Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n
Founded in 1945, Grupo ClarA?n expanded over several decades to become Argentina's largest media conglomerate. With leading positions in newspapers, broadcast television, broadcast radio, cable television, and Internet services, Grupo ClarA?n caught the attention of U.S.-based investment bank Goldman Sachs, which acquired an 18% share of Grupo ClarA?n for US$500 million in 1999. While Grupo ClarA?n struggled during the economic crisis from 2001 to 2002, it was well positioned to grow as the economy began to recover in 2003, in part due to government policies that helped stabilize the media industry. Now in October 2007, Grupo ClarA?n was preparing to make an IPO in London and Buenos Aires, and fund managers at Goldman Sachs were reevaluating their position. What price would the IPO reach and how much, if any, of their stake should they sell? What was the return Goldman Sachs would obtain if they sold its entire position, or just one part?
Authors :: Rafael Di Tella, Jose Liberti, Sarah McAra
Swot Analysis of "Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n" written by Rafael Di Tella, Jose Liberti, Sarah McAra includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Clara?n Grupo facing as an external strategic factors. Some of the topics covered in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n case study are - Strategic Management Strategies, Government, IPO, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n casestudy better are - – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, technology disruption, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clara?n Grupo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clara?n Grupo 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n can be done for the following purposes –
1. Strategic planning using facts provided in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n case study
2. Improving business portfolio management of Clara?n Grupo
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Clara?n Grupo
Strengths Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clara?n Grupo in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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.
Organizational Resilience of Clara?n Grupo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Clara?n Grupo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Clara?n Grupo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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.
High brand equity
– Clara?n Grupo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Clara?n Grupo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Clara?n Grupo in the sector have low bargaining power. Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clara?n Grupo to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Clara?n Grupo is one of the most innovative firm in sector. Manager in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Clara?n Grupo 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
– Clara?n Grupo is present in almost all the verticals within the industry. This has provided firm in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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.
Analytics focus
– Clara?n Grupo 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 Rafael Di Tella, Jose Liberti, Sarah McAra 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.
Learning organization
- Clara?n Grupo 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 Clara?n Grupo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Clara?n Grupo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Clara?n Grupo 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n are -
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 Clara?n Grupo supply chain. Even after few cautionary changes mentioned in the HBR case study - Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Clara?n Grupo vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Clara?n Grupo has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Clara?n Grupo 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Clara?n Grupo has relatively successful track record of launching new products.
Need for greater diversity
– Clara?n Grupo 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
Clara?n Grupo 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.
Aligning sales with marketing
– It come across in the case study Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n can leverage the sales team experience to cultivate customer relationships as Clara?n Grupo is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n HBR case study mentions - Clara?n Grupo 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.
Increasing silos among functional specialists
– The organizational structure of Clara?n Grupo is dominated by functional specialists. It is not different from other players in the Global Business segment. Clara?n Grupo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Clara?n Grupo to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Clara?n Grupo 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n, it seems that the employees of Clara?n Grupo 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n | 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Clara?n Grupo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Clara?n Grupo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Clara?n Grupo 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 Global Business segment.
Leveraging digital technologies
– Clara?n Grupo 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.
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 Clara?n Grupo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Clara?n Grupo can use these opportunities to build new business models that can help the communities that Clara?n Grupo operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Clara?n Grupo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Clara?n Grupo can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Clara?n Grupo 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. Clara?n Grupo 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.
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. Clara?n Grupo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Clara?n Grupo to increase its market reach. Clara?n Grupo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Clara?n Grupo 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 Clara?n Grupo to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Clara?n Grupo has opened avenues for new revenue streams for the organization in the industry. This can help Clara?n Grupo to build a more holistic ecosystem as suggested in the Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n case study. Clara?n Grupo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n are -
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.
Shortening product life cycle
– it is one of the major threat that Clara?n Grupo is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clara?n Grupo in the Global Business industry. The Global Business 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.
Increasing wage structure of Clara?n Grupo
– 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 Clara?n Grupo.
High dependence on third party suppliers
– Clara?n Grupo 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.
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. Clara?n Grupo 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.
Regulatory challenges
– Clara?n Grupo 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 Global Business industry regulations.
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 Clara?n Grupo.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Clara?n Grupo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Clara?n Grupo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n, Clara?n Grupo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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. Clara?n Grupo needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Clara?n Grupo 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.
Weighted SWOT Analysis of Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Media Markets Down South: Goldman Sachs' Investment in Grupo ClarA?n 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 Clara?n Grupo needs to make to build a sustainable competitive advantage.