Cineplex Entertainment: The Loyalty Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cineplex Entertainment: The Loyalty Program
In 2007, the marketing director for Cineplex Entertainment is trying to decide whether or not to proceed with a loyalty program that would provide incentives for customers to see more movies and events, and spend more on concessions. An important by-product would be the collection of detailed customer buying data. She has crafted four possible combinations of rewards and received proposals from three suppliers with experience in managing customer data banks. She must decide the structure and richness of the program, the supplier, the likely response rate to determine financial feasibility, and whether to launch regionally or nationally.
Swot Analysis of "Cineplex Entertainment: The Loyalty Program" written by Kenneth G. Hardy, Renee Zatzman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cineplex Loyalty facing as an external strategic factors. Some of the topics covered in Cineplex Entertainment: The Loyalty Program case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cineplex Entertainment: The Loyalty Program casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing transportation and logistics costs,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Cineplex Entertainment: The Loyalty Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cineplex Entertainment: The Loyalty Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cineplex Loyalty, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cineplex Loyalty 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 Cineplex Entertainment: The Loyalty Program can be done for the following purposes –
1. Strategic planning using facts provided in Cineplex Entertainment: The Loyalty Program case study
2. Improving business portfolio management of Cineplex Loyalty
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 Cineplex Loyalty
Strengths Cineplex Entertainment: The Loyalty Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cineplex Loyalty in Cineplex Entertainment: The Loyalty Program Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Cineplex Entertainment: The Loyalty Program firm has clearly differentiated products in the market place. This has enabled Cineplex Loyalty to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cineplex Loyalty to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Cineplex Loyalty 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 Cineplex Entertainment: The Loyalty Program - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cineplex Loyalty has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cineplex Loyalty to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Cineplex Loyalty 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.
Ability to lead change in Sales & Marketing field
– Cineplex Loyalty 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 Cineplex Loyalty in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Cineplex Loyalty is one of the most innovative firm in sector. Manager in Cineplex Entertainment: The Loyalty Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Cineplex Loyalty is present in almost all the verticals within the industry. This has provided firm in Cineplex Entertainment: The Loyalty Program 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.
Low bargaining power of suppliers
– Suppliers of Cineplex Loyalty in the sector have low bargaining power. Cineplex Entertainment: The Loyalty Program has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cineplex Loyalty to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Cineplex Loyalty 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 Cineplex Loyalty is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cineplex Entertainment: The Loyalty Program Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Cineplex Loyalty is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Cineplex Loyalty is one of the leading recruiters in the industry. Managers in the Cineplex Entertainment: The Loyalty Program are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Cineplex Loyalty has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Cineplex Entertainment: The Loyalty Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cineplex Entertainment: The Loyalty Program are -
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 Cineplex Loyalty supply chain. Even after few cautionary changes mentioned in the HBR case study - Cineplex Entertainment: The Loyalty Program, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cineplex Loyalty vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cineplex Entertainment: The Loyalty Program, it seems that the employees of Cineplex Loyalty 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.
Slow to strategic competitive environment developments
– As Cineplex Entertainment: The Loyalty Program HBR case study mentions - Cineplex Loyalty takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Cineplex Entertainment: The Loyalty Program that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Cineplex Entertainment: The Loyalty Program can leverage the sales team experience to cultivate customer relationships as Cineplex Loyalty is planning to shift buying processes online.
Products dominated business model
– Even though Cineplex Loyalty has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Cineplex Entertainment: The Loyalty Program should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Cineplex Loyalty needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Need for greater diversity
– Cineplex Loyalty 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 operating costs
– Compare to the competitors, firm in the HBR case study Cineplex Entertainment: The Loyalty Program 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 Cineplex Loyalty 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth G. Hardy, Renee Zatzman suggests that, Cineplex Loyalty 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.
Lack of clear differentiation of Cineplex Loyalty products
– To increase the profitability and margins on the products, Cineplex Loyalty needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Cineplex Loyalty has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Cineplex Entertainment: The Loyalty Program | 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 Cineplex Entertainment: The Loyalty Program are -
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. Cineplex Loyalty 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. Cineplex Loyalty 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cineplex Loyalty 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 Cineplex Loyalty to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Cineplex Loyalty 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.
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. Cineplex Loyalty can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Cineplex Loyalty can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cineplex Entertainment: The Loyalty Program suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cineplex Loyalty is facing challenges because of the dominance of functional experts in the organization. Cineplex Entertainment: The Loyalty Program 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cineplex Loyalty can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Cineplex Loyalty can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Manufacturing automation
– Cineplex Loyalty can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Cineplex Loyalty 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.
Learning at scale
– Online learning technologies has now opened space for Cineplex Loyalty to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Cineplex Loyalty has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Cineplex Entertainment: The Loyalty Program - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cineplex Loyalty to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cineplex Loyalty can use these opportunities to build new business models that can help the communities that Cineplex Loyalty operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Cineplex Entertainment: The Loyalty Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cineplex Entertainment: The Loyalty Program are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Cineplex Loyalty 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. Cineplex Loyalty can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Increasing wage structure of Cineplex Loyalty
– 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 Cineplex Loyalty.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cineplex Loyalty 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.
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.
Stagnating economy with rate increase
– Cineplex Loyalty 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.
High dependence on third party suppliers
– Cineplex Loyalty 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cineplex Loyalty.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cineplex Loyalty can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Cineplex Entertainment: The Loyalty Program .
Consumer confidence and its impact on Cineplex Loyalty 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 Cineplex Loyalty is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cineplex Entertainment: The Loyalty Program, Cineplex Loyalty may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Regulatory challenges
– Cineplex Loyalty needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Weighted SWOT Analysis of Cineplex Entertainment: The Loyalty Program 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 Cineplex Entertainment: The Loyalty Program 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 Cineplex Entertainment: The Loyalty Program 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 Cineplex Entertainment: The Loyalty Program 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 Cineplex Entertainment: The Loyalty Program 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 Cineplex Loyalty needs to make to build a sustainable competitive advantage.
