WMS: Revenue Model Innovation for Gaming Solutions SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of WMS: Revenue Model Innovation for Gaming Solutions
In 2014 WMS Gaming, a manufacturer and seller of slot machines to casinos, was considering a redesign of its existing revenue model. As technology evolved and customer demand for gaming solutions intensified, new and innovative revenue models were being adopted in other technology markets. Most notably, the subscription revenue model, in which customers paid a monthly subscription fee rather than a large upfront fee, was becoming widely adopted in the software industry. Product manager Dayna Stone had the task of evaluating several revenue models and recommending one that most suited WMS's business needs and at the same time took customer needs and wishes into consideration. Complicating this decision were several factors that would have to be kept in mind. Americans' love of gaming had led to a mushrooming of casinos, which meant increased competition for casino dollars. Yet the financial crisis of 2008 and its aftermath had weakened demand for casinos. In addition, casinos, depending on the type of customers they attracted, differed in their appetite for innovation and maintenance of their slot machines. Students will step into the shoes of Dayna Stone as she undertakes the task of weighing these factors and selecting the right revenue model.
Authors :: Mohanbir Sawhney, Pallavi Goodman, Ori Broit
Swot Analysis of "WMS: Revenue Model Innovation for Gaming Solutions" written by Mohanbir Sawhney, Pallavi Goodman, Ori Broit includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Casinos Gaming facing as an external strategic factors. Some of the topics covered in WMS: Revenue Model Innovation for Gaming Solutions case study are - Strategic Management Strategies, Pricing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the WMS: Revenue Model Innovation for Gaming Solutions casestudy better are - – increasing transportation and logistics costs, there is increasing trade war between United States & China, there is backlash against globalization, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of WMS: Revenue Model Innovation for Gaming Solutions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in WMS: Revenue Model Innovation for Gaming Solutions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Casinos Gaming, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Casinos Gaming 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 WMS: Revenue Model Innovation for Gaming Solutions can be done for the following purposes –
1. Strategic planning using facts provided in WMS: Revenue Model Innovation for Gaming Solutions case study
2. Improving business portfolio management of Casinos Gaming
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 Casinos Gaming
Strengths WMS: Revenue Model Innovation for Gaming Solutions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Casinos Gaming in WMS: Revenue Model Innovation for Gaming Solutions Harvard Business Review case study are -
Organizational Resilience of Casinos Gaming
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Casinos Gaming does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Casinos Gaming digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Casinos Gaming has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Casinos Gaming 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.
Innovation driven organization
– Casinos Gaming is one of the most innovative firm in sector. Manager in WMS: Revenue Model Innovation for Gaming Solutions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– WMS: Revenue Model Innovation for Gaming Solutions firm has clearly differentiated products in the market place. This has enabled Casinos Gaming to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Casinos Gaming to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Casinos Gaming 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 WMS: Revenue Model Innovation for Gaming Solutions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Casinos Gaming has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Casinos Gaming 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.
Cross disciplinary teams
– Horizontal connected teams at the Casinos Gaming 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.
Learning organization
- Casinos Gaming 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 Casinos Gaming is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in WMS: Revenue Model Innovation for Gaming Solutions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Casinos Gaming 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)
– Casinos Gaming 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 WMS: Revenue Model Innovation for Gaming Solutions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the WMS: Revenue Model Innovation for Gaming Solutions 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 WMS: Revenue Model Innovation for Gaming Solutions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of WMS: Revenue Model Innovation for Gaming Solutions are -
Interest costs
– Compare to the competition, Casinos Gaming 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, Casinos Gaming 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.
Capital Spending Reduction
– Even during the low interest decade, Casinos Gaming has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Casinos Gaming supply chain. Even after few cautionary changes mentioned in the HBR case study - WMS: Revenue Model Innovation for Gaming Solutions, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Casinos Gaming vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study WMS: Revenue Model Innovation for Gaming Solutions, it seems that the employees of Casinos Gaming 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Mohanbir Sawhney, Pallavi Goodman, Ori Broit suggests that, Casinos Gaming 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.
Low market penetration in new markets
– Outside its home market of Casinos Gaming, firm in the HBR case study WMS: Revenue Model Innovation for Gaming Solutions needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study WMS: Revenue Model Innovation for Gaming Solutions, is just above the industry average. Casinos Gaming needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As WMS: Revenue Model Innovation for Gaming Solutions HBR case study mentions - Casinos Gaming 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.
Skills based hiring
– The stress on hiring functional specialists at Casinos Gaming 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 cash cycle compare to competitors
Casinos Gaming 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.
Opportunities WMS: Revenue Model Innovation for Gaming Solutions | 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 WMS: Revenue Model Innovation for Gaming Solutions are -
Buying journey improvements
– Casinos Gaming can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. WMS: Revenue Model Innovation for Gaming Solutions 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.
Developing new processes and practices
– Casinos Gaming can develop new processes and procedures in Strategy & Execution 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.
Manufacturing automation
– Casinos Gaming can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Loyalty marketing
– Casinos Gaming 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.
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. Casinos Gaming can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Casinos Gaming is facing challenges because of the dominance of functional experts in the organization. WMS: Revenue Model Innovation for Gaming Solutions 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Casinos Gaming 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.
Building a culture of innovation
– managers at Casinos Gaming 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 Strategy & Execution segment.
Leveraging digital technologies
– Casinos Gaming 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.
Creating value in data economy
– The success of analytics program of Casinos Gaming has opened avenues for new revenue streams for the organization in the industry. This can help Casinos Gaming to build a more holistic ecosystem as suggested in the WMS: Revenue Model Innovation for Gaming Solutions case study. Casinos Gaming can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Casinos Gaming in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Casinos Gaming 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, WMS: Revenue Model Innovation for Gaming Solutions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Casinos Gaming 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 Casinos Gaming to hire the very best people irrespective of their geographical location.
Threats WMS: Revenue Model Innovation for Gaming Solutions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study WMS: Revenue Model Innovation for Gaming Solutions are -
Technology acceleration in Forth Industrial Revolution
– Casinos Gaming has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Casinos Gaming 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study WMS: Revenue Model Innovation for Gaming Solutions, Casinos Gaming may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Casinos Gaming 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.
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 Casinos Gaming in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Casinos Gaming
– 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 Casinos Gaming.
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
– Casinos Gaming 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.
Regulatory challenges
– Casinos Gaming 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.
Consumer confidence and its impact on Casinos Gaming 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.
Environmental challenges
– Casinos Gaming 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. Casinos Gaming can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Casinos Gaming business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Casinos Gaming 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.
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 Casinos Gaming.
Weighted SWOT Analysis of WMS: Revenue Model Innovation for Gaming Solutions 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 WMS: Revenue Model Innovation for Gaming Solutions 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 WMS: Revenue Model Innovation for Gaming Solutions 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 WMS: Revenue Model Innovation for Gaming Solutions 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 WMS: Revenue Model Innovation for Gaming Solutions 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 Casinos Gaming needs to make to build a sustainable competitive advantage.
