Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace
Privateer Holdings was a Seattle-based private equity firm that was "shaping the future of the legal cannabis industry." In late 2017, Privateer held an expanding portfolio of global brands intended to "lead, legitimize, and define the future of cannabis" and was preparing to announce the closure of a Series C round that had raised more than $100 million. It was an opportune moment for its founding triumvirate to contemplate the future direction of the path-breaking firm they had established back in 2010 and the global companies they had built, through a combination of acquisitions, investments, and incubation, and in which they held 100 percent ownership. Privateer's founders had committed to hold true three core beliefs which formed their fundamental investment thesis: -"cannabis is a mainstream product consumed by mainstream people; -the end of cannabis prohibition is inevitable; -brands will determine the future of the cannabis industry." But, as market velocity and opportunities expanded with ever-increasing speed, it seemed the right time to consider how best to steer, and structure, Privateer Holdings going forward. While the potential growth options were many, there was much uncertainty as to many factors that could impact the cannabis industry.
Swot Analysis of "Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace" written by George Foster, Sheila Melvin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cannabis Privateer facing as an external strategic factors. Some of the topics covered in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace case study are - Strategic Management Strategies, Regulation, Risk management, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace casestudy better are - – increasing transportation and logistics costs, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cannabis Privateer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cannabis Privateer 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace can be done for the following purposes –
1. Strategic planning using facts provided in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace case study
2. Improving business portfolio management of Cannabis Privateer
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cannabis Privateer
Strengths Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cannabis Privateer in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace Harvard Business Review case study are -
High brand equity
– Cannabis Privateer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cannabis Privateer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Cannabis Privateer has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cannabis Privateer 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.
Cross disciplinary teams
– Horizontal connected teams at the Cannabis Privateer 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.
Learning organization
- Cannabis Privateer 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 Cannabis Privateer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace firm has clearly differentiated products in the market place. This has enabled Cannabis Privateer to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Cannabis Privateer to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Cannabis Privateer is present in almost all the verticals within the industry. This has provided firm in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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.
Innovation driven organization
– Cannabis Privateer is one of the most innovative firm in sector. Manager in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Cannabis Privateer 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.
Low bargaining power of suppliers
– Suppliers of Cannabis Privateer in the sector have low bargaining power. Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cannabis Privateer to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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.
Analytics focus
– Cannabis Privateer 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 George Foster, Sheila Melvin 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.
Ability to lead change in Innovation & Entrepreneurship field
– Cannabis Privateer is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cannabis Privateer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace are -
Increasing silos among functional specialists
– The organizational structure of Cannabis Privateer is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Cannabis Privateer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cannabis Privateer to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Cannabis Privateer 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.
Interest costs
– Compare to the competition, Cannabis Privateer 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.
Slow to strategic competitive environment developments
– As Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace HBR case study mentions - Cannabis Privateer 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.
Capital Spending Reduction
– Even during the low interest decade, Cannabis Privateer 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Cannabis Privateer has relatively successful track record of launching new products.
High cash cycle compare to competitors
Cannabis Privateer 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace, is just above the industry average. Cannabis Privateer 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace, in the dynamic environment Cannabis Privateer has struggled to respond to the nimble upstart competition. Cannabis Privateer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Cannabis Privateer, firm in the HBR case study Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Cannabis Privateer 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.
Opportunities Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace | 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace are -
Learning at scale
– Online learning technologies has now opened space for Cannabis Privateer 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.
Developing new processes and practices
– Cannabis Privateer can develop new processes and procedures in Innovation & Entrepreneurship 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.
Creating value in data economy
– The success of analytics program of Cannabis Privateer has opened avenues for new revenue streams for the organization in the industry. This can help Cannabis Privateer to build a more holistic ecosystem as suggested in the Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace case study. Cannabis Privateer can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Cannabis Privateer can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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
– Cannabis Privateer 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.
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 Cannabis Privateer in the consumer business. Now Cannabis Privateer can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Cannabis Privateer 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 Innovation & Entrepreneurship segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cannabis Privateer can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cannabis Privateer is facing challenges because of the dominance of functional experts in the organization. Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cannabis Privateer 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. Cannabis Privateer 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.
Better consumer reach
– The expansion of the 5G network will help Cannabis Privateer to increase its market reach. Cannabis Privateer 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 Cannabis Privateer 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 Cannabis Privateer to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Cannabis Privateer can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace are -
Increasing wage structure of Cannabis Privateer
– 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 Cannabis Privateer.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace, Cannabis Privateer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Shortening product life cycle
– it is one of the major threat that Cannabis Privateer is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cannabis Privateer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cannabis Privateer in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
High dependence on third party suppliers
– Cannabis Privateer 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.
Stagnating economy with rate increase
– Cannabis Privateer 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.
Regulatory challenges
– Cannabis Privateer 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 Innovation & Entrepreneurship industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cannabis Privateer 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace .
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. Cannabis Privateer needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cannabis Privateer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Cannabis Privateer.
Environmental challenges
– Cannabis Privateer 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. Cannabis Privateer can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Cannabis Privateer needs to make to build a sustainable competitive advantage.
