The American Repertory Theater SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of The American Repertory Theater
When Diane Paulus, artistic director and CEO of the American Repertory Theater (A.R.T. - also seen spelled as American Repertory Theatre) first started in 2008, she attracted media coverage around an aesthetic that aimed to give the audience more ownership over the theater experience, excited theatergoers by experimenting with new venues and received critical recognition for the breadth and range of the work she staged. Paulus also recognized the changing realities in theater, which included dropping subscription numbers and an increase in single ticket buyers. Paulus, inspired by the mission of the A.R.T. - to expand the boundaries of theater - hastened a shift in the A.R.T. business model. Her new plans included operating two unique segmented venues, creating and presenting varied content that aimed to be both challenging and popular, and driving a sales and marketing campaign focused on single ticket buyers, memberships and dynamic pricing. Early results showed some promise; the A.R.T. was closer to break-even than in previous years. However, some questioned if the A.R.T. was beginning to look like a commercial theater, focused on presenting theater that sold, rather than truly expanding boundaries. Despite the questioning, Paulus remained committed to fulfilling her vision of the A.R.T. mission in order to solidify A.R.T. as a leading and financially stable not-for-profit regional theater.
Authors :: Rohit Deshpande, Allen S. Grossman, Ryan Johnson
Swot Analysis of "The American Repertory Theater" written by Rohit Deshpande, Allen S. Grossman, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A.r.t Theater facing as an external strategic factors. Some of the topics covered in The American Repertory Theater case study are - Strategic Management Strategies, Change management, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The American Repertory Theater casestudy better are - – wage bills are increasing, geopolitical disruptions, cloud computing is disrupting traditional business models, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The American Repertory Theater
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The American Repertory Theater case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A.r.t Theater, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A.r.t Theater operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The American Repertory Theater can be done for the following purposes –
1. Strategic planning using facts provided in The American Repertory Theater case study
2. Improving business portfolio management of A.r.t Theater
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of A.r.t Theater
Strengths The American Repertory Theater | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A.r.t Theater in The American Repertory Theater Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of A.r.t Theater in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– A.r.t Theater is one of the leading recruiters in the industry. Managers in the The American Repertory Theater are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– A.r.t Theater is present in almost all the verticals within the industry. This has provided firm in The American Repertory Theater case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of A.r.t Theater in the sector have low bargaining power. The American Repertory Theater has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A.r.t Theater to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– A.r.t Theater is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled A.r.t Theater in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– A.r.t Theater has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The American Repertory Theater Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– A.r.t Theater 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 Rohit Deshpande, Allen S. Grossman, Ryan Johnson 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.
Strong track record of project management
– A.r.t Theater is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that A.r.t Theater has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– A.r.t Theater has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The American Repertory Theater HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of A.r.t Theater
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A.r.t Theater does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- A.r.t Theater 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 A.r.t Theater is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The American Repertory Theater Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses The American Repertory Theater | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The American Repertory Theater are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The American Repertory Theater HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though A.r.t Theater has relatively successful track record of launching new products.
High cash cycle compare to competitors
A.r.t Theater 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.
Need for greater diversity
– A.r.t Theater has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, A.r.t Theater 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. A.r.t Theater 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.
Products dominated business model
– Even though A.r.t Theater has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The American Repertory Theater should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The American Repertory Theater, it seems that the employees of A.r.t Theater don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, A.r.t Theater has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study The American Repertory Theater, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, A.r.t Theater 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 operating costs
– Compare to the competitors, firm in the HBR case study The American Repertory Theater 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 A.r.t Theater 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, A.r.t Theater has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities The American Repertory Theater | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The American Repertory Theater are -
Loyalty marketing
– A.r.t Theater has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– A.r.t Theater 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 The American Repertory Theater - to build a competitive advantage using analytics. The analytics driven competitive advantage can help A.r.t Theater to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– A.r.t Theater 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 A.r.t Theater 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 A.r.t Theater to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for A.r.t Theater 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.
Manufacturing automation
– A.r.t Theater can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at A.r.t Theater 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, A.r.t Theater can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 A.r.t Theater 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.
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. A.r.t Theater can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A.r.t Theater can use these opportunities to build new business models that can help the communities that A.r.t Theater operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help A.r.t Theater to increase its market reach. A.r.t Theater will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of A.r.t Theater has opened avenues for new revenue streams for the organization in the industry. This can help A.r.t Theater to build a more holistic ecosystem as suggested in the The American Repertory Theater case study. A.r.t Theater can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats The American Repertory Theater External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The American Repertory Theater are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of A.r.t Theater.
Consumer confidence and its impact on A.r.t Theater demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents A.r.t Theater with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of A.r.t Theater
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of A.r.t Theater.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for A.r.t Theater in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The American Repertory Theater, A.r.t Theater may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. A.r.t Theater will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that A.r.t Theater is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– A.r.t Theater has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, A.r.t Theater needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. A.r.t Theater needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– A.r.t Theater 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.
Regulatory challenges
– A.r.t Theater needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Weighted SWOT Analysis of The American Repertory Theater Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The American Repertory Theater needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The American Repertory Theater is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The American Repertory Theater is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The American Repertory Theater is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that A.r.t Theater needs to make to build a sustainable competitive advantage.