L'Atelier Art Lounge: Times of Uncertainty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of L'Atelier Art Lounge: Times of Uncertainty
On January 31, 2014, the founder and chief executive officer of L'Atelier Art Lounge, an art workshop with branches in Bahrain and Lebanon, faces numerous challenges: not only whether to grow the business but how to achieve a reasonable work-life balance. Political instability associated with the Arab Spring led her to close one of her shops in Bahrain, but she went ahead with opening a second in Beirut where there are few leisure activities available for children; her offering of educational entertainment has been welcomed by parents, schools and adults looking to revive a hobby or improve their skills. However, as a result of violence spilling over from Syria, many tourists are avoiding Lebanon and her store locations have experienced a dramatic decrease in customers. Now she has one day to decide whether to renew the lease of one of her outlets. This deadline represents an opportunity to consider her options for the future: should she focus on marketing her concept to increase the number of customers and consequently her bottom line, thus improving her cash flow; look for potential investors or apply for a bank loan; or close her least profitable location? Randa Salamoun is affiliated with American University of Beirut. Bettina Bastian is affiliated with American University of Beirut.
Swot Analysis of "L'Atelier Art Lounge: Times of Uncertainty" written by Randa Salamoun, Bettina Bastian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beirut L'atelier facing as an external strategic factors. Some of the topics covered in L'Atelier Art Lounge: Times of Uncertainty case study are - Strategic Management Strategies, Gender and Strategy & Execution.
Some of the macro environment factors that can be used to understand the L'Atelier Art Lounge: Times of Uncertainty casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, there is backlash against globalization, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of L'Atelier Art Lounge: Times of Uncertainty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in L'Atelier Art Lounge: Times of Uncertainty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beirut L'atelier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty can be done for the following purposes –
1. Strategic planning using facts provided in L'Atelier Art Lounge: Times of Uncertainty case study
2. Improving business portfolio management of Beirut L'atelier
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 Beirut L'atelier
Strengths L'Atelier Art Lounge: Times of Uncertainty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beirut L'atelier in L'Atelier Art Lounge: Times of Uncertainty Harvard Business Review case study are -
Organizational Resilience of Beirut L'atelier
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beirut L'atelier does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Beirut L'atelier has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in L'Atelier Art Lounge: Times of Uncertainty Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Strategy & Execution field
– Beirut L'atelier 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 Beirut L'atelier in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Beirut L'atelier is one of the most innovative firm in sector. Manager in L'Atelier Art Lounge: Times of Uncertainty Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Beirut L'atelier are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to recruit top talent
– Beirut L'atelier is one of the leading recruiters in the industry. Managers in the L'Atelier Art Lounge: Times of Uncertainty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Beirut L'atelier is present in almost all the verticals within the industry. This has provided firm in L'Atelier Art Lounge: Times of Uncertainty 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.
Learning organization
- Beirut L'atelier 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 Beirut L'atelier is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in L'Atelier Art Lounge: Times of Uncertainty Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Beirut L'atelier digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beirut L'atelier 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.
Low bargaining power of suppliers
– Suppliers of Beirut L'atelier in the sector have low bargaining power. L'Atelier Art Lounge: Times of Uncertainty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beirut L'atelier to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Beirut L'atelier has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses L'Atelier Art Lounge: Times of Uncertainty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of L'Atelier Art Lounge: Times of Uncertainty are -
High operating costs
– Compare to the competitors, firm in the HBR case study L'Atelier Art Lounge: Times of Uncertainty 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 Beirut L'atelier 's lucrative customers.
Products dominated business model
– Even though Beirut L'atelier 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 - L'Atelier Art Lounge: Times of Uncertainty should strive to include more intangible value offerings along with its core products and services.
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 Beirut L'atelier supply chain. Even after few cautionary changes mentioned in the HBR case study - L'Atelier Art Lounge: Times of Uncertainty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beirut L'atelier 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, Beirut L'atelier is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study L'Atelier Art Lounge: Times of Uncertainty can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the L'Atelier Art Lounge: Times of Uncertainty HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Beirut L'atelier has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Beirut L'atelier 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.
Slow to strategic competitive environment developments
– As L'Atelier Art Lounge: Times of Uncertainty HBR case study mentions - Beirut L'atelier 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.
Slow decision making process
– As mentioned earlier in the report, Beirut L'atelier has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Beirut L'atelier even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study L'Atelier Art Lounge: Times of Uncertainty, is just above the industry average. Beirut L'atelier 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.
Low market penetration in new markets
– Outside its home market of Beirut L'atelier, firm in the HBR case study L'Atelier Art Lounge: Times of Uncertainty needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Beirut L'atelier products
– To increase the profitability and margins on the products, Beirut L'atelier needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities L'Atelier Art Lounge: Times of Uncertainty | 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 L'Atelier Art Lounge: Times of Uncertainty are -
Buying journey improvements
– Beirut L'atelier can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. L'Atelier Art Lounge: Times of Uncertainty 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beirut L'atelier 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.
Building a culture of innovation
– managers at Beirut L'atelier 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.
Loyalty marketing
– Beirut L'atelier 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beirut L'atelier 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 Beirut L'atelier to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Beirut L'atelier has opened avenues for new revenue streams for the organization in the industry. This can help Beirut L'atelier to build a more holistic ecosystem as suggested in the L'Atelier Art Lounge: Times of Uncertainty case study. Beirut L'atelier can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beirut L'atelier 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, L'Atelier Art Lounge: Times of Uncertainty, 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, Beirut L'atelier is facing challenges because of the dominance of functional experts in the organization. L'Atelier Art Lounge: Times of Uncertainty 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.
Leveraging digital technologies
– Beirut L'atelier 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.
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. Beirut L'atelier can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Beirut L'atelier 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.
Better consumer reach
– The expansion of the 5G network will help Beirut L'atelier to increase its market reach. Beirut L'atelier will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– Beirut L'atelier 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.
Threats L'Atelier Art Lounge: Times of Uncertainty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study L'Atelier Art Lounge: Times of Uncertainty are -
Consumer confidence and its impact on Beirut L'atelier 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.
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.
Technology acceleration in Forth Industrial Revolution
– Beirut L'atelier has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Beirut L'atelier 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.
High dependence on third party suppliers
– Beirut L'atelier 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.
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 Beirut L'atelier business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Beirut L'atelier
– 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 Beirut L'atelier.
Environmental challenges
– Beirut L'atelier 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. Beirut L'atelier can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty .
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 Beirut L'atelier.
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. Beirut L'atelier 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 Beirut L'atelier in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Beirut L'atelier 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.
Stagnating economy with rate increase
– Beirut L'atelier 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.
Weighted SWOT Analysis of L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 Beirut L'atelier needs to make to build a sustainable competitive advantage.