Blockbuster Entertainment Corp.: Growth Strategies for 1995 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Blockbuster Entertainment Corp.: Growth Strategies for 1995
Despite its clear leadership position, Blockbuster was running out of places in which to open new stores. As the growth and profitability of its traditional video rental business slowed, James Hilmer, chief marketing officer, evaluated two growth opportunities: set up virtual reality parlors within existing video stores, the test marketing of which had shown positive results; or leverage its retailing skills by diversifying into specialty retailing of merchandise from entertainment properties of its partners Viacom and Paramount. In this effort to grow by brand extension, Hilmer analyzes which option lets Blockbuster leverage its existing brand the most. How do the two market segments compare in terms of size, existing and future competition, investment requirements and returns, and Blockbuster's ability to grow and defend itself in the segment?
Swot Analysis of "Blockbuster Entertainment Corp.: Growth Strategies for 1995" written by Mohanbir Sawhney includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hilmer Blockbuster facing as an external strategic factors. Some of the topics covered in Blockbuster Entertainment Corp.: Growth Strategies for 1995 case study are - Strategic Management Strategies, Growth strategy, Market research, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Blockbuster Entertainment Corp.: Growth Strategies for 1995 casestudy better are - – 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, increasing household debt because of falling income levels, technology disruption, increasing commodity prices, supply chains are disrupted by pandemic , wage bills are increasing,
there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Blockbuster Entertainment Corp.: Growth Strategies for 1995
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Blockbuster Entertainment Corp.: Growth Strategies for 1995 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hilmer Blockbuster, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hilmer Blockbuster 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 can be done for the following purposes –
1. Strategic planning using facts provided in Blockbuster Entertainment Corp.: Growth Strategies for 1995 case study
2. Improving business portfolio management of Hilmer Blockbuster
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 Hilmer Blockbuster
Strengths Blockbuster Entertainment Corp.: Growth Strategies for 1995 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hilmer Blockbuster in Blockbuster Entertainment Corp.: Growth Strategies for 1995 Harvard Business Review case study are -
Ability to recruit top talent
– Hilmer Blockbuster is one of the leading recruiters in the industry. Managers in the Blockbuster Entertainment Corp.: Growth Strategies for 1995 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Hilmer Blockbuster 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 Hilmer Blockbuster is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Blockbuster Entertainment Corp.: Growth Strategies for 1995 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Hilmer Blockbuster 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.
Strong track record of project management
– Hilmer Blockbuster is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Blockbuster Entertainment Corp.: Growth Strategies for 1995 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.
Cross disciplinary teams
– Horizontal connected teams at the Hilmer Blockbuster 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.
High brand equity
– Hilmer Blockbuster has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hilmer Blockbuster to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hilmer Blockbuster
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hilmer Blockbuster does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Hilmer Blockbuster in the sector have low bargaining power. Blockbuster Entertainment Corp.: Growth Strategies for 1995 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hilmer Blockbuster to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hilmer Blockbuster in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Hilmer Blockbuster 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Hilmer Blockbuster has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Blockbuster Entertainment Corp.: Growth Strategies for 1995 are -
Low market penetration in new markets
– Outside its home market of Hilmer Blockbuster, firm in the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Blockbuster Entertainment Corp.: Growth Strategies for 1995, in the dynamic environment Hilmer Blockbuster has struggled to respond to the nimble upstart competition. Hilmer Blockbuster 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 HBR case study mentions - Hilmer Blockbuster 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, Hilmer Blockbuster 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hilmer Blockbuster 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.
No frontier risks strategy
– After analyzing the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995, 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.
Interest costs
– Compare to the competition, Hilmer Blockbuster 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995, is just above the industry average. Hilmer Blockbuster 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Hilmer Blockbuster 's lucrative customers.
Need for greater diversity
– Hilmer Blockbuster 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995, it seems that the employees of Hilmer Blockbuster 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.
Opportunities Blockbuster Entertainment Corp.: Growth Strategies for 1995 | 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hilmer Blockbuster 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.
Developing new processes and practices
– Hilmer Blockbuster 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.
Better consumer reach
– The expansion of the 5G network will help Hilmer Blockbuster to increase its market reach. Hilmer Blockbuster 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hilmer Blockbuster 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.
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. Hilmer Blockbuster can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Hilmer Blockbuster can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Blockbuster Entertainment Corp.: Growth Strategies for 1995 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.
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 Hilmer Blockbuster 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.
Leveraging digital technologies
– Hilmer Blockbuster 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.
Creating value in data economy
– The success of analytics program of Hilmer Blockbuster has opened avenues for new revenue streams for the organization in the industry. This can help Hilmer Blockbuster to build a more holistic ecosystem as suggested in the Blockbuster Entertainment Corp.: Growth Strategies for 1995 case study. Hilmer Blockbuster can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hilmer Blockbuster can use these opportunities to build new business models that can help the communities that Hilmer Blockbuster operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Hilmer Blockbuster 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hilmer Blockbuster can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hilmer Blockbuster 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 Hilmer Blockbuster to hire the very best people irrespective of their geographical location.
Threats Blockbuster Entertainment Corp.: Growth Strategies for 1995 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Blockbuster Entertainment Corp.: Growth Strategies for 1995 are -
Consumer confidence and its impact on Hilmer Blockbuster 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.
Regulatory challenges
– Hilmer Blockbuster 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.
Increasing wage structure of Hilmer Blockbuster
– 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 Hilmer Blockbuster.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hilmer Blockbuster with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hilmer Blockbuster business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Hilmer Blockbuster is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Blockbuster Entertainment Corp.: Growth Strategies for 1995, Hilmer Blockbuster 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 .
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. Hilmer Blockbuster 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.
High dependence on third party suppliers
– Hilmer Blockbuster 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.
Stagnating economy with rate increase
– Hilmer Blockbuster 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.
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 Hilmer Blockbuster in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Blockbuster Entertainment Corp.: Growth Strategies for 1995 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 Hilmer Blockbuster needs to make to build a sustainable competitive advantage.