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 - – technology disruption, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing transportation and logistics costs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, 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 -
Learning organization
- Perna Arts 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 Perna Arts is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Perna Arts: Managing the Complexity of Creativity and Commerce Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Perna Arts: Managing the Complexity of Creativity and Commerce Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
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.
Effective Research and Development (R&D)
– Perna Arts 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 Perna Arts: Managing the Complexity of Creativity and Commerce - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Perna Arts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Perna Arts 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.
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.
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.
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.
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 -
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.
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 operating costs
– Compare to the competitors, firm in the HBR case study Perna Arts: Managing the Complexity of Creativity and Commerce 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 Perna Arts 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Perna Arts: Managing the Complexity of Creativity and Commerce, in the dynamic environment Perna Arts has struggled to respond to the nimble upstart competition. Perna Arts has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Perna Arts is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Perna Arts: Managing the Complexity of Creativity and Commerce can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Need for greater diversity
– Perna Arts 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.
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.
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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Perna Arts is facing challenges because of the dominance of functional experts in the organization. Perna Arts: Managing the Complexity of Creativity and Commerce 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.
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.
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.
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.
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. Perna Arts can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Perna Arts 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 Perna Arts to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Perna Arts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Perna Arts: Managing the Complexity of Creativity and Commerce suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Perna Arts can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Perna Arts has opened avenues for new revenue streams for the organization in the industry. This can help Perna Arts to build a more holistic ecosystem as suggested in the Perna Arts: Managing the Complexity of Creativity and Commerce case study. Perna Arts can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Building a culture of innovation
– managers at Perna Arts 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.
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.
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.
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 -
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 .
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 .
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.
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.
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.
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.
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.
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 Perna Arts.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Perna Arts is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.