Artisan Entertainment Inc. SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Artisan Entertainment Inc.
Geoff Rehnert and Marc Wolpow have left Bain Capital to launch Audax Group. As part of their separation, they have been granted 90-day options to purchase Bain Capital's stake in a number of portfolio companies at Fair Market Value. As they consider whether to exercise their option to purchase Bain Capital's stake in Artisan Entertainment, the company has an extremely successful launch of "The Blair Witch Project." However, Rehnert and Wolpow have not yet raised Audax Group's first fund, and are not able personally to finance the purchase, which would require approximately $30 million. They must decide whether to go through with the purchase, and how to finance it, keeping in mind any issues such an investment would raise for prospective investors in their first private equity fund.
Authors :: Nabil N. El-Hage, Christopher E.J. Payton
Swot Analysis of "Artisan Entertainment Inc." written by Nabil N. El-Hage, Christopher E.J. Payton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Audax Rehnert facing as an external strategic factors. Some of the topics covered in Artisan Entertainment Inc. case study are - Strategic Management Strategies, Financial markets, Marketing, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Artisan Entertainment Inc. casestudy better are - – there is backlash against globalization, increasing commodity prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
Introduction to SWOT Analysis of Artisan Entertainment Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Artisan Entertainment Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Audax Rehnert, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Audax Rehnert 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 Artisan Entertainment Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Artisan Entertainment Inc. case study
2. Improving business portfolio management of Audax Rehnert
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 Audax Rehnert
Strengths Artisan Entertainment Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Audax Rehnert in Artisan Entertainment Inc. Harvard Business Review case study are -
Ability to recruit top talent
– Audax Rehnert is one of the leading recruiters in the industry. Managers in the Artisan Entertainment Inc. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Audax Rehnert 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.
Strong track record of project management
– Audax Rehnert is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Audax Rehnert in the sector have low bargaining power. Artisan Entertainment Inc. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Audax Rehnert to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Artisan Entertainment Inc. firm has clearly differentiated products in the market place. This has enabled Audax Rehnert to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Audax Rehnert to invest into research and development (R&D) and innovation.
Organizational Resilience of Audax Rehnert
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Audax Rehnert does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Audax Rehnert 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.
Effective Research and Development (R&D)
– Audax Rehnert 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 Artisan Entertainment Inc. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Audax Rehnert has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Audax Rehnert to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Artisan Entertainment Inc. 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
- Audax Rehnert 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 Audax Rehnert is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Artisan Entertainment Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Audax Rehnert 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 Artisan Entertainment Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Artisan Entertainment Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Artisan Entertainment Inc. are -
Slow to strategic competitive environment developments
– As Artisan Entertainment Inc. HBR case study mentions - Audax Rehnert 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Artisan Entertainment Inc., in the dynamic environment Audax Rehnert has struggled to respond to the nimble upstart competition. Audax Rehnert has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Audax Rehnert 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. Audax Rehnert 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.
High cash cycle compare to competitors
Audax Rehnert 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Audax Rehnert is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Artisan Entertainment Inc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Audax Rehnert 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 - Artisan Entertainment Inc. should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Audax Rehnert, firm in the HBR case study Artisan Entertainment Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Audax Rehnert is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Audax Rehnert needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Audax Rehnert to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Artisan Entertainment Inc. 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 Audax Rehnert 's lucrative customers.
Need for greater diversity
– Audax Rehnert 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.
Capital Spending Reduction
– Even during the low interest decade, Audax Rehnert has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Artisan Entertainment Inc. | 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 Artisan Entertainment Inc. are -
Loyalty marketing
– Audax Rehnert 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.
Better consumer reach
– The expansion of the 5G network will help Audax Rehnert to increase its market reach. Audax Rehnert 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
– Audax Rehnert 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 Artisan Entertainment Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Audax Rehnert to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Audax Rehnert can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Building a culture of innovation
– managers at Audax Rehnert 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.
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. Audax Rehnert can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Audax Rehnert 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.
Developing new processes and practices
– Audax Rehnert can develop new processes and procedures in Finance & Accounting 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. Audax Rehnert can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Audax Rehnert can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Artisan Entertainment Inc. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Audax Rehnert can use these opportunities to build new business models that can help the communities that Audax Rehnert operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Audax Rehnert can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Audax Rehnert has opened avenues for new revenue streams for the organization in the industry. This can help Audax Rehnert to build a more holistic ecosystem as suggested in the Artisan Entertainment Inc. case study. Audax Rehnert can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Artisan Entertainment Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Artisan Entertainment Inc. are -
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. Audax Rehnert 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 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.
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.
Technology acceleration in Forth Industrial Revolution
– Audax Rehnert has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Audax Rehnert 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.
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. Audax Rehnert needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Audax Rehnert.
Stagnating economy with rate increase
– Audax Rehnert 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Audax Rehnert in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Audax Rehnert 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.
Shortening product life cycle
– it is one of the major threat that Audax Rehnert is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Audax Rehnert 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 Artisan Entertainment Inc. .
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 Audax Rehnert in the Finance & Accounting sector and impact the bottomline of the organization.
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 Audax Rehnert business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Artisan Entertainment Inc. 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 Artisan Entertainment Inc. 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 Artisan Entertainment Inc. 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 Artisan Entertainment Inc. 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 Artisan Entertainment Inc. 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 Audax Rehnert needs to make to build a sustainable competitive advantage.