Dalian Wanda Group: The AMC Entertainment Acquisition (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Dalian Wanda Group: The AMC Entertainment Acquisition (A)
When Dalian Wanda Group of China announced its plan to acquire the AMC Entertainment theatrical exhibition chain in the United States, many people in the U.S were mystified. Unlike China where theatrical exhibition was experiencing rapid growth, the U.S. market was viewed as mature, and rapidly changing technology was giving consumers a widening range of choices for movie viewing. AMC was owned by a group of private equity firms, and their pessimistic view of the industry influenced their strategies and investment decisions. AMC's management team had yet a different view on the prospects of the industry. Thus three present or potential stakeholders, all looking at the same data, had distinctly different views of future prospects. How could this be? The (B) case looks at AMC's performance in the year after the acquisition.
Swot Analysis of "Dalian Wanda Group: The AMC Entertainment Acquisition (A)" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amc Amc's facing as an external strategic factors. Some of the topics covered in Dalian Wanda Group: The AMC Entertainment Acquisition (A) case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dalian Wanda Group: The AMC Entertainment Acquisition (A) casestudy better are - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Dalian Wanda Group: The AMC Entertainment Acquisition (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dalian Wanda Group: The AMC Entertainment Acquisition (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amc Amc's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amc Amc's 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) can be done for the following purposes –
1. Strategic planning using facts provided in Dalian Wanda Group: The AMC Entertainment Acquisition (A) case study
2. Improving business portfolio management of Amc Amc's
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 Amc Amc's
Strengths Dalian Wanda Group: The AMC Entertainment Acquisition (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amc Amc's in Dalian Wanda Group: The AMC Entertainment Acquisition (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Amc Amc's in the sector have low bargaining power. Dalian Wanda Group: The AMC Entertainment Acquisition (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amc Amc's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Amc Amc's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amc Amc's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Amc Amc's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amc Amc's 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.
Diverse revenue streams
– Amc Amc's is present in almost all the verticals within the industry. This has provided firm in Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Amc Amc's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amc Amc's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Amc Amc's is one of the leading recruiters in the industry. Managers in the Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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
- Amc Amc's 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 Amc Amc's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dalian Wanda Group: The AMC Entertainment Acquisition (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Amc Amc's 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 Amc Amc's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Amc Amc's 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 Willy Shih 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.
Training and development
– Amc Amc's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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.
Innovation driven organization
– Amc Amc's is one of the most innovative firm in sector. Manager in Dalian Wanda Group: The AMC Entertainment Acquisition (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Dalian Wanda Group: The AMC Entertainment Acquisition (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dalian Wanda Group: The AMC Entertainment Acquisition (A) are -
Skills based hiring
– The stress on hiring functional specialists at Amc Amc's 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.
Interest costs
– Compare to the competition, Amc Amc's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Amc Amc's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Amc Amc's 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 bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih suggests that, Amc Amc's 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.
No frontier risks strategy
– After analyzing the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (A), 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Amc Amc's 's lucrative customers.
Need for greater diversity
– Amc Amc's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Amc Amc's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dalian Wanda Group: The AMC Entertainment Acquisition (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) can leverage the sales team experience to cultivate customer relationships as Amc Amc's is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (A), it seems that the employees of Amc Amc's 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) | 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) are -
Using analytics as competitive advantage
– Amc Amc's 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amc Amc's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Amc Amc's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amc Amc's is facing challenges because of the dominance of functional experts in the organization. Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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.
Developing new processes and practices
– Amc Amc's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amc Amc's 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. Amc Amc's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Amc Amc's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Amc Amc's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amc Amc's can use these opportunities to build new business models that can help the communities that Amc Amc's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Amc Amc's 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.
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. Amc Amc's 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. Amc Amc's 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.
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 Amc Amc's in the consumer business. Now Amc Amc's can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Amc Amc's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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.
Threats Dalian Wanda Group: The AMC Entertainment Acquisition (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (A) are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amc Amc's 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) .
Shortening product life cycle
– it is one of the major threat that Amc Amc's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Amc Amc's 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.
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. Amc Amc's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amc Amc's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Amc Amc's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Amc Amc's 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.
Stagnating economy with rate increase
– Amc Amc's 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 Amc Amc's in the Strategy & Execution sector and impact the bottomline of the organization.
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. Amc Amc's 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.
Consumer confidence and its impact on Amc Amc's 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 Amc Amc's 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.
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 Amc Amc's business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Dalian Wanda Group: The AMC Entertainment Acquisition (A) 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 Amc Amc's needs to make to build a sustainable competitive advantage.
