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Winnebago Industries: SWOT Analysis Essay

Winnebago Industries, located in Forest City, Iowa has recently experienced what could be considered its most challenging decade since founded in 1958, by business man John Hanson. Synonymous with the term motor home, Winnebago has made traveling with the comforts of home popular with the American adventurer for over half a century. Steady growth into the 21st century has allowed Winnebago to gain a strong financial footing and become the leading motor home, or recreational vehicle (RV) manufacturer in the industry.

As will be shown in this report Winnebago sales have been directly affected by fluctuating interest rates, rising fuel costs, and a recent economic recession which has been dubbed the worst since the Great Depression. Through a brief background discussion of the firms’ current internal strengths and weaknesses, along with its external opportunities and threats (SWOT), followed by a detailed SWOT matrix this report will recommend specific strategic actions for the firm to take over the next three years in preparation for future growth and maintenance as the leading motor home, or recreational vehicle (RV) supplier in the United States.

Internal strengths at Winnebago stem from its commitment to quality and product innovation via state of the art design and manufacturing systems (Winnebago Industries, n.d.), which as noted by Bland and Marcis, as cited in David (Case 10, 2009), have allowed the firm to gain a strong financial footing and pay off all debt from land, buildings, and equipment. Internal weaknesses at Winnebago, as noted by Business Wire (March 18, 2010) and Bland and Marcis, as cited in David (Case 10, 2009) are primarily due to the firms production facility location, lack of a vision, negative sales due to economic conditions, and the inherent target market as defined by historical demand. External opportunities available to Winnebago, as noted by Bland and Marcis, and cited in David (Case 10, 2009), are chiefly the result of market shift, an expanding target market, and the availability of low credit and inexpensive land resulting from a continuing economic recession.

External threats to Winnebago include the existing recessionary period and current oil crisis in the Gulf, and as noted by Bland and Marcis, and cited in David (Case 10, 2009), increasing fuel costs, existing competition, government regulation, and seasonal demand which drives sales. These strengths, weaknesses, opportunities, and threats are detailed in the following SWOT matrix, along with respective SO, WO, ST, and WT recommended strategies.

Table 1 developed from information provided by Bland and Marcis, as cited in David (Case 10, pp. 96-105, 2009), (Winnebago Industries, n.d.), and (Business Wire, March 18, 2010).

As seen from the above SWOT matrix, Winnebago management has many strategic alternatives from which to choose. SWOT analysis provides only a snapshot of current strengths, weaknesses, opportunities, and threats. Therefore, to preclude overemphasizing any single issue Winnebago management needs to review expected changes in current conditions both internal and external to the firm prior to deciding which strategies to pursue, but for the purpose of this report the following three year strategic plan is recommended.

Three Year Strategic Plan

Year 1 – Winnebago should begin to prepare for growth in demand by expanding beyond its current 280 U.S. and Canadian dealerships following some combination of the above WO1, WO2, WT2, and SO1strategies, while maintaining and measuring production capacity to demand (Winnebago Industries, n.d.).

Year 2 – Winnebago should reduce delivery costs, realize changes in consumer preferences, and market an expanding demographic by pursuing some combination of the above SO2, SO3, ST1, ST2, and ST3 strategies.

Year 3 – Winnebago should begin to capitalize on producing more cost efficient, class A models to support growing demand and to fill a void in seasonal demand by pursuing the above WO3 and WT1 strategies.

Winnebago has remained a leading manufacturer of motor homes since its inception and has remained engaged by realigning its operations to suit changes in both its external environment and market demands. The 21st century has brought with it many more challenges which must be faced head on and with an unwavering tenacity which continues to define the Winnebago brand. The preceding strategies are by no means a silver bullet, but instead will help Winnebago take advantage of its current strengths and opportunities to improve its weaknesses, while effectively dealing with relevant external threats.

References

Business Wire. March 18, 2010. Winnebago Industries reports improved results for second quarter fiscal 2010. Retrieved from

http://www.marketwatch.com/story/winnebago-industries-reports-improved-results-for-second-quarter-fiscal-2010-2010-03-18

David, F.R. (2009). BUS 490: Strategic management concepts and cases: 2009 custom edition (12th ed.). Upper Saddle River, NJ: Prentice Hall/Pearson. Winnebago Industries. (n.d.). Retrieved from

http://www.winnebagoind.com/company/about-us/profile.php


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