MRC's House of Cards SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of MRC's House of Cards
In March 2011, Asif Satchu and Modi Wiczyk, co-chairmen and co-chief executive officers at independent production company Media Rights Capital (MRC), are debating whether to accept a licensing offer from Netflix for their most ambitious project to date, a new television series called House of Cards. MRC executives had begun to pitch the series to each of the major premium cable networks in the US, including AMC, FX, HBO, Showtime, and Starz. To the surprise of the two entrepreneurs, Netflix executives had made it known they were prepared to make a bold step into the world of original programming. As thrilled as Satchu and Wiczyk were about Netflix's offer, accepting it-and thus forgoing a sought-after one-season offer from a traditional premium cable network-raised major concerns, for instance about MRC's ability to secure international rights fees, to obtain sufficient marketing support, to gain the necessary credibility in the marketplace, and to satisfy artists and other key constituents. Was Netflix the right partner for MRC?
Swot Analysis of "MRC's House of Cards" written by Anita Elberse includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mrc Netflix facing as an external strategic factors. Some of the topics covered in MRC's House of Cards case study are - Strategic Management Strategies, Marketing, Sales, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the MRC's House of Cards casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of MRC's House of Cards
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in MRC's House of Cards case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mrc Netflix, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mrc Netflix operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of MRC's House of Cards can be done for the following purposes –
1. Strategic planning using facts provided in MRC's House of Cards case study
2. Improving business portfolio management of Mrc Netflix
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mrc Netflix
Strengths MRC's House of Cards | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mrc Netflix in MRC's House of Cards Harvard Business Review case study are -
Successful track record of launching new products
– Mrc Netflix has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mrc Netflix has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Mrc Netflix has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study MRC's House of Cards - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– MRC's House of Cards firm has clearly differentiated products in the market place. This has enabled Mrc Netflix to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Mrc Netflix to invest into research and development (R&D) and innovation.
High brand equity
– Mrc Netflix has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mrc Netflix to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Mrc Netflix is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Anita Elberse can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Mrc Netflix is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Mrc Netflix is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in MRC's House of Cards Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Mrc Netflix in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Mrc Netflix
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mrc Netflix does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Sales & Marketing field
– Mrc Netflix is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mrc Netflix in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Mrc Netflix in the sector have low bargaining power. MRC's House of Cards has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mrc Netflix to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Mrc Netflix are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Mrc Netflix is present in almost all the verticals within the industry. This has provided firm in MRC's House of Cards case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses MRC's House of Cards | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MRC's House of Cards are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the MRC's House of Cards HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mrc Netflix has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Anita Elberse suggests that, Mrc Netflix is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study MRC's House of Cards, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Mrc Netflix has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mrc Netflix even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Mrc Netflix products
– To increase the profitability and margins on the products, Mrc Netflix needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Mrc Netflix supply chain. Even after few cautionary changes mentioned in the HBR case study - MRC's House of Cards, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mrc Netflix vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study MRC's House of Cards has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mrc Netflix 's lucrative customers.
Need for greater diversity
– Mrc Netflix has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Mrc Netflix has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Mrc Netflix, firm in the HBR case study MRC's House of Cards needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study MRC's House of Cards, it seems that the employees of Mrc Netflix don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities MRC's House of Cards | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study MRC's House of Cards are -
Developing new processes and practices
– Mrc Netflix can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mrc Netflix can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Mrc Netflix has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mrc Netflix to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Mrc Netflix to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Mrc Netflix can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mrc Netflix to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mrc Netflix can use these opportunities to build new business models that can help the communities that Mrc Netflix operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mrc Netflix in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mrc Netflix is facing challenges because of the dominance of functional experts in the organization. MRC's House of Cards case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Mrc Netflix can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Mrc Netflix to increase its market reach. Mrc Netflix will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mrc Netflix can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mrc Netflix can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mrc Netflix can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats MRC's House of Cards External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study MRC's House of Cards are -
Consumer confidence and its impact on Mrc Netflix demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Mrc Netflix is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Mrc Netflix has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Mrc Netflix needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Mrc Netflix needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mrc Netflix can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
High dependence on third party suppliers
– Mrc Netflix high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mrc Netflix business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mrc Netflix needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mrc Netflix can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Mrc Netflix
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mrc Netflix.
Stagnating economy with rate increase
– Mrc Netflix can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mrc Netflix in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mrc Netflix in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of MRC's House of Cards Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study MRC's House of Cards needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study MRC's House of Cards is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study MRC's House of Cards is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of MRC's House of Cards is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mrc Netflix needs to make to build a sustainable competitive advantage.