Competitive Dynamics in Home Video Games (A): The Age of Atari SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Competitive Dynamics in Home Video Games (A): The Age of Atari
Tells the story of the rise and fall of Atari Corp., the dominant player in arcade and home video games in the 1970s and early 1980s. During this period, Atari grew from a $500 initial investment into a $2 billion in revenues per year enterprise, becoming the fastest growing company in the history of the United States. The wild ride came to a crashing halt in 1983, however, when the bottom dropped out of the video game market, partly as a result of Atari's actions (or inaction). This is part of a case series examining the competitive dynamics in the home video game industry from 1970 into the new millennium. A rewritten version of an earlier case.
Swot Analysis of "Competitive Dynamics in Home Video Games (A): The Age of Atari" written by Peter J. Coughlan, Debbie Freier includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Atari Video facing as an external strategic factors. Some of the topics covered in Competitive Dynamics in Home Video Games (A): The Age of Atari case study are - Strategic Management Strategies, Competitive strategy, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Competitive Dynamics in Home Video Games (A): The Age of Atari casestudy better are - – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing energy prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Competitive Dynamics in Home Video Games (A): The Age of Atari
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Competitive Dynamics in Home Video Games (A): The Age of Atari case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Atari Video, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Atari Video 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 Competitive Dynamics in Home Video Games (A): The Age of Atari can be done for the following purposes –
1. Strategic planning using facts provided in Competitive Dynamics in Home Video Games (A): The Age of Atari case study
2. Improving business portfolio management of Atari Video
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 Atari Video
Strengths Competitive Dynamics in Home Video Games (A): The Age of Atari | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Atari Video in Competitive Dynamics in Home Video Games (A): The Age of Atari Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Atari Video digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Atari Video 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.
Successful track record of launching new products
– Atari Video has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Atari Video 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.
Ability to lead change in Strategy & Execution field
– Atari Video 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 Atari Video in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Atari Video is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Peter J. Coughlan, Debbie Freier can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Competitive Dynamics in Home Video Games (A): The Age of Atari 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.
Learning organization
- Atari Video 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 Atari Video is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Competitive Dynamics in Home Video Games (A): The Age of Atari Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Atari Video
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Atari Video does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Competitive Dynamics in Home Video Games (A): The Age of Atari firm has clearly differentiated products in the market place. This has enabled Atari Video to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Atari Video to invest into research and development (R&D) and innovation.
Innovation driven organization
– Atari Video is one of the most innovative firm in sector. Manager in Competitive Dynamics in Home Video Games (A): The Age of Atari Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Atari Video 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 Competitive Dynamics in Home Video Games (A): The Age of Atari HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Atari Video in the sector have low bargaining power. Competitive Dynamics in Home Video Games (A): The Age of Atari has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Atari Video to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Atari Video is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Competitive Dynamics in Home Video Games (A): The Age of Atari | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Competitive Dynamics in Home Video Games (A): The Age of Atari are -
High cash cycle compare to competitors
Atari Video 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.
Products dominated business model
– Even though Atari Video 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 - Competitive Dynamics in Home Video Games (A): The Age of Atari should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari, it seems that the employees of Atari Video 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari, is just above the industry average. Atari Video 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.
Aligning sales with marketing
– It come across in the case study Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Competitive Dynamics in Home Video Games (A): The Age of Atari can leverage the sales team experience to cultivate customer relationships as Atari Video is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Atari Video 's lucrative customers.
Slow to strategic competitive environment developments
– As Competitive Dynamics in Home Video Games (A): The Age of Atari HBR case study mentions - Atari Video 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 Atari Video products
– To increase the profitability and margins on the products, Atari Video needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Competitive Dynamics in Home Video Games (A): The Age of Atari, in the dynamic environment Atari Video has struggled to respond to the nimble upstart competition. Atari Video has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Atari Video, firm in the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Competitive Dynamics in Home Video Games (A): The Age of Atari | 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 Competitive Dynamics in Home Video Games (A): The Age of Atari are -
Creating value in data economy
– The success of analytics program of Atari Video has opened avenues for new revenue streams for the organization in the industry. This can help Atari Video to build a more holistic ecosystem as suggested in the Competitive Dynamics in Home Video Games (A): The Age of Atari case study. Atari Video can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Atari Video 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 Competitive Dynamics in Home Video Games (A): The Age of Atari - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Atari Video to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Atari Video can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Atari Video 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
– Atari Video 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.
Building a culture of innovation
– managers at Atari Video 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.
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 Atari Video 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Atari Video 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 Atari Video to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Atari Video 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. Atari Video 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.
Loyalty marketing
– Atari Video 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Atari Video 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Atari Video 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Atari Video can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Competitive Dynamics in Home Video Games (A): The Age of Atari External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Competitive Dynamics in Home Video Games (A): The Age of Atari 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.
Consumer confidence and its impact on Atari Video 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.
Regulatory challenges
– Atari Video 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 Atari Video 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.
Increasing wage structure of Atari Video
– 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 Atari Video.
Environmental challenges
– Atari Video 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. Atari Video can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Atari Video is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Atari Video needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Competitive Dynamics in Home Video Games (A): The Age of Atari, Atari Video 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 .
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 Atari Video.
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 Atari Video 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, Atari Video 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 Competitive Dynamics in Home Video Games (A): The Age of Atari .
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 Atari Video in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Competitive Dynamics in Home Video Games (A): The Age of Atari 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 Atari Video needs to make to build a sustainable competitive advantage.
