L'Atelier Art Lounge: Times of Uncertainty SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of L'Atelier Art Lounge: Times of Uncertainty
On January 31, 2014, the founder and chief executive officer of L'Atelier Art Lounge, an art workshop with branches in Bahrain and Lebanon, faces numerous challenges: not only whether to grow the business but how to achieve a reasonable work-life balance. Political instability associated with the Arab Spring led her to close one of her shops in Bahrain, but she went ahead with opening a second in Beirut where there are few leisure activities available for children; her offering of educational entertainment has been welcomed by parents, schools and adults looking to revive a hobby or improve their skills. However, as a result of violence spilling over from Syria, many tourists are avoiding Lebanon and her store locations have experienced a dramatic decrease in customers. Now she has one day to decide whether to renew the lease of one of her outlets. This deadline represents an opportunity to consider her options for the future: should she focus on marketing her concept to increase the number of customers and consequently her bottom line, thus improving her cash flow; look for potential investors or apply for a bank loan; or close her least profitable location? Randa Salamoun is affiliated with American University of Beirut. Bettina Bastian is affiliated with American University of Beirut.
Swot Analysis of "L'Atelier Art Lounge: Times of Uncertainty" written by Randa Salamoun, Bettina Bastian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beirut L'atelier facing as an external strategic factors. Some of the topics covered in L'Atelier Art Lounge: Times of Uncertainty case study are - Strategic Management Strategies, Gender and Strategy & Execution.
Some of the macro environment factors that can be used to understand the L'Atelier Art Lounge: Times of Uncertainty casestudy better are - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of L'Atelier Art Lounge: Times of Uncertainty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in L'Atelier Art Lounge: Times of Uncertainty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beirut L'atelier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty can be done for the following purposes –
1. Strategic planning using facts provided in L'Atelier Art Lounge: Times of Uncertainty case study
2. Improving business portfolio management of Beirut L'atelier
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 Beirut L'atelier
Strengths L'Atelier Art Lounge: Times of Uncertainty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beirut L'atelier in L'Atelier Art Lounge: Times of Uncertainty Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Beirut L'atelier 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.
Highly skilled collaborators
– Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Beirut L'atelier has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beirut L'atelier 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.
Low bargaining power of suppliers
– Suppliers of Beirut L'atelier in the sector have low bargaining power. L'Atelier Art Lounge: Times of Uncertainty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beirut L'atelier to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Beirut L'atelier in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the L'Atelier Art Lounge: Times of Uncertainty 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.
Effective Research and Development (R&D)
– Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Beirut L'atelier has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beirut L'atelier to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Beirut L'atelier 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.
Strong track record of project management
– Beirut L'atelier is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Beirut L'atelier is one of the leading recruiters in the industry. Managers in the L'Atelier Art Lounge: Times of Uncertainty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Beirut L'atelier 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 Randa Salamoun, Bettina Bastian 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.
Weaknesses L'Atelier Art Lounge: Times of Uncertainty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of L'Atelier Art Lounge: Times of Uncertainty are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beirut L'atelier is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study L'Atelier Art Lounge: Times of Uncertainty can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study L'Atelier Art Lounge: Times of Uncertainty 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 Beirut L'atelier 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Beirut L'atelier 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.
Need for greater diversity
– Beirut L'atelier has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Workers concerns about automation
– As automation is fast increasing in the segment, Beirut L'atelier 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Beirut L'atelier supply chain. Even after few cautionary changes mentioned in the HBR case study - L'Atelier Art Lounge: Times of Uncertainty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beirut L'atelier vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Beirut L'atelier 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the L'Atelier Art Lounge: Times of Uncertainty 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 Beirut L'atelier has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Randa Salamoun, Bettina Bastian suggests that, Beirut L'atelier 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.
Aligning sales with marketing
– It come across in the case study L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty can leverage the sales team experience to cultivate customer relationships as Beirut L'atelier is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As L'Atelier Art Lounge: Times of Uncertainty HBR case study mentions - Beirut L'atelier 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.
Opportunities L'Atelier Art Lounge: Times of Uncertainty | 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 L'Atelier Art Lounge: Times of Uncertainty are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Beirut L'atelier 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.
Developing new processes and practices
– Beirut L'atelier 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.
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. Beirut L'atelier 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. Beirut L'atelier 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.
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 Beirut L'atelier in the consumer business. Now Beirut L'atelier can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Beirut L'atelier can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. L'Atelier Art Lounge: Times of Uncertainty 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.
Loyalty marketing
– Beirut L'atelier 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.
Manufacturing automation
– Beirut L'atelier 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.
Using analytics as competitive advantage
– Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beirut L'atelier to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beirut L'atelier can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Beirut L'atelier to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Beirut L'atelier can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Beirut L'atelier has opened avenues for new revenue streams for the organization in the industry. This can help Beirut L'atelier to build a more holistic ecosystem as suggested in the L'Atelier Art Lounge: Times of Uncertainty case study. Beirut L'atelier can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beirut L'atelier can use these opportunities to build new business models that can help the communities that Beirut L'atelier operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats L'Atelier Art Lounge: Times of Uncertainty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study L'Atelier Art Lounge: Times of Uncertainty are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beirut L'atelier 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 L'Atelier Art Lounge: Times of Uncertainty .
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.
Increasing wage structure of Beirut L'atelier
– 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 Beirut L'atelier.
Stagnating economy with rate increase
– Beirut L'atelier 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.
Environmental challenges
– Beirut L'atelier 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. Beirut L'atelier can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Beirut L'atelier.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study L'Atelier Art Lounge: Times of Uncertainty, Beirut L'atelier 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. Beirut L'atelier 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.
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.
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 Beirut L'atelier in the Strategy & Execution sector and impact the bottomline of the organization.
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. Beirut L'atelier needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Beirut L'atelier has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Beirut L'atelier 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beirut L'atelier 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.
Weighted SWOT Analysis of L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 L'Atelier Art Lounge: Times of Uncertainty 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 Beirut L'atelier needs to make to build a sustainable competitive advantage.
