Perna Arts: Managing the Complexity of Creativity and Commerce SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Perna Arts: Managing the Complexity of Creativity and Commerce
Perna Arts is a movie production company that has gradually branched into related businesses straddling distribution, exhibition, programming and education. The company was among the first to go public after the movie business attained industry status in India. It was also one of the first to recruit a professional manager as its chief executive officer to put in place processes, systems, performance metrics and procedures aligned to its strategic priorities. The company's aim was to make two to four movies a year - enough to create a rolling stock that could open up multiple revenue streams and offset losses with hits. However, Perna Arts was battling against temporary setbacks, such as failing to deliver hit movies. The company's management wondered whether it could adopt a more business-like approach to movie making, using sound management principles to wean Perna Arts away from its person-centric, intuitive process. Kajari Mukherjee is affiliated with INDIAN INSTITUTE OF MANAGEMENT INDORE.
Swot Analysis of "Perna Arts: Managing the Complexity of Creativity and Commerce" written by Kajari Mukherjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Perna Arts facing as an external strategic factors. Some of the topics covered in Perna Arts: Managing the Complexity of Creativity and Commerce case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Perna Arts: Managing the Complexity of Creativity and Commerce casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , geopolitical disruptions, wage bills are increasing, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Perna Arts: Managing the Complexity of Creativity and Commerce
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Perna Arts: Managing the Complexity of Creativity and Commerce case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Perna Arts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce can be done for the following purposes –
1. Strategic planning using facts provided in Perna Arts: Managing the Complexity of Creativity and Commerce case study
2. Improving business portfolio management of Perna Arts
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 Perna Arts
Strengths Perna Arts: Managing the Complexity of Creativity and Commerce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Perna Arts in Perna Arts: Managing the Complexity of Creativity and Commerce Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Perna Arts in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Perna Arts are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Perna Arts is present in almost all the verticals within the industry. This has provided firm in Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts in the sector have low bargaining power. Perna Arts: Managing the Complexity of Creativity and Commerce has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Perna Arts to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Perna Arts has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Perna Arts: Managing the Complexity of Creativity and Commerce 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Perna Arts: Managing the Complexity of Creativity and Commerce firm has clearly differentiated products in the market place. This has enabled Perna Arts to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Perna Arts to invest into research and development (R&D) and innovation.
Innovation driven organization
– Perna Arts is one of the most innovative firm in sector. Manager in Perna Arts: Managing the Complexity of Creativity and Commerce Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Perna Arts 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.
Ability to lead change in Strategy & Execution field
– Perna Arts 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 Perna Arts in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Perna Arts has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Perna Arts 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.
Organizational Resilience of Perna Arts
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Perna Arts does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Perna Arts: Managing the Complexity of Creativity and Commerce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Perna Arts: Managing the Complexity of Creativity and Commerce are -
High cash cycle compare to competitors
Perna Arts 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.
Interest costs
– Compare to the competition, Perna Arts 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.
Increasing silos among functional specialists
– The organizational structure of Perna Arts is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Perna Arts needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Perna Arts to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Perna Arts 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.
Slow to strategic competitive environment developments
– As Perna Arts: Managing the Complexity of Creativity and Commerce HBR case study mentions - Perna Arts 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kajari Mukherjee suggests that, Perna Arts 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.
Slow decision making process
– As mentioned earlier in the report, Perna Arts 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. Perna Arts 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.
Aligning sales with marketing
– It come across in the case study Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts: Managing the Complexity of Creativity and Commerce can leverage the sales team experience to cultivate customer relationships as Perna Arts is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Perna Arts: Managing the Complexity of Creativity and Commerce, is just above the industry average. Perna Arts needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Perna Arts 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Perna Arts: Managing the Complexity of Creativity and Commerce, it seems that the employees of Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce | 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 Perna Arts: Managing the Complexity of Creativity and Commerce are -
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. Perna Arts 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. Perna Arts 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Perna Arts 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Perna Arts can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Perna Arts in the consumer business. Now Perna Arts can target international markets with far fewer capital restrictions requirements than the existing system.
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 Perna Arts 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Perna Arts 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.
Loyalty marketing
– Perna Arts 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.
Better consumer reach
– The expansion of the 5G network will help Perna Arts to increase its market reach. Perna Arts 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Perna Arts can use these opportunities to build new business models that can help the communities that Perna Arts operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Perna Arts 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
– Perna Arts 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.
Manufacturing automation
– Perna Arts 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Perna Arts 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, Perna Arts: Managing the Complexity of Creativity and Commerce, 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 Perna Arts: Managing the Complexity of Creativity and Commerce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Perna Arts: Managing the Complexity of Creativity and Commerce are -
Increasing wage structure of Perna Arts
– 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 Perna Arts.
Consumer confidence and its impact on Perna Arts 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce .
High dependence on third party suppliers
– Perna Arts 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Perna Arts 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Perna Arts 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.
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.
Stagnating economy with rate increase
– Perna Arts 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 Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce, Perna Arts 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 .
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. Perna Arts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Perna Arts has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Perna Arts 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.
Weighted SWOT Analysis of Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts needs to make to build a sustainable competitive advantage.
