The American Repertory Theater SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of The American Repertory Theater
When Diane Paulus, artistic director and CEO of the American Repertory Theater (A.R.T. - also seen spelled as American Repertory Theatre) first started in 2008, she attracted media coverage around an aesthetic that aimed to give the audience more ownership over the theater experience, excited theatergoers by experimenting with new venues and received critical recognition for the breadth and range of the work she staged. Paulus also recognized the changing realities in theater, which included dropping subscription numbers and an increase in single ticket buyers. Paulus, inspired by the mission of the A.R.T. - to expand the boundaries of theater - hastened a shift in the A.R.T. business model. Her new plans included operating two unique segmented venues, creating and presenting varied content that aimed to be both challenging and popular, and driving a sales and marketing campaign focused on single ticket buyers, memberships and dynamic pricing. Early results showed some promise; the A.R.T. was closer to break-even than in previous years. However, some questioned if the A.R.T. was beginning to look like a commercial theater, focused on presenting theater that sold, rather than truly expanding boundaries. Despite the questioning, Paulus remained committed to fulfilling her vision of the A.R.T. mission in order to solidify A.R.T. as a leading and financially stable not-for-profit regional theater.
Authors :: Rohit Deshpande, Allen S. Grossman, Ryan Johnson
Swot Analysis of "The American Repertory Theater" written by Rohit Deshpande, Allen S. Grossman, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A.r.t Theater facing as an external strategic factors. Some of the topics covered in The American Repertory Theater case study are - Strategic Management Strategies, Change management, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The American Repertory Theater casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
there is backlash against globalization, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The American Repertory Theater
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The American Repertory Theater case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A.r.t Theater, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A.r.t Theater 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 The American Repertory Theater can be done for the following purposes –
1. Strategic planning using facts provided in The American Repertory Theater case study
2. Improving business portfolio management of A.r.t Theater
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 A.r.t Theater
Strengths The American Repertory Theater | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A.r.t Theater in The American Repertory Theater Harvard Business Review case study are -
Innovation driven organization
– A.r.t Theater is one of the most innovative firm in sector. Manager in The American Repertory Theater Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of A.r.t Theater
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A.r.t Theater does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- A.r.t Theater 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 A.r.t Theater is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The American Repertory Theater Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the The American Repertory Theater 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.
Highly skilled collaborators
– A.r.t Theater 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 The American Repertory Theater HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– A.r.t Theater 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 Rohit Deshpande, Allen S. Grossman, Ryan Johnson 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.
Diverse revenue streams
– A.r.t Theater is present in almost all the verticals within the industry. This has provided firm in The American Repertory Theater 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.
Ability to recruit top talent
– A.r.t Theater is one of the leading recruiters in the industry. Managers in the The American Repertory Theater are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– A.r.t Theater is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of A.r.t Theater in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the A.r.t Theater 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.
Training and development
– A.r.t Theater has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The American Repertory Theater 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.
Weaknesses The American Repertory Theater | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The American Repertory Theater are -
Increasing silos among functional specialists
– The organizational structure of A.r.t Theater is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. A.r.t Theater needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help A.r.t Theater to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, A.r.t Theater is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The American Repertory Theater 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 cash cycle compare to competitors
A.r.t Theater 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The American Repertory Theater 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 A.r.t Theater 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The American Repertory Theater, is just above the industry average. A.r.t Theater 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 The American Repertory Theater 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 The American Repertory Theater can leverage the sales team experience to cultivate customer relationships as A.r.t Theater is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Rohit Deshpande, Allen S. Grossman, Ryan Johnson suggests that, A.r.t Theater 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.
Capital Spending Reduction
– Even during the low interest decade, A.r.t Theater 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.
Skills based hiring
– The stress on hiring functional specialists at A.r.t Theater 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The American Repertory Theater, in the dynamic environment A.r.t Theater has struggled to respond to the nimble upstart competition. A.r.t Theater has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of A.r.t Theater products
– To increase the profitability and margins on the products, A.r.t Theater needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The American Repertory Theater | 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 The American Repertory Theater are -
Low interest rates
– Even though inflation is raising its head in most developed economies, A.r.t Theater 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, A.r.t Theater is facing challenges because of the dominance of functional experts in the organization. The American Repertory Theater 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.
Learning at scale
– Online learning technologies has now opened space for A.r.t Theater to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at A.r.t Theater 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects A.r.t Theater can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. A.r.t Theater 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. A.r.t Theater 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
– A.r.t Theater 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, A.r.t Theater 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, The American Repertory Theater, 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, A.r.t Theater can use these opportunities to build new business models that can help the communities that A.r.t Theater operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 A.r.t Theater in the consumer business. Now A.r.t Theater can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– A.r.t Theater 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 The American Repertory Theater - to build a competitive advantage using analytics. The analytics driven competitive advantage can help A.r.t Theater to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 A.r.t Theater 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.
Developing new processes and practices
– A.r.t Theater 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 The American Repertory Theater External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The American Repertory Theater are -
High dependence on third party suppliers
– A.r.t Theater 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, A.r.t Theater 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 The American Repertory Theater .
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 A.r.t Theater.
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.
Shortening product life cycle
– it is one of the major threat that A.r.t Theater is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– A.r.t Theater 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents A.r.t Theater with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– A.r.t Theater 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. A.r.t Theater can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. A.r.t Theater 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.
Increasing wage structure of A.r.t Theater
– 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 A.r.t Theater.
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 A.r.t Theater in the Strategy & Execution sector and impact the bottomline of the organization.
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 A.r.t Theater business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on A.r.t Theater 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.
Weighted SWOT Analysis of The American Repertory Theater 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 The American Repertory Theater 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 The American Repertory Theater 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 The American Repertory Theater 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 The American Repertory Theater 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 A.r.t Theater needs to make to build a sustainable competitive advantage.