The American Repertory Theater SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
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 - – there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, 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, technology disruption, wage bills are increasing,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, 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 -
Effective Research and Development (R&D)
– A.r.t Theater 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 The American Repertory Theater - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Ability to lead change in Strategy & Execution field
– A.r.t Theater 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 A.r.t Theater in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
High switching costs
– The high switching costs that A.r.t Theater 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.
Sustainable margins compare to other players in Strategy & Execution industry
– The American Repertory Theater firm has clearly differentiated products in the market place. This has enabled A.r.t Theater to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped A.r.t Theater to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of A.r.t Theater in the sector have low bargaining power. The American Repertory Theater has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A.r.t Theater to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Successful track record of launching new products
– A.r.t Theater has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. A.r.t Theater 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.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The American Repertory Theater, it seems that the employees of A.r.t Theater don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The American Repertory Theater 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 A.r.t Theater has relatively successful track record of launching new products.
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.
Need for greater diversity
– A.r.t Theater 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.
Interest costs
– Compare to the competition, A.r.t Theater has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Slow to strategic competitive environment developments
– As The American Repertory Theater HBR case study mentions - A.r.t Theater 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.
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.
Products dominated business model
– Even though A.r.t Theater 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 - The American Repertory Theater should strive to include more intangible value offerings along with its core products and services.
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.
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 -
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.
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.
Creating value in data economy
– The success of analytics program of A.r.t Theater has opened avenues for new revenue streams for the organization in the industry. This can help A.r.t Theater to build a more holistic ecosystem as suggested in the The American Repertory Theater case study. A.r.t Theater can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help A.r.t Theater to increase its market reach. A.r.t Theater 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.
Buying journey improvements
– A.r.t Theater can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The American Repertory Theater 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.
Manufacturing automation
– A.r.t Theater 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.
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.
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. A.r.t Theater can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
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 -
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.
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.
Technology acceleration in Forth Industrial Revolution
– A.r.t Theater has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, A.r.t Theater 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.
Regulatory challenges
– A.r.t Theater 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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The American Repertory Theater, A.r.t Theater 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 A.r.t Theater.
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. A.r.t Theater needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
