Paddle8: Painting a New Picture of the Art Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Paddle8: Painting a New Picture of the Art Market
The Paddle8 case is a short case that presents the idea for a new business in the global art market and asks students to evaluate whether it will work, given the structure and unique workings of the art market. Paddle8 is a New York-based startup that partners with well-known galleries to offer art works from their collections for sale on the Paddle8 website to carefully selected, globally-dispersed members. The firm aims to help galleries overcome their geographic limitations and to make art more accessible to a wide range of new collectors with the help of its technology platform. The question is: will this succeed in the context of the art market where exclusive access is a prime driver of value?
Swot Analysis of "Paddle8: Painting a New Picture of the Art Market" written by Mukti Khaire includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Paddle8 Art facing as an external strategic factors. Some of the topics covered in Paddle8: Painting a New Picture of the Art Market case study are - Strategic Management Strategies, Internet, Strategic planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Paddle8: Painting a New Picture of the Art Market casestudy better are - – increasing commodity prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, wage bills are increasing, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Paddle8: Painting a New Picture of the Art Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Paddle8: Painting a New Picture of the Art Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Paddle8 Art, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Paddle8 Art 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 Paddle8: Painting a New Picture of the Art Market can be done for the following purposes –
1. Strategic planning using facts provided in Paddle8: Painting a New Picture of the Art Market case study
2. Improving business portfolio management of Paddle8 Art
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 Paddle8 Art
Strengths Paddle8: Painting a New Picture of the Art Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Paddle8 Art in Paddle8: Painting a New Picture of the Art Market Harvard Business Review case study are -
Innovation driven organization
– Paddle8 Art is one of the most innovative firm in sector. Manager in Paddle8: Painting a New Picture of the Art Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Paddle8 Art
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Paddle8 Art does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Paddle8 Art 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 Paddle8: Painting a New Picture of the Art Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Paddle8 Art 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 Paddle8 Art is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Paddle8: Painting a New Picture of the Art Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Paddle8 Art has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Paddle8 Art 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.
Diverse revenue streams
– Paddle8 Art is present in almost all the verticals within the industry. This has provided firm in Paddle8: Painting a New Picture of the Art Market 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.
Low bargaining power of suppliers
– Suppliers of Paddle8 Art in the sector have low bargaining power. Paddle8: Painting a New Picture of the Art Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Paddle8 Art to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Paddle8: Painting a New Picture of the Art Market firm has clearly differentiated products in the market place. This has enabled Paddle8 Art to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Paddle8 Art to invest into research and development (R&D) and innovation.
Strong track record of project management
– Paddle8 Art is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Paddle8 Art in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Paddle8 Art has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Paddle8: Painting a New Picture of the Art Market 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.
Analytics focus
– Paddle8 Art 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 Mukti Khaire 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 Paddle8: Painting a New Picture of the Art Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Paddle8: Painting a New Picture of the Art Market are -
Interest costs
– Compare to the competition, Paddle8 Art has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Paddle8 Art 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.
Products dominated business model
– Even though Paddle8 Art 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 - Paddle8: Painting a New Picture of the Art Market should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Paddle8 Art products
– To increase the profitability and margins on the products, Paddle8 Art needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Paddle8: Painting a New Picture of the Art Market, in the dynamic environment Paddle8 Art has struggled to respond to the nimble upstart competition. Paddle8 Art has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Paddle8 Art 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.
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 Paddle8 Art supply chain. Even after few cautionary changes mentioned in the HBR case study - Paddle8: Painting a New Picture of the Art Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Paddle8 Art vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Paddle8: Painting a New Picture of the Art Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Paddle8 Art has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Paddle8: Painting a New Picture of the Art Market, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Paddle8: Painting a New Picture of the Art Market, it seems that the employees of Paddle8 Art 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.
Aligning sales with marketing
– It come across in the case study Paddle8: Painting a New Picture of the Art Market 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 Paddle8: Painting a New Picture of the Art Market can leverage the sales team experience to cultivate customer relationships as Paddle8 Art is planning to shift buying processes online.
Opportunities Paddle8: Painting a New Picture of the Art Market | 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 Paddle8: Painting a New Picture of the Art Market are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Paddle8 Art 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 Paddle8 Art in the consumer business. Now Paddle8 Art can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Paddle8 Art 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. Paddle8 Art 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.
Creating value in data economy
– The success of analytics program of Paddle8 Art has opened avenues for new revenue streams for the organization in the industry. This can help Paddle8 Art to build a more holistic ecosystem as suggested in the Paddle8: Painting a New Picture of the Art Market case study. Paddle8 Art can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Paddle8 Art 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.
Buying journey improvements
– Paddle8 Art can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Paddle8: Painting a New Picture of the Art Market 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.
Loyalty marketing
– Paddle8 Art 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Paddle8 Art is facing challenges because of the dominance of functional experts in the organization. Paddle8: Painting a New Picture of the Art Market 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.
Learning at scale
– Online learning technologies has now opened space for Paddle8 Art 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.
Building a culture of innovation
– managers at Paddle8 Art 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.
Better consumer reach
– The expansion of the 5G network will help Paddle8 Art to increase its market reach. Paddle8 Art 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.
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 Paddle8 Art 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Paddle8 Art 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 Paddle8 Art to hire the very best people irrespective of their geographical location.
Threats Paddle8: Painting a New Picture of the Art Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Paddle8: Painting a New Picture of the Art Market are -
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. Paddle8 Art needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Paddle8 Art 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.
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 Paddle8 Art.
Increasing wage structure of Paddle8 Art
– 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 Paddle8 Art.
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 Paddle8 Art in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Paddle8 Art with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Paddle8 Art 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.
Regulatory challenges
– Paddle8 Art 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.
Environmental challenges
– Paddle8 Art 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. Paddle8 Art can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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. Paddle8 Art 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.
Consumer confidence and its impact on Paddle8 Art 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 Paddle8: Painting a New Picture of the Art Market 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 Paddle8: Painting a New Picture of the Art Market 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 Paddle8: Painting a New Picture of the Art Market 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 Paddle8: Painting a New Picture of the Art Market 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 Paddle8: Painting a New Picture of the Art Market 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 Paddle8 Art needs to make to build a sustainable competitive advantage.