Atari: Between a Rock and a Hard Place SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Atari: Between a Rock and a Hard Place
Atari, a maker of video games, went through several owners over the years winding up controlled by Infogrames, a French publisher of video games. Infogrames later sold Atari shares in a secondary public offering, eventually reducing the parent's share to 51.6 percent by September 2005 creating a complicated two-tier ownership structure. Two levels of management made it difficult to get things done. The financial structure was a problem for Infogrames because the French company had to consolidate 100 percent of Atari's results even though it only owned 51 percent of the company. Atari was generating substantial losses, had defaulted on its debt, and was faced with the possibility of filing for bankruptcy without more working capital. The independent directors of Atari, when confronted with an unsolicited Infogrames buyout offer, had several options: (1) agree to the $1.68 offer (take the money and run); (2) pursue a white knight (a buyout from another investor of company that would be willing to pay a higher price and invest working capital); (3) file a lawsuit to stop the takeover to buy time or perhaps force Infogrames to increase its offer.
Swot Analysis of "Atari: Between a Rock and a Hard Place" written by James Shein, Judith Crown includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Infogrames Atari facing as an external strategic factors. Some of the topics covered in Atari: Between a Rock and a Hard Place case study are - Strategic Management Strategies, Entrepreneurship, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Atari: Between a Rock and a Hard Place casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Atari: Between a Rock and a Hard Place
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Atari: Between a Rock and a Hard Place case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Infogrames Atari, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Infogrames Atari 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 Atari: Between a Rock and a Hard Place can be done for the following purposes –
1. Strategic planning using facts provided in Atari: Between a Rock and a Hard Place case study
2. Improving business portfolio management of Infogrames Atari
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Infogrames Atari
Strengths Atari: Between a Rock and a Hard Place | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Infogrames Atari in Atari: Between a Rock and a Hard Place Harvard Business Review case study are -
Ability to recruit top talent
– Infogrames Atari is one of the leading recruiters in the industry. Managers in the Atari: Between a Rock and a Hard Place are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Atari: Between a Rock and a Hard Place 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.
Cross disciplinary teams
– Horizontal connected teams at the Infogrames Atari 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.
Innovation driven organization
– Infogrames Atari is one of the most innovative firm in sector. Manager in Atari: Between a Rock and a Hard Place Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Infogrames Atari in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Infogrames Atari is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Infogrames Atari 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 Atari: Between a Rock and a Hard Place - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Infogrames Atari in the sector have low bargaining power. Atari: Between a Rock and a Hard Place has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Infogrames Atari to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Infogrames Atari 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 Atari: Between a Rock and a Hard Place HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Infogrames Atari 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 Infogrames Atari is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Atari: Between a Rock and a Hard Place Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Infogrames Atari has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Infogrames Atari to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Atari: Between a Rock and a Hard Place firm has clearly differentiated products in the market place. This has enabled Infogrames Atari to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Infogrames Atari to invest into research and development (R&D) and innovation.
Weaknesses Atari: Between a Rock and a Hard Place | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Atari: Between a Rock and a Hard Place are -
Skills based hiring
– The stress on hiring functional specialists at Infogrames Atari 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.
Interest costs
– Compare to the competition, Infogrames Atari 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Infogrames Atari 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.
Increasing silos among functional specialists
– The organizational structure of Infogrames Atari is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Infogrames Atari needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Infogrames Atari to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, James Shein, Judith Crown suggests that, Infogrames Atari 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 Atari: Between a Rock and a Hard Place, it seems that the employees of Infogrames Atari 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 Atari: Between a Rock and a Hard Place HBR case study mentions - Infogrames Atari 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Atari: Between a Rock and a Hard Place 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 Infogrames Atari 's lucrative customers.
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 Infogrames Atari supply chain. Even after few cautionary changes mentioned in the HBR case study - Atari: Between a Rock and a Hard Place, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Infogrames Atari vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Infogrames Atari is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Atari: Between a Rock and a Hard Place can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Infogrames Atari, firm in the HBR case study Atari: Between a Rock and a Hard Place needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Atari: Between a Rock and a Hard Place | 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 Atari: Between a Rock and a Hard Place are -
Loyalty marketing
– Infogrames Atari 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Infogrames Atari can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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. Infogrames Atari can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Infogrames Atari 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, Atari: Between a Rock and a Hard Place, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Infogrames Atari is facing challenges because of the dominance of functional experts in the organization. Atari: Between a Rock and a Hard Place 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Infogrames Atari can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Infogrames Atari 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 Infogrames Atari in the consumer business. Now Infogrames Atari can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Infogrames Atari has opened avenues for new revenue streams for the organization in the industry. This can help Infogrames Atari to build a more holistic ecosystem as suggested in the Atari: Between a Rock and a Hard Place case study. Infogrames Atari can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Infogrames Atari can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Atari: Between a Rock and a Hard Place 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Infogrames Atari can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Infogrames Atari can use these opportunities to build new business models that can help the communities that Infogrames Atari operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Infogrames Atari 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.
Threats Atari: Between a Rock and a Hard Place External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Atari: Between a Rock and a Hard Place are -
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 Infogrames Atari.
Regulatory challenges
– Infogrames Atari 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Infogrames Atari in the Strategy & Execution industry. The Strategy & Execution 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.
Consumer confidence and its impact on Infogrames Atari 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.
High dependence on third party suppliers
– Infogrames Atari 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.
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. Infogrames Atari 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Infogrames Atari can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Infogrames Atari in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Infogrames Atari 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.
Technology acceleration in Forth Industrial Revolution
– Infogrames Atari has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Infogrames Atari needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Infogrames Atari business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Infogrames Atari 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 Atari: Between a Rock and a Hard Place .
Weighted SWOT Analysis of Atari: Between a Rock and a Hard Place 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 Atari: Between a Rock and a Hard Place 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 Atari: Between a Rock and a Hard Place 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 Atari: Between a Rock and a Hard Place 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 Atari: Between a Rock and a Hard Place 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 Infogrames Atari needs to make to build a sustainable competitive advantage.
