Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing"
"The case opens with Martha Stewart's 2005 release from prison following her conviction for obstructing an insider-trading investigation of her 2001 sale of personal stock. The scandal dealt a crippling blow to the powerful Martha Stewart brand and drove results at her namesake company, Martha Stewart Living Omnimedia (MSO), deep into the red. But as owner of more than 90 percent of MSO's voting shares, Stewart continued to control the company throughout the scandal. The company faced significant external challenges, including changing consumer preferences and mounting competition in all of its markets. Ad rates were under pressure as advertisers began fragmenting spending across multiple platforms, including the Internet and social media, where MSO was weak. New competitors were luring readers from MSO's flagship publication, Martha Stewart Living. And in its second biggest business, merchandising, retailing juggernauts such as Walmart and Target were crushing MSO's most important sales channel, Kmart. Internal challenges loomed even larger, with numerous failures of governance while the company attempted a turnaround. This case can be used to teach either corporate governance or turnarounds. "
Swot Analysis of "Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing"" written by James Shein includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stewart Martha facing as an external strategic factors. Some of the topics covered in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" case study are - Strategic Management Strategies, Compensation, Crisis management, Decision making, Leadership, Succession planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" casestudy better are - – there is backlash against globalization, technology disruption, increasing household debt because of falling income levels, there is increasing trade war between United States & China, geopolitical disruptions, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stewart Martha, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stewart Martha 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" can be done for the following purposes –
1. Strategic planning using facts provided in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" case study
2. Improving business portfolio management of Stewart Martha
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stewart Martha
Strengths Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stewart Martha in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" Harvard Business Review case study are -
Organizational Resilience of Stewart Martha
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stewart Martha does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Stewart Martha digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stewart Martha 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.
Highly skilled collaborators
– Stewart Martha 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Stewart Martha 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 James Shein 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" firm has clearly differentiated products in the market place. This has enabled Stewart Martha to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Stewart Martha to invest into research and development (R&D) and innovation.
Innovation driven organization
– Stewart Martha is one of the most innovative firm in sector. Manager in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Stewart Martha 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Stewart Martha has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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.
Ability to lead change in Leadership & Managing People field
– Stewart Martha 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 Stewart Martha in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Stewart Martha is present in almost all the verticals within the industry. This has provided firm in Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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.
Cross disciplinary teams
– Horizontal connected teams at the Stewart Martha 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.
Operational resilience
– The operational resilience strategy in the Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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.
Weaknesses Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Stewart Martha is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High 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 Stewart Martha supply chain. Even after few cautionary changes mentioned in the HBR case study - Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Stewart Martha vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Stewart Martha is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Stewart Martha needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stewart Martha to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing", is just above the industry average. Stewart Martha 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.
Capital Spending Reduction
– Even during the low interest decade, Stewart Martha 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.
Need for greater diversity
– Stewart Martha 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 cash cycle compare to competitors
Stewart Martha 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.
Low market penetration in new markets
– Outside its home market of Stewart Martha, firm in the HBR case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Stewart Martha 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 - Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Stewart Martha 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.
Interest costs
– Compare to the competition, Stewart Martha 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" | 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" are -
Building a culture of innovation
– managers at Stewart Martha 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 Leadership & Managing People segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Stewart Martha is facing challenges because of the dominance of functional experts in the organization. Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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.
Manufacturing automation
– Stewart Martha can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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. Stewart Martha can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Stewart Martha can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Stewart Martha in the consumer business. Now Stewart Martha can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Stewart Martha 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.
Creating value in data economy
– The success of analytics program of Stewart Martha has opened avenues for new revenue streams for the organization in the industry. This can help Stewart Martha to build a more holistic ecosystem as suggested in the Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" case study. Stewart Martha can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stewart Martha can use these opportunities to build new business models that can help the communities that Stewart Martha operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Better consumer reach
– The expansion of the 5G network will help Stewart Martha to increase its market reach. Stewart Martha 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Stewart Martha 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. Stewart Martha 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stewart Martha 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 Stewart Martha 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.
Threats Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" are -
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 Stewart Martha.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Stewart Martha with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Stewart Martha in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Stewart Martha 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 Leadership & Managing People industry regulations.
Consumer confidence and its impact on Stewart Martha 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.
Increasing wage structure of Stewart Martha
– 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 Stewart Martha.
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.
High dependence on third party suppliers
– Stewart Martha 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Stewart Martha 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" .
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. Stewart Martha 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
– Stewart Martha has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Stewart Martha needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Stewart Martha business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stewart Martha in the Leadership & Managing People industry. The Leadership & Managing People 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.
Weighted SWOT Analysis of Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Stewart Martha needs to make to build a sustainable competitive advantage.