Conduct a SWOT analysis for the new Hal’s Woodworking online business. You can use
the information in the case narrative, your personal knowledge of the retail hardware and
tool industry, and information you obtain by following the Web Links or doing independent
searches of the Web as you conduct your analysis. You should create a diagram similar
to Figure 1-12 to summarize your SWOT analysis results.
2. Based on your SWOT analysis, write a report of about 400 words that includes a summary of your assumptions and a list of recommendations for Hal’s Woodworking. The
recommendations should be specific and should address the content that the Web site
should include, the features that Hal should make available on the site, and how Hal’s
Woodworking might overcome any of the weaknesses or threats you identified in the
C2. Hal’s Woodworking
Hal Donovan started an ordinary hardware store, named Hal’s Hardware in Sandusky, Ohio, in
1978. He had been working during his summer vacations from college for a long-established
hardware store and decided he liked the business. Hal’s Hardware developed an excellent reputation as a friendly neighborhood store. The store managers are all active in the community
and the store regularly sponsors youth sports teams and supports local charities. When hired,
salespeople go through a comprehensive training program that includes skill training in the
areas of the store in which they will work (plumbing, electrical, power tools, flooring, garden, and
so on), and they are trained in customer service skills. As a result of this focus on service, Hal’s
Hardware became a community gathering place.
Hal offers classes and workshops for the homeowner and hobbyist three evenings each
month and regularly schedules seminars for professional customers on weekday mornings.
Many of these workshops and seminars are underwritten and taught by manufacturers to promote their products, but an increasing number are being created by Hal’s Hardware staff
In recent years, Hal has become more and more worried that the business is no longer
growing. The store is facing increasing competition from hardware chains such as Home Depot
and Lowe’s. These national chains have opened many new stores, and they are larger, carry
more items, and offer lower prices on some items. The competition is fierce; for example, Hal’s
Hardware closed its lumber department because of this competition. The national chains buy
lumber in such large quantities that they can offer far lower prices. Hal was unable to earn a
profit when matching the large competitors’prices, and the lumber operations consumed a large
amount of store space.
Hal was worried that this sort of problem could develop in other departments, so he began
looking for ways to add value to the customer experience, especially in ways that the national
chains were not willing or able to do. For example, Hal believes that most people want to try
out a new power tool in person before they spend hundreds of dollars on a purchase. Thus,
Hal’s Hardware created a tool demonstration area staffed with salespeople who are experts in
power tool operation. For each major type of power tool (drills, power saws, joiners, grinding
tools, and so on), Hal created a small booklet of hints for using that type of tool. Hal’s salespeople give these booklets to customers as free handouts. They also sell Hal’s own low-cost
Hal’s Hardware currently has a Web site that includes information about the company and
some store information, such as directions to the store and hours of operation. Hal is thinking
about expanding the Web site to include online shopping. He is hoping that customers might
find the Web site to be a useful way to order items, see whether items are in stock at the store,
and comparison shop among different brands of a particular item. Hal is also hopeful that the
Web site can reach customers who are not located near the store.
Hal has been talking with Sarah Johnson, his most senior store manager, about his idea for
adding online sales to the Web site. Sarah has been with the company for 20 years and has
organized a number of the classes held on Saturday afternoons in the tool demonstration area.
After hearing Hal’s ideas, she explains that she is concerned about online competition as much
as local competition. Some of the tool manufacturing companies that supply Hal’s Hardware are
talking about selling directly to customers on their Web sites. None of the major suppliers has
done this yet, but Sarah is worried that it could occur in the future. The store also faces competition from companies that sell online or through the Amazon.com Web site.
Sarah tells Hal that she’s concerned that going online with their entire product line might
not make any sense because the competition for common tools is likely to be just as fierce
online as it is in the store now. She has noticed that there seems to be a solid core of customers who are interested in serious woodworking and who show up for a lot of the classes.
These customers buy some of the best, and most expensive, tools that the store sells. Many
times, she finds that she has to special order tools for these customers when they are working
on a specific project.
Sarah suggests to Hal that they might want to take the business in a different direction
online and sell just the high-end specialty tools to dedicated woodworkers and cabinetmakers.
These items yield higher margins than the regular tools. Furthermore, the salespeople who Hal
has hired are eager to develop videos and instruction booklets that would appeal to this more
skilled and specialized audience. Sarah suggests that they call the new online business Hal’s
Woodworking to distinguish it from the general hardware store business.