Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B)
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 (B)" 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 (B) 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 (B) casestudy better are - – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing commodity prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Dalian Wanda Group: The AMC Entertainment Acquisition (B)
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 (B) 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 (B) can be done for the following purposes –
1. Strategic planning using facts provided in Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B) | 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 (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Dalian Wanda Group: The AMC Entertainment Acquisition (B) firm has clearly differentiated products in the market place. This has enabled Amc Amc's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Amc Amc's to invest into research and development (R&D) and innovation.
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 (B) 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.
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.
Effective Research and Development (R&D)
– Amc Amc's 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 Dalian Wanda Group: The AMC Entertainment Acquisition (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 (B) 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.
Strong track record of project management
– Amc Amc's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Innovation driven organization
– Amc Amc's is one of the most innovative firm in sector. Manager in Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dalian Wanda Group: The AMC Entertainment Acquisition (B) are -
Slow decision making process
– As mentioned earlier in the report, Amc Amc's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Amc Amc's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Amc Amc's products
– To increase the profitability and margins on the products, Amc Amc's needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Amc Amc's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Amc Amc's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amc Amc's 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, 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 (B) 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amc Amc's supply chain. Even after few cautionary changes mentioned in the HBR case study - Dalian Wanda Group: The AMC Entertainment Acquisition (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amc Amc's vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (B), 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (B), 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Amc Amc's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High 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.
Opportunities Dalian Wanda Group: The AMC Entertainment Acquisition (B) | 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 (B) are -
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amc Amc's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amc Amc's 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, Dalian Wanda Group: The AMC Entertainment Acquisition (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 (B) - 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.
Creating value in data economy
– The success of analytics program of Amc Amc's has opened avenues for new revenue streams for the organization in the industry. This can help Amc Amc's to build a more holistic ecosystem as suggested in the Dalian Wanda Group: The AMC Entertainment Acquisition (B) case study. Amc Amc's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Amc Amc's 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.
Better consumer reach
– The expansion of the 5G network will help Amc Amc's to increase its market reach. Amc Amc's 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.
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 (B) 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.
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.
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.
Loyalty marketing
– Amc Amc's 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.
Threats Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Dalian Wanda Group: The AMC Entertainment Acquisition (B), Amc Amc's 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 .
Regulatory challenges
– Amc Amc's 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 Amc Amc's
– 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 Amc Amc's.
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.
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.
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 Amc Amc's.
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.
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.
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.
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 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. Amc Amc's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
Weighted SWOT Analysis of Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B) 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 (B) 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 (B) 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 (B) 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.
