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 - – cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, 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 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.
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.
Strong track record of project management
– Cannabis Privateer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Cannabis Privateer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Cannabis Privateer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cannabis Privateer 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.
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.
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.
Training and development
– Cannabis Privateer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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.
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.
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.
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.
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 -
Aligning sales with marketing
– It come across in the case study Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace can leverage the sales team experience to cultivate customer relationships as Cannabis Privateer is planning to shift buying processes online.
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.
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.
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.
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.
Lack of clear differentiation of Cannabis Privateer products
– To increase the profitability and margins on the products, Cannabis Privateer needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Products dominated business model
– Even though Cannabis Privateer has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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 -
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 Cannabis Privateer 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.
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.
Manufacturing automation
– Cannabis Privateer can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Cannabis Privateer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Leveraging digital technologies
– Cannabis Privateer 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cannabis Privateer 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, Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Using analytics as competitive advantage
– Cannabis Privateer 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 Privateer Holdings: Navigating a Rocketing, But Complex, Cannabis Marketplace - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cannabis Privateer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cannabis Privateer in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
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.
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. Cannabis Privateer 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.
Technology acceleration in Forth Industrial Revolution
– Cannabis Privateer has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Cannabis Privateer needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cannabis Privateer business can come under increasing regulations regarding data privacy, data security, etc.
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.
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
– 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 .
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.
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.
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.