Solved: SWOT Analysis Required Develop a SWOT

analysis for Tartan Corpor

SWOT Analysis

Required
Develop a SWOT analysis for Tartan Corporation based on Problem 2-36. The analysis should
include two to three items in each category: strengths, weaknesses, opportunities, and threats.
In Problem 2-36, Tartan Corporation has been manufacturing high-quality home lighting
systems for more than 90 years. The company’s first products in the 1920s—the classic
line—were high-quality floor lamps and table lamps made of the highest-quality materials with
features that other manufacturers did not attempt: multiple switches, adjustable heights, and
stained glass. In the 1950s and 1960s, the company introduced a number of new products that
were in demand at the time, including track lighting and lava lamps, which became the
company’s Modern line. In keeping with its brand image, Tartan ensured that these new
products also met the highest standards of quality in the industry. A new customer style
emerged in the 1960s and 1970s, which resulted in another new line of products,
Contemporary. It was followed in more recent years by two new product lines, Margaret Stewart
and Western.
Jess Jones, the company’s chief financial officer, had become concerned about the
performance of some of the product lines in recent years. Although total sales were growing at
an acceptable rate, approximately 10 percent per year, the sales mix was changing significantly,
as shown in the following product line sales report. Jess was particularly concerned about the
Classic line because of its sharp drop in sales and its high costs. Because of the high level of
craftsmanship required for the Classic line, it always had higher than average costs for labor
and materials. Furthermore, attracting and retaining the highly skilled workers necessary for this
product line were becoming more and more difficult. The workers in the Classic line in 2010
were likely to be older and very loyal employees who were paid well because of their skill and
seniority. These workers displayed the highest level of workmanship in the company and, some
would argue, in the entire industry. Few newer employees seemed eager to learn the skills
required in this product line.
Moreover, manufacturing capacity was experiencing an increasing strain. The sharper than
expected increase in sales for the Western styles had created a backlog of orders for them, and
plant managers had been scrambling to find the plant capacity to meet the demand. Some plant
supervisors suggested shutting down the Classic line to make capacity for the Western line.
Some managers of the Margaret Stewart line argued the same thing. However, eliminating the
Classic line would make obsolete about $233,000 worth of raw materials inventory that is used
only in the manufacture of Classic line products.
Tom Richter, the firm’s sales manager, acknowledged that sales of the Classic line were more
and more difficult to find and that demand for the new styles was increasing. He also noted that
the sales of these products reflected significant regional differences. The Western line was
popular in the south and west, and the Contemporary, Modern, and Stewart styles were popular
nationally. The Classic line tended to have strong support only in the northeast states. In some
sales districts in these states, Classic sales represent a relatively high proportion of total sales.

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 Kelly Arnold, the firm’s CEO, is aware of these concerns and has decided to set up a task force
to consider the firm’s options and strategy in regard to these problems.

Required
Describe Tartan’s competitive strategy. On the basis of this competitive strategy, what
recommendation would you make to the taskforce?

ANSWER
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