Patreon and Arts Funding SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Patreon and Arts Funding
In 2013, musician Jack Conte realized that he could not make a living by posting videos on YouTube. Although part of the ad revenues generated by videos are shared with the artist, the videos can be viewed free of charge, and the artist is paid very little. This situation is explained in the "Jack the musician" section of the case. This section has been slightly fictionalized (without changing the basic facts) to interest students, but the story told is consistent with the information used to build the case study. The "Jack the entrepreneur" section discusses the issue of funding musicians from Jack's perspective. In 2013, Jack created a crowdfunding platform to address this problem. Called Patreon, it allows artists to solicit donations directly from their fan base. The concept is simple: fans agree to pay a set amount, automatically charged to their credit card, for each piece of content published by the creator. In return, the fan (or patron) receives rewards according to the amount paid. In this second section of the case, the Patreon concept is explained in detail. Students must figure out the reasons for the platform's success and recommend marketing strategies to promote this concept to a larger audience.
Authors :: Loic Marchat, Danilo C. Dantas, Marcelo Vinhal Nepomuceno
Swot Analysis of "Patreon and Arts Funding" written by Loic Marchat, Danilo C. Dantas, Marcelo Vinhal Nepomuceno includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Patreon Jack facing as an external strategic factors. Some of the topics covered in Patreon and Arts Funding case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Patreon and Arts Funding casestudy better are - – wage bills are increasing, central banks are concerned over increasing inflation, geopolitical disruptions, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Patreon and Arts Funding
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Patreon and Arts Funding case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Patreon Jack, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Patreon Jack 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 Patreon and Arts Funding can be done for the following purposes –
1. Strategic planning using facts provided in Patreon and Arts Funding case study
2. Improving business portfolio management of Patreon Jack
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 Patreon Jack
Strengths Patreon and Arts Funding | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Patreon Jack in Patreon and Arts Funding Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Patreon Jack in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Sales & Marketing industry
– Patreon and Arts Funding firm has clearly differentiated products in the market place. This has enabled Patreon Jack to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Patreon Jack to invest into research and development (R&D) and innovation.
High brand equity
– Patreon Jack has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Patreon Jack to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Patreon Jack is one of the leading recruiters in the industry. Managers in the Patreon and Arts Funding are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Patreon and Arts Funding 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.
Innovation driven organization
– Patreon Jack is one of the most innovative firm in sector. Manager in Patreon and Arts Funding 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 Patreon Jack are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Patreon Jack
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Patreon Jack does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Patreon Jack has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Patreon and Arts Funding 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.
Diverse revenue streams
– Patreon Jack is present in almost all the verticals within the industry. This has provided firm in Patreon and Arts Funding 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.
Successful track record of launching new products
– Patreon Jack has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Patreon Jack 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.
Analytics focus
– Patreon Jack 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 Loic Marchat, Danilo C. Dantas, Marcelo Vinhal Nepomuceno 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.
Weaknesses Patreon and Arts Funding | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Patreon and Arts Funding are -
Lack of clear differentiation of Patreon Jack products
– To increase the profitability and margins on the products, Patreon Jack needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Patreon and Arts Funding, it seems that the employees of Patreon Jack 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Patreon Jack 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.
Skills based hiring
– The stress on hiring functional specialists at Patreon Jack 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.
Low market penetration in new markets
– Outside its home market of Patreon Jack, firm in the HBR case study Patreon and Arts Funding needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Patreon and Arts Funding, in the dynamic environment Patreon Jack has struggled to respond to the nimble upstart competition. Patreon Jack has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Patreon Jack is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Patreon Jack needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Patreon Jack to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Patreon Jack 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.
Aligning sales with marketing
– It come across in the case study Patreon and Arts Funding 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 Patreon and Arts Funding can leverage the sales team experience to cultivate customer relationships as Patreon Jack is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Patreon Jack is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Patreon and Arts Funding can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Patreon and Arts Funding 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 Patreon Jack 's lucrative customers.
Opportunities Patreon and Arts Funding | 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 Patreon and Arts Funding are -
Using analytics as competitive advantage
– Patreon Jack 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 Patreon and Arts Funding - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Patreon Jack to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Patreon Jack 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, Patreon and Arts Funding, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Patreon Jack in the consumer business. Now Patreon Jack can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Patreon Jack can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Patreon and Arts Funding 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Patreon Jack 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.
Manufacturing automation
– Patreon Jack 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.
Better consumer reach
– The expansion of the 5G network will help Patreon Jack to increase its market reach. Patreon Jack 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Patreon Jack is facing challenges because of the dominance of functional experts in the organization. Patreon and Arts Funding 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Patreon Jack 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 Patreon Jack to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Patreon Jack can develop new processes and procedures in Sales & Marketing 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.
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. Patreon Jack can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Patreon Jack can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Patreon Jack 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 Sales & Marketing segment.
Threats Patreon and Arts Funding External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Patreon and Arts Funding are -
High dependence on third party suppliers
– Patreon Jack 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.
Regulatory challenges
– Patreon Jack 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 Sales & Marketing industry regulations.
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. Patreon Jack 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.
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 Patreon Jack business can come under increasing regulations regarding data privacy, data security, etc.
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. Patreon Jack 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 Patreon Jack.
Shortening product life cycle
– it is one of the major threat that Patreon Jack is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Patreon Jack
– 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 Patreon Jack.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Patreon Jack 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 Patreon and Arts Funding .
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 Patreon Jack in the Sales & Marketing sector and impact the bottomline of the organization.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Patreon and Arts Funding, Patreon Jack 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 .
Technology acceleration in Forth Industrial Revolution
– Patreon Jack has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Patreon Jack needs to keep up with the evolution of technology in the Sales & Marketing 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.
Weighted SWOT Analysis of Patreon and Arts Funding 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 Patreon and Arts Funding 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 Patreon and Arts Funding 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 Patreon and Arts Funding 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 Patreon and Arts Funding 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 Patreon Jack needs to make to build a sustainable competitive advantage.
