Amango Project: Taking Online DVD Rental to Germany SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Amango Project: Taking Online DVD Rental to Germany
Describes an innovative approach to online DVD rental pioneered by Netflix in a sector hampered by short life-cycle products (movies). The industry has a supply chain that is prone to misaligned incentives between echelons, resulting in product shortages and poor customer satisfaction. Amango hopes to import to Germany this business concept pioneered by Netflix. To be able to do so, the company must copy Netflix's operating system and manage to solve its working capital problem.
Swot Analysis of "Amango Project: Taking Online DVD Rental to Germany" written by Marc Sachon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amango Netflix facing as an external strategic factors. Some of the topics covered in Amango Project: Taking Online DVD Rental to Germany case study are - Strategic Management Strategies, Research & development, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Amango Project: Taking Online DVD Rental to Germany casestudy better are - – increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Amango Project: Taking Online DVD Rental to Germany
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amango Project: Taking Online DVD Rental to Germany case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amango Netflix, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amango Netflix 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 Amango Project: Taking Online DVD Rental to Germany can be done for the following purposes –
1. Strategic planning using facts provided in Amango Project: Taking Online DVD Rental to Germany case study
2. Improving business portfolio management of Amango Netflix
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Amango Netflix
Strengths Amango Project: Taking Online DVD Rental to Germany | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amango Netflix in Amango Project: Taking Online DVD Rental to Germany Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Amango Netflix 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.
Organizational Resilience of Amango Netflix
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amango Netflix does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Amango Netflix digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amango Netflix 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.
Strong track record of project management
– Amango Netflix is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Amango Netflix 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 Marc Sachon 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.
Low bargaining power of suppliers
– Suppliers of Amango Netflix in the sector have low bargaining power. Amango Project: Taking Online DVD Rental to Germany has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amango Netflix to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Amango Netflix 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.
High brand equity
– Amango Netflix has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amango Netflix to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Amango Project: Taking Online DVD Rental to Germany 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.
Training and development
– Amango Netflix has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amango Project: Taking Online DVD Rental to Germany 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.
Highly skilled collaborators
– Amango Netflix 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 Amango Project: Taking Online DVD Rental to Germany HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Amango Project: Taking Online DVD Rental to Germany firm has clearly differentiated products in the market place. This has enabled Amango Netflix to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Amango Netflix to invest into research and development (R&D) and innovation.
Weaknesses Amango Project: Taking Online DVD Rental to Germany | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amango Project: Taking Online DVD Rental to Germany are -
Skills based hiring
– The stress on hiring functional specialists at Amango Netflix 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Amango Project: Taking Online DVD Rental to Germany, in the dynamic environment Amango Netflix has struggled to respond to the nimble upstart competition. Amango Netflix has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Amango Netflix 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. Amango Netflix even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High 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 Amango Netflix supply chain. Even after few cautionary changes mentioned in the HBR case study - Amango Project: Taking Online DVD Rental to Germany, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amango Netflix vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Amango Project: Taking Online DVD Rental to Germany HBR case study mentions - Amango Netflix 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, Marc Sachon suggests that, Amango Netflix 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Amango Netflix is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Amango Project: Taking Online DVD Rental to Germany can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Amango Netflix 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.
Interest costs
– Compare to the competition, Amango Netflix 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.
Low market penetration in new markets
– Outside its home market of Amango Netflix, firm in the HBR case study Amango Project: Taking Online DVD Rental to Germany needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amango Project: Taking Online DVD Rental to Germany, it seems that the employees of Amango Netflix 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 Amango Project: Taking Online DVD Rental to Germany | 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 Amango Project: Taking Online DVD Rental to Germany are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amango Netflix can use these opportunities to build new business models that can help the communities that Amango Netflix operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amango Netflix in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amango Netflix 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, Amango Project: Taking Online DVD Rental to Germany, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amango Netflix is facing challenges because of the dominance of functional experts in the organization. Amango Project: Taking Online DVD Rental to Germany 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.
Leveraging digital technologies
– Amango Netflix 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.
Using analytics as competitive advantage
– Amango Netflix 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 Amango Project: Taking Online DVD Rental to Germany - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amango Netflix to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Amango Netflix 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 Technology & Operations segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amango Netflix 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 Amango Netflix to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Amango Netflix 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Amango Netflix can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Amango Netflix in the consumer business. Now Amango Netflix can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Amango Netflix 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.
Creating value in data economy
– The success of analytics program of Amango Netflix has opened avenues for new revenue streams for the organization in the industry. This can help Amango Netflix to build a more holistic ecosystem as suggested in the Amango Project: Taking Online DVD Rental to Germany case study. Amango Netflix can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Amango Project: Taking Online DVD Rental to Germany External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amango Project: Taking Online DVD Rental to Germany are -
Consumer confidence and its impact on Amango Netflix demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Amango Netflix 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amango Netflix 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 Amango Project: Taking Online DVD Rental to Germany .
Increasing wage structure of Amango Netflix
– 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 Amango Netflix.
Shortening product life cycle
– it is one of the major threat that Amango Netflix is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Amango Netflix in the Technology & Operations sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Amango Netflix has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Amango Netflix needs to keep up with the evolution of technology in the Technology & Operations 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. Amango Netflix needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Amango Netflix 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 Technology & Operations industry regulations.
Stagnating economy with rate increase
– Amango Netflix 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amango Netflix with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Amango Netflix.
Weighted SWOT Analysis of Amango Project: Taking Online DVD Rental to Germany 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 Amango Project: Taking Online DVD Rental to Germany 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 Amango Project: Taking Online DVD Rental to Germany 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 Amango Project: Taking Online DVD Rental to Germany 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 Amango Project: Taking Online DVD Rental to Germany 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 Amango Netflix needs to make to build a sustainable competitive advantage.
