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 - – geopolitical disruptions, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, 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 -
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.
Strong track record of project management
– Beirut L'atelier is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Effective Research and Development (R&D)
– Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Beirut L'atelier has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beirut L'atelier 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.
High brand equity
– Beirut L'atelier has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beirut L'atelier to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
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 cash cycle compare to competitors
Beirut L'atelier 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.
Need for greater diversity
– Beirut L'atelier has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Beirut L'atelier 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Randa Salamoun, Bettina Bastian suggests that, Beirut L'atelier 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.
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.
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.
Aligning sales with marketing
– It come across in the case study L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty can leverage the sales team experience to cultivate customer relationships as Beirut L'atelier is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study L'Atelier Art Lounge: Times of Uncertainty, 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.
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 -
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. Beirut L'atelier 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. Beirut L'atelier 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beirut L'atelier can use these opportunities to build new business models that can help the communities that Beirut L'atelier operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Beirut L'atelier can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beirut L'atelier can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Beirut L'atelier in the consumer business. Now Beirut L'atelier 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 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.
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.
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.
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 Beirut L'atelier 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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beirut L'atelier 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study L'Atelier Art Lounge: Times of Uncertainty, Beirut L'atelier 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 Beirut L'atelier.
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.
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. Beirut L'atelier needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Beirut L'atelier can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 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 .
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.
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.
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.
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.