Can one of Hollywood's biggest flops magically turn into a Broadway hit? Xanadu, an adaptation of a 1980 Olivia Newton-John roller-disco film described by one critic as "the epic failure to end all epic failures," opened on Broadway in July 2007. Producer Rob Ahrens, the driving power behind the resurrection, anxiously awaited the verdict of audience members. Was the choice to produce Xanadu the Broadway musical the right choice?
Swot Analysis of "Xanadu on Broadway" written by Anita Elberse includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Broadway Xanadu facing as an external strategic factors. Some of the topics covered in Xanadu on Broadway case study are - Strategic Management Strategies, Marketing, Risk management, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Xanadu on Broadway casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing commodity prices,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Xanadu on Broadway
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Xanadu on Broadway case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Broadway Xanadu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Broadway Xanadu 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 Xanadu on Broadway can be done for the following purposes –
1. Strategic planning using facts provided in Xanadu on Broadway case study
2. Improving business portfolio management of Broadway Xanadu
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 Broadway Xanadu
Strengths Xanadu on Broadway | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Broadway Xanadu in Xanadu on Broadway Harvard Business Review case study are -
Innovation driven organization
– Broadway Xanadu is one of the most innovative firm in sector. Manager in Xanadu on Broadway Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Sales & Marketing field
– Broadway Xanadu 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 Broadway Xanadu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Broadway Xanadu has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Broadway Xanadu to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Broadway Xanadu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Broadway Xanadu 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.
Diverse revenue streams
– Broadway Xanadu is present in almost all the verticals within the industry. This has provided firm in Xanadu on Broadway 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 Broadway Xanadu in the sector have low bargaining power. Xanadu on Broadway has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Broadway Xanadu to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– Xanadu on Broadway firm has clearly differentiated products in the market place. This has enabled Broadway Xanadu to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Broadway Xanadu to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Broadway Xanadu 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 Xanadu on Broadway - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Broadway Xanadu has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Xanadu on Broadway HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Broadway Xanadu
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Broadway Xanadu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Broadway Xanadu 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.
Operational resilience
– The operational resilience strategy in the Xanadu on Broadway Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Xanadu on Broadway | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xanadu on Broadway are -
Interest costs
– Compare to the competition, Broadway Xanadu has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Broadway Xanadu 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Xanadu on Broadway 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 Broadway Xanadu 's lucrative customers.
Need for greater diversity
– Broadway Xanadu 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.
Aligning sales with marketing
– It come across in the case study Xanadu on Broadway 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 Xanadu on Broadway can leverage the sales team experience to cultivate customer relationships as Broadway Xanadu is planning to shift buying processes online.
High cash cycle compare to competitors
Broadway Xanadu 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Anita Elberse suggests that, Broadway Xanadu 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Xanadu on Broadway, it seems that the employees of Broadway Xanadu 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.
Products dominated business model
– Even though Broadway Xanadu 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 - Xanadu on Broadway should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Xanadu on Broadway HBR case study mentions - Broadway Xanadu 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.
Lack of clear differentiation of Broadway Xanadu products
– To increase the profitability and margins on the products, Broadway Xanadu needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Xanadu on Broadway | 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 Xanadu on Broadway are -
Manufacturing automation
– Broadway Xanadu 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.
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. Broadway Xanadu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Broadway Xanadu 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.
Creating value in data economy
– The success of analytics program of Broadway Xanadu has opened avenues for new revenue streams for the organization in the industry. This can help Broadway Xanadu to build a more holistic ecosystem as suggested in the Xanadu on Broadway case study. Broadway Xanadu can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Broadway Xanadu 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Broadway Xanadu 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 Broadway Xanadu to hire the very best people irrespective of their geographical location.
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. Broadway Xanadu 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. Broadway Xanadu 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.
Learning at scale
– Online learning technologies has now opened space for Broadway Xanadu 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Broadway Xanadu in the consumer business. Now Broadway Xanadu can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Broadway Xanadu 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Broadway Xanadu can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Xanadu on Broadway, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Broadway Xanadu 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.
Using analytics as competitive advantage
– Broadway Xanadu 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 Xanadu on Broadway - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Broadway Xanadu to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Xanadu on Broadway External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Xanadu on Broadway are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Broadway Xanadu 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 Broadway Xanadu in the Sales & Marketing sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Broadway Xanadu will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Broadway Xanadu 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.
Increasing wage structure of Broadway Xanadu
– 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 Broadway Xanadu.
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.
Shortening product life cycle
– it is one of the major threat that Broadway Xanadu is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Broadway Xanadu.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Broadway Xanadu 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 Xanadu on Broadway .
Environmental challenges
– Broadway Xanadu 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. Broadway Xanadu can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology acceleration in Forth Industrial Revolution
– Broadway Xanadu has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Broadway Xanadu 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.
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. Broadway Xanadu needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
Weighted SWOT Analysis of Xanadu on Broadway 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 Xanadu on Broadway 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 Xanadu on Broadway 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 Xanadu on Broadway 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 Xanadu on Broadway 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 Broadway Xanadu needs to make to build a sustainable competitive advantage.