That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version
The history, current dynamics, and future trends of the $10 billion home video rental industry provides a platform to discuss revenue-sharing contracts between suppliers of home videocassettes and retailers.
Swot Analysis of "That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version" written by V.G. Narayanan, Lisa Brem includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rental Videocassettes facing as an external strategic factors. Some of the topics covered in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version case study are - Strategic Management Strategies, Motivating people, Negotiations, Pricing, Supply chain and Finance & Accounting.
Some of the macro environment factors that can be used to understand the That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version casestudy better are - – geopolitical disruptions, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing commodity prices, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rental Videocassettes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rental Videocassettes 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version case study
2. Improving business portfolio management of Rental Videocassettes
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rental Videocassettes
Strengths That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rental Videocassettes in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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.
Learning organization
- Rental Videocassettes 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 Rental Videocassettes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Rental Videocassettes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Rental Videocassettes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rental Videocassettes 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.
High brand equity
– Rental Videocassettes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rental Videocassettes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Rental Videocassettes 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Rental Videocassettes 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version - 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 Rental Videocassettes in the sector have low bargaining power. That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rental Videocassettes to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Rental Videocassettes 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 Rental Videocassettes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Rental Videocassettes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Rental Videocassettes 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Rental Videocassettes digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rental Videocassettes 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.
Weaknesses That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version are -
High cash cycle compare to competitors
Rental Videocassettes 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Rental Videocassettes supply chain. Even after few cautionary changes mentioned in the HBR case study - That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rental Videocassettes vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version, is just above the industry average. Rental Videocassettes 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.
High bargaining power of channel partners
– Because of the regulatory requirements, V.G. Narayanan, Lisa Brem suggests that, Rental Videocassettes 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.
Lack of clear differentiation of Rental Videocassettes products
– To increase the profitability and margins on the products, Rental Videocassettes needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Rental Videocassettes 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.
Skills based hiring
– The stress on hiring functional specialists at Rental Videocassettes 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.
Increasing silos among functional specialists
– The organizational structure of Rental Videocassettes is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Rental Videocassettes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rental Videocassettes to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rental Videocassettes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Rental Videocassettes 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.
Slow decision making process
– As mentioned earlier in the report, Rental Videocassettes 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. Rental Videocassettes 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.
Opportunities That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version | 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rental Videocassettes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Rental Videocassettes 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.
Using analytics as competitive advantage
– Rental Videocassettes 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rental Videocassettes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rental Videocassettes is facing challenges because of the dominance of functional experts in the organization. That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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.
Buying journey improvements
– Rental Videocassettes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rental Videocassettes 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, That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Rental Videocassettes 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 Finance & Accounting segment.
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 Rental Videocassettes 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rental Videocassettes 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. Rental Videocassettes 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rental Videocassettes in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Rental Videocassettes to increase its market reach. Rental Videocassettes 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Rental Videocassettes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Rental Videocassettes 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.
Threats That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version are -
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 Rental Videocassettes business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Rental Videocassettes 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.
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 Rental Videocassettes in the Finance & Accounting sector and impact the bottomline of the organization.
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. Rental Videocassettes 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
– Rental Videocassettes has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Rental Videocassettes needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
Regulatory challenges
– Rental Videocassettes 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 Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version, Rental Videocassettes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Shortening product life cycle
– it is one of the major threat that Rental Videocassettes is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Rental Videocassettes needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rental Videocassettes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rental Videocassettes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Rental Videocassettes 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.
Weighted SWOT Analysis of That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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 That's a Wrap: The Dynamics of the Video Rental Industry, Spanish Version 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 Rental Videocassettes needs to make to build a sustainable competitive advantage.