and cable manufacturers and receive bulk distribution pricing. Their wire is purchased direct and components through distribution as compared with contract manufacturers that buy both wire and components from distribution.

Core Competencies in Contract Manufacturing

Second Core Competency

Secondly, they have the ability to win business from products and services which is different from distributors and contract manufacturers, and that also makes WesBell a one-stop-shop. WesBell found a spot in the market that allowed them to be valuable to customers and offer something that the competition hasn't been doing. Some end users have been buying wire for years and completing the wire harnesses manually. When they decide to outsource those services, WesBell could lose the bulk wire business if they weren't able to adjust to the customer's needs. As a one-stop-shop, these end users can continue down the path of outsourcing without finding a new vendor to build a relationship with. Ultimately, WesBell has created a way to say yes to customers more often than their competitors, whether distribution or contract manufacturing.

Third Core Competency

Another core competency in relation to WesBell's size in the market is relationships with vendors that continue to increase their yearly minimums as the economy picks up. In a poor economy vendors want to pick up new customers but strong economies allow them to have big signup inventory purchases and annual minimums. As a distributor WesBell keeps mostly brand names in stock due to the demand for a quality tested product because wire harnesses are often tedious to replace in appliances and equipment. It's also not worth selling the cheaper brands to individuals on Ebay and Amazon because it's nice to just get quality without asking first. A head gasket in a vehicle is a $3 rubber layer between the top and bottom of an engine, but a $1500 job to replace when it gets damaged. Likewise, many wire harnesses can take hours of labor to replace depending on the equipment it's installed in. Building a quality wire harness can save thousands of dollars in labor later on when things start to fail.

Forth Core Competency

A final core competency of WesBell is the founder and still CEO who ran the company for 29 years without a single negative year. He joined the Marines for a few years after high school, got an accounting degree and started a company a few years later. He's 67 years old and has a wealth of knowledge about the growth and struggles of every company in the industry, relationships with customers, employees and vendors. His history in the business, his product knowledge and his memory of industry/competitive issues are the leading reasons of how he makes major decisions that others may not quite understand. The owner has provided a safe and trustworthy workplace for its employees for 29 years and created a sustainable business plan that will outlast his time there. He's been transferring his accounts and relationships to others within the company and hiring qualified employees to handle his daily tasks in order to make sure there isn't a big disruption when he leaves.

WesBell's four core competencies are those in which the competition will have a hard time repeating in order to compete head-to-head. Without the current owner and all of the core competencies WesBell runs the risk of no longer being unique in a market where being unique is hard to find. They are working hard at emphasizing on strengths and opportunities while also working on solutions to threats and weaknesses. However, most of the customer service, vendors, products, accounting, production department and equipment are all able to be repeated by competition. WesBell is repeating the standard way of building assemblies and harnesses but with the added knowledge of the previous 29 years, relationships, processes, systems, websites and online programs such as Ebay, Amazon and review websites. WesBell has the sustainability aspect that allows them to continue to compete in a competitive market where machines and equipment seem to takeover numerous jobs.


References:

Gillett, R. (2015, April). 8 reasons why working at Facebook is better than working at Google. Retrieved from:
http://www.businessinsider.com/why-its-better-to-work-at-facebook-than-google-2015-4

Humans Are Back in the Loop! Would Production Process Related Ethics Support the Design, Operating, and Standardization of Safe, Secure, and Efficient Human-Machine Collaboration?. (2016). 2016 IEEE 4th International Conference on Future Internet of Things and Cloud Workshops (FiCloudW), Future Internet of Things and Cloud Workshops (FiCloudW), IEEE International Conference on, ficloudw, 348. doi:10.1109/W-FiCloud.2016.76

Sadatsafavi, H., Walewski, J., & Shepley, M. M. (2015). Factors influencing evaluation of patient areas, work spaces, and staff areas by healthcare professionals. Indoor & Built Environment, 24(4), 439-456. doi:10.1177/1420326X13514868

Wrede, S., Beyer, O., Dreyer, C., Wojtynek, M., & Steil, J. (2016). Vertical Integration and Service Orchestration for Modular Production Systems Using Business Process Models. Procedia Technology, 26(3rd International Conference on System-Integrated Intelligence: New Challenges for Product and Production Engineering), 259-266. doi:10.1016/j.protcy.2016.08.035