Pandora: Royalties Kill the Web Radio Star? (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pandora: Royalties Kill the Web Radio Star? (A)
Joe Kennedy, president and CEO of Pandora, one of the largest and most popular web (internet) radio broadcasters, had just received bad news. The Copyright Royalty Board (CRB) had announced its decision to increase the royalties required to be paid by the web radio industry by 2.5 times over the next five years, effectively pushing profitability for Pandora out of sight. Pandora was a "webcaster" that was based on the Music Genome Project, which codified various attributes of a song (making "music DNA"). Using this technology, Pandora could provide a selection of songs with similar "music DNA" to the user's initial choice. Pandora, however, along with other webcasters, was subject to a special statutory scheme regarding royalties, which were higher than the royalties for satellite radio and from which AM/FM radios were totally exempt. This case examines issues of copyright, the economics of new media, and the specialized laws established to regulate a new subset of an existing industry.
Swot Analysis of "Pandora: Royalties Kill the Web Radio Star? (A)" written by Robert C. Pozen, Alex Rosenfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pandora Royalties facing as an external strategic factors. Some of the topics covered in Pandora: Royalties Kill the Web Radio Star? (A) case study are - Strategic Management Strategies, Policy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Pandora: Royalties Kill the Web Radio Star? (A) casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, increasing energy prices, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing commodity prices,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Pandora: Royalties Kill the Web Radio Star? (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pandora: Royalties Kill the Web Radio Star? (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pandora Royalties, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pandora Royalties 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 Pandora: Royalties Kill the Web Radio Star? (A) can be done for the following purposes –
1. Strategic planning using facts provided in Pandora: Royalties Kill the Web Radio Star? (A) case study
2. Improving business portfolio management of Pandora Royalties
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 Pandora Royalties
Strengths Pandora: Royalties Kill the Web Radio Star? (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pandora Royalties in Pandora: Royalties Kill the Web Radio Star? (A) Harvard Business Review case study are -
Organizational Resilience of Pandora Royalties
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pandora Royalties 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 Pandora Royalties 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.
Ability to recruit top talent
– Pandora Royalties is one of the leading recruiters in the industry. Managers in the Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora Royalties 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.
Highly skilled collaborators
– Pandora Royalties 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 Pandora: Royalties Kill the Web Radio Star? (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Pandora Royalties 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 Robert C. Pozen, Alex Rosenfeld 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.
Diverse revenue streams
– Pandora Royalties is present in almost all the verticals within the industry. This has provided firm in Pandora: Royalties Kill the Web Radio Star? (A) 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.
Ability to lead change in Leadership & Managing People field
– Pandora Royalties 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 Pandora Royalties in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Pandora Royalties digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pandora Royalties 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.
Training and development
– Pandora Royalties has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pandora: Royalties Kill the Web Radio Star? (A) 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.
Superior customer experience
– The customer experience strategy of Pandora Royalties in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora: Royalties Kill the Web Radio Star? (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pandora: Royalties Kill the Web Radio Star? (A) are -
Products dominated business model
– Even though Pandora Royalties 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 - Pandora: Royalties Kill the Web Radio Star? (A) should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Pandora: Royalties Kill the Web Radio Star? (A), is just above the industry average. Pandora Royalties 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.
Lack of clear differentiation of Pandora Royalties products
– To increase the profitability and margins on the products, Pandora Royalties needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Pandora: Royalties Kill the Web Radio Star? (A) HBR case study mentions - Pandora Royalties 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Pandora Royalties 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora Royalties 's lucrative 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 Pandora Royalties supply chain. Even after few cautionary changes mentioned in the HBR case study - Pandora: Royalties Kill the Web Radio Star? (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pandora Royalties vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Pandora Royalties 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 Pandora Royalties, firm in the HBR case study Pandora: Royalties Kill the Web Radio Star? (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Pandora Royalties has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Pandora Royalties is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Pandora Royalties needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pandora Royalties to focus more on services rather than just following the product oriented approach.
Opportunities Pandora: Royalties Kill the Web Radio Star? (A) | 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 Pandora: Royalties Kill the Web Radio Star? (A) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Pandora Royalties 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.
Loyalty marketing
– Pandora Royalties 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.
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. Pandora Royalties can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Pandora Royalties 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.
Using analytics as competitive advantage
– Pandora Royalties 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 Pandora: Royalties Kill the Web Radio Star? (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pandora Royalties to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Pandora Royalties in the consumer business. Now Pandora Royalties can target international markets with far fewer capital restrictions requirements than the existing system.
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 Pandora Royalties 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.
Developing new processes and practices
– Pandora Royalties can develop new processes and procedures in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pandora Royalties can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Pandora Royalties 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 Pandora Royalties in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
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. Pandora Royalties 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. Pandora Royalties 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 Pandora Royalties has opened avenues for new revenue streams for the organization in the industry. This can help Pandora Royalties to build a more holistic ecosystem as suggested in the Pandora: Royalties Kill the Web Radio Star? (A) case study. Pandora Royalties can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Pandora: Royalties Kill the Web Radio Star? (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pandora: Royalties Kill the Web Radio Star? (A) are -
Shortening product life cycle
– it is one of the major threat that Pandora Royalties is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Pandora Royalties business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Pandora Royalties 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. Pandora Royalties can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Pandora Royalties 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pandora: Royalties Kill the Web Radio Star? (A), Pandora Royalties may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
Increasing wage structure of Pandora Royalties
– 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 Pandora Royalties.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pandora Royalties 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pandora Royalties 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 Pandora: Royalties Kill the Web Radio Star? (A) .
Consumer confidence and its impact on Pandora Royalties 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.
Regulatory challenges
– Pandora Royalties 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.
Stagnating economy with rate increase
– Pandora Royalties 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.
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 Pandora Royalties in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora: Royalties Kill the Web Radio Star? (A) 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 Pandora Royalties needs to make to build a sustainable competitive advantage.