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 - – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
wage bills are increasing, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
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.
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.
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.
Organizational Resilience of Amc Amc's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amc Amc's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Superior customer experience
– The customer experience strategy of Amc Amc's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Amc Amc's in the sector have low bargaining power. Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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.
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.
High switching costs
– The high switching costs that Amc Amc's 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.
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 -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dalian Wanda Group: The AMC Entertainment Acquisition (B), in the dynamic environment Amc Amc's has struggled to respond to the nimble upstart competition. Amc Amc's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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.
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 (B) 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 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.
Products dominated business model
– Even though Amc Amc's 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 - Dalian Wanda Group: The AMC Entertainment Acquisition (B) should strive to include more intangible value offerings along with its core products and services.
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 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.
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.
Aligning sales with marketing
– It come across in the case study Dalian Wanda Group: The AMC Entertainment Acquisition (B) 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 (B) can leverage the sales team experience to cultivate customer relationships as Amc Amc's is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Dalian Wanda Group: The AMC Entertainment Acquisition (B) HBR case study mentions - Amc Amc's 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.
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.
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 -
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.
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.
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 Amc Amc's 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.
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.
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.
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.
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.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amc Amc's 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 Amc Amc's to hire the very best people irrespective of their geographical location.
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.
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 -
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.
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.
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.
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 .
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.
Environmental challenges
– Amc Amc's 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. Amc Amc's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
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.
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.
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 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.