Case Study Description of Jason Blum's Blumhouse Productions
In March 2017, Jason Blum, the founder and chief executive officer of film and television production company Blumhouse Productions, has another blockbuster on his hands with the movie Get Out, produced for just $4.5 million. Remarkable returns for its micro-budget films were nothing new for Blumhouse: in fact, in recent years, Blum and his team are responsible for more such outsized successes than any other producer, especially in the horror genre. The company's approach to movie-making is quite different from that of the major studios: it is not afraid to bet on projects that other studios have passed on; it pays its key cast and crew members the minimum salary stipulated by industry unions and only pays out sizeable bonuses if a movie's box-office reaches certain levels; it gives its directors a great deal of creative control; and it decides on a film's release strategy only once the first cut is ready. Has Blum discovered a robust formula for success in the film business? And is his approach sustainable, even as other players in Hollywood might seek to copy Blumhouse's strategy?
Swot Analysis of "Jason Blum's Blumhouse Productions" written by Anita Elberse includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Blum Blumhouse facing as an external strategic factors. Some of the topics covered in Jason Blum's Blumhouse Productions case study are - Strategic Management Strategies, Marketing, Research & development, Strategy, Talent management and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Jason Blum's Blumhouse Productions casestudy better are - – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Jason Blum's Blumhouse Productions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Jason Blum's Blumhouse Productions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Blum Blumhouse, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Blum Blumhouse 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 Jason Blum's Blumhouse Productions can be done for the following purposes –
1. Strategic planning using facts provided in Jason Blum's Blumhouse Productions case study
2. Improving business portfolio management of Blum Blumhouse
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Blum Blumhouse
Strengths Jason Blum's Blumhouse Productions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Blum Blumhouse in Jason Blum's Blumhouse Productions Harvard Business Review case study are -
Training and development
– Blum Blumhouse has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Jason Blum's Blumhouse Productions 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.
Innovation driven organization
– Blum Blumhouse is one of the most innovative firm in sector. Manager in Jason Blum's Blumhouse Productions Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Blum Blumhouse 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 Anita Elberse 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
- Blum Blumhouse 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 Blum Blumhouse is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Jason Blum's Blumhouse Productions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Blum Blumhouse 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 Jason Blum's Blumhouse Productions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Blum Blumhouse in the sector have low bargaining power. Jason Blum's Blumhouse Productions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Blum Blumhouse to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Blum Blumhouse is present in almost all the verticals within the industry. This has provided firm in Jason Blum's Blumhouse Productions 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.
High brand equity
– Blum Blumhouse has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Blum Blumhouse to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Blum Blumhouse 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 Jason Blum's Blumhouse Productions HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Blum Blumhouse 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.
Successful track record of launching new products
– Blum Blumhouse has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Blum Blumhouse 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.
Superior customer experience
– The customer experience strategy of Blum Blumhouse in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Jason Blum's Blumhouse Productions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jason Blum's Blumhouse Productions are -
Slow decision making process
– As mentioned earlier in the report, Blum Blumhouse 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. Blum Blumhouse 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Jason Blum's Blumhouse Productions, in the dynamic environment Blum Blumhouse has struggled to respond to the nimble upstart competition. Blum Blumhouse has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Blum Blumhouse is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Jason Blum's Blumhouse Productions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Jason Blum's Blumhouse Productions, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Blum Blumhouse products
– To increase the profitability and margins on the products, Blum Blumhouse needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Blum Blumhouse, firm in the HBR case study Jason Blum's Blumhouse Productions 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 Jason Blum's Blumhouse Productions, it seems that the employees of Blum Blumhouse 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.
Slow to strategic competitive environment developments
– As Jason Blum's Blumhouse Productions HBR case study mentions - Blum Blumhouse 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 Blum Blumhouse is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Blum Blumhouse needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Blum Blumhouse to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Blum Blumhouse has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Anita Elberse suggests that, Blum Blumhouse 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.
Opportunities Jason Blum's Blumhouse Productions | 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 Jason Blum's Blumhouse Productions are -
Creating value in data economy
– The success of analytics program of Blum Blumhouse has opened avenues for new revenue streams for the organization in the industry. This can help Blum Blumhouse to build a more holistic ecosystem as suggested in the Jason Blum's Blumhouse Productions case study. Blum Blumhouse can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Blum Blumhouse 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Blum Blumhouse 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, Jason Blum's Blumhouse Productions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Blum Blumhouse 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 Jason Blum's Blumhouse Productions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Blum Blumhouse to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Blum Blumhouse to increase its market reach. Blum Blumhouse 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.
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. Blum Blumhouse can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Blum Blumhouse can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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 Blum Blumhouse in the consumer business. Now Blum Blumhouse can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Blum Blumhouse is facing challenges because of the dominance of functional experts in the organization. Jason Blum's Blumhouse Productions 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Blum Blumhouse in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Buying journey improvements
– Blum Blumhouse can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Jason Blum's Blumhouse Productions 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Blum Blumhouse 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 Blum Blumhouse to hire the very best people irrespective of their geographical location.
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 Blum Blumhouse 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.
Threats Jason Blum's Blumhouse Productions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Jason Blum's Blumhouse Productions are -
Stagnating economy with rate increase
– Blum Blumhouse 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.
Consumer confidence and its impact on Blum Blumhouse 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.
Shortening product life cycle
– it is one of the major threat that Blum Blumhouse is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Blum Blumhouse.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Jason Blum's Blumhouse Productions, Blum Blumhouse may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing wage structure of Blum Blumhouse
– 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 Blum Blumhouse.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Blum Blumhouse can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Blum Blumhouse business can come under increasing regulations regarding data privacy, data security, etc.
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. Blum Blumhouse 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, Blum Blumhouse 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 Jason Blum's Blumhouse Productions .
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 Blum Blumhouse in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Blum Blumhouse 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.
Weighted SWOT Analysis of Jason Blum's Blumhouse Productions 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 Jason Blum's Blumhouse Productions 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 Jason Blum's Blumhouse Productions 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 Jason Blum's Blumhouse Productions 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 Jason Blum's Blumhouse Productions 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 Blum Blumhouse needs to make to build a sustainable competitive advantage.
