Creative Capital: Sustaining the Arts SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Creative Capital: Sustaining the Arts
Creative Capital provides grants to individual artists using a venture capital model-the money comes with guidance and governance. Artists receive money as milestones are reached and also receive guidance on managing their lives and business to increase their sustainability. But as Ruby Lerner, CEO of Creative Capital, looks to the organization's next decade, how can she ensure the sustainability of this high-touch, uniquely individual model?
Swot Analysis of "Creative Capital: Sustaining the Arts" written by G. Felda Hardymon, Ann Leamon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Creative Artists facing as an external strategic factors. Some of the topics covered in Creative Capital: Sustaining the Arts case study are - Strategic Management Strategies, Strategic planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Creative Capital: Sustaining the Arts casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, wage bills are increasing,
increasing energy prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Creative Capital: Sustaining the Arts
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Creative Capital: Sustaining the Arts case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Creative Artists, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Creative Artists 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 Creative Capital: Sustaining the Arts can be done for the following purposes –
1. Strategic planning using facts provided in Creative Capital: Sustaining the Arts case study
2. Improving business portfolio management of Creative Artists
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Creative Artists
Strengths Creative Capital: Sustaining the Arts | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Creative Artists in Creative Capital: Sustaining the Arts Harvard Business Review case study are -
Strong track record of project management
– Creative Artists is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Creative Capital: Sustaining the Arts 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Creative Capital: Sustaining the Arts firm has clearly differentiated products in the market place. This has enabled Creative Artists to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Creative Artists to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Creative Artists 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 Creative Capital: Sustaining the Arts HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Creative Artists 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 Creative Capital: Sustaining the Arts - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Creative Artists is one of the leading recruiters in the industry. Managers in the Creative Capital: Sustaining the Arts are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Creative Artists 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.
Low bargaining power of suppliers
– Suppliers of Creative Artists in the sector have low bargaining power. Creative Capital: Sustaining the Arts has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Creative Artists to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Creative Artists is one of the most innovative firm in sector. Manager in Creative Capital: Sustaining the Arts Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Creative Artists in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Creative Artists has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Creative Capital: Sustaining the Arts 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Creative Artists digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Creative Artists 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 Creative Capital: Sustaining the Arts | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Creative Capital: Sustaining the Arts are -
Low market penetration in new markets
– Outside its home market of Creative Artists, firm in the HBR case study Creative Capital: Sustaining the Arts needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Creative Artists supply chain. Even after few cautionary changes mentioned in the HBR case study - Creative Capital: Sustaining the Arts, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Creative Artists vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Creative Artists 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.
Aligning sales with marketing
– It come across in the case study Creative Capital: Sustaining the Arts 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 Creative Capital: Sustaining the Arts can leverage the sales team experience to cultivate customer relationships as Creative Artists is planning to shift buying processes online.
Products dominated business model
– Even though Creative Artists 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 - Creative Capital: Sustaining the Arts should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Creative Capital: Sustaining the Arts HBR case study mentions - Creative Artists takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Creative Artists 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 operating costs
– Compare to the competitors, firm in the HBR case study Creative Capital: Sustaining the Arts 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 Creative Artists 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Creative Capital: Sustaining the Arts, it seems that the employees of Creative Artists 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.
Need for greater diversity
– Creative Artists 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.
Interest costs
– Compare to the competition, Creative Artists 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.
Opportunities Creative Capital: Sustaining the Arts | 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 Creative Capital: Sustaining the Arts are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Creative Artists 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.
Manufacturing automation
– Creative Artists can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Creative Artists 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 Creative Capital: Sustaining the Arts - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Creative Artists to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Creative Artists can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Creative Artists has opened avenues for new revenue streams for the organization in the industry. This can help Creative Artists to build a more holistic ecosystem as suggested in the Creative Capital: Sustaining the Arts case study. Creative Artists can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Creative Artists 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Creative Artists can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Creative Artists in the consumer business. Now Creative Artists can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Creative Artists 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 Innovation & Entrepreneurship segment.
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. Creative Artists can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Creative Artists can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Creative Capital: Sustaining the Arts 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.
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 Creative Artists to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Creative Artists is facing challenges because of the dominance of functional experts in the organization. Creative Capital: Sustaining the Arts 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.
Threats Creative Capital: Sustaining the Arts External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Creative Capital: Sustaining the Arts are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Creative Capital: Sustaining the Arts, Creative Artists may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Creative Artists business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Creative Artists 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Creative Artists with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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
– Creative Artists needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Creative Artists 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 Creative Capital: Sustaining the Arts .
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.
Environmental challenges
– Creative Artists needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Creative Artists can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Shortening product life cycle
– it is one of the major threat that Creative Artists is facing in Innovation & Entrepreneurship 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 Creative Artists.
Increasing wage structure of Creative Artists
– 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 Creative Artists.
Stagnating economy with rate increase
– Creative Artists 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.
Weighted SWOT Analysis of Creative Capital: Sustaining the Arts 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 Creative Capital: Sustaining the Arts 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 Creative Capital: Sustaining the Arts 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 Creative Capital: Sustaining the Arts 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 Creative Capital: Sustaining the Arts 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 Creative Artists needs to make to build a sustainable competitive advantage.
