CircusTrix: The Ups and Downs of International Expansion SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CircusTrix: The Ups and Downs of International Expansion
CircusTrix Trampoline Parks (CircusTrix) was started in San Francisco, California, in 2011 after the founder first experienced an indoor trampoline park. Less than five years later, the business had grown to more than 28 facilities worldwide, grossing US$24.5 million in 2014 alone. The company had originally expanded internationally to maintain its first-mover status in the emerging extreme recreation industry, but was now facing a problem that could derail the company's international growth for years to come. A customer in the brand new CircusTrix park in Edinburgh, Scotland, had injured himself and blamed CircusTrix. As a result, city officials had shut down the facility, with another park scheduled to open in just over two weeks in Glasgow. The public relations issue was threatening to cost the founder not only his brand new operations in the United Kingdom, but likely also the additional upcoming locations in Germany, France, and Holland. Simon Greathead and Case Lawrence are affiliated with Brigham Young University.
Authors :: Simon Greathead, Case Lawrence, Jonathan Richards
Swot Analysis of "CircusTrix: The Ups and Downs of International Expansion" written by Simon Greathead, Case Lawrence, Jonathan Richards includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Circustrix Trampoline facing as an external strategic factors. Some of the topics covered in CircusTrix: The Ups and Downs of International Expansion case study are - Strategic Management Strategies, Growth strategy, Personnel policies, Social platforms and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the CircusTrix: The Ups and Downs of International Expansion casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, supply chains are disrupted by pandemic , increasing transportation and logistics costs, central banks are concerned over increasing inflation,
cloud computing is disrupting traditional business models, there is backlash against globalization, etc
Introduction to SWOT Analysis of CircusTrix: The Ups and Downs of International Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CircusTrix: The Ups and Downs of International Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Circustrix Trampoline, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Circustrix Trampoline 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 CircusTrix: The Ups and Downs of International Expansion can be done for the following purposes –
1. Strategic planning using facts provided in CircusTrix: The Ups and Downs of International Expansion case study
2. Improving business portfolio management of Circustrix Trampoline
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 Circustrix Trampoline
Strengths CircusTrix: The Ups and Downs of International Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Circustrix Trampoline in CircusTrix: The Ups and Downs of International Expansion Harvard Business Review case study are -
High switching costs
– The high switching costs that Circustrix Trampoline 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 Circustrix Trampoline in the sector have low bargaining power. CircusTrix: The Ups and Downs of International Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Circustrix Trampoline to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Circustrix Trampoline has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Circustrix Trampoline 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.
Organizational Resilience of Circustrix Trampoline
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Circustrix Trampoline does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Circustrix Trampoline is one of the leading recruiters in the industry. Managers in the CircusTrix: The Ups and Downs of International Expansion are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Circustrix Trampoline is one of the most innovative firm in sector. Manager in CircusTrix: The Ups and Downs of International Expansion Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Circustrix Trampoline 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 Circustrix Trampoline is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in CircusTrix: The Ups and Downs of International Expansion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Circustrix Trampoline is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– CircusTrix: The Ups and Downs of International Expansion firm has clearly differentiated products in the market place. This has enabled Circustrix Trampoline to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Circustrix Trampoline to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Circustrix Trampoline 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 CircusTrix: The Ups and Downs of International Expansion - 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 lead change in Leadership & Managing People field
– Circustrix Trampoline 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 Circustrix Trampoline in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CircusTrix: The Ups and Downs of International Expansion are -
Slow decision making process
– As mentioned earlier in the report, Circustrix Trampoline has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Circustrix Trampoline even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study CircusTrix: The Ups and Downs of International Expansion, is just above the industry average. Circustrix Trampoline 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.
Need for greater diversity
– Circustrix Trampoline 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.
Low market penetration in new markets
– Outside its home market of Circustrix Trampoline, firm in the HBR case study CircusTrix: The Ups and Downs of International Expansion needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Simon Greathead, Case Lawrence, Jonathan Richards suggests that, Circustrix Trampoline is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Circustrix Trampoline products
– To increase the profitability and margins on the products, Circustrix Trampoline needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Circustrix Trampoline is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CircusTrix: The Ups and Downs of International Expansion can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study CircusTrix: The Ups and Downs of International Expansion, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Interest costs
– Compare to the competition, Circustrix Trampoline 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.
Aligning sales with marketing
– It come across in the case study CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion can leverage the sales team experience to cultivate customer relationships as Circustrix Trampoline is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study CircusTrix: The Ups and Downs of International Expansion, in the dynamic environment Circustrix Trampoline has struggled to respond to the nimble upstart competition. Circustrix Trampoline has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities CircusTrix: The Ups and Downs of International Expansion | 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 CircusTrix: The Ups and Downs of International Expansion are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Circustrix Trampoline 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.
Creating value in data economy
– The success of analytics program of Circustrix Trampoline has opened avenues for new revenue streams for the organization in the industry. This can help Circustrix Trampoline to build a more holistic ecosystem as suggested in the CircusTrix: The Ups and Downs of International Expansion case study. Circustrix Trampoline can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Circustrix Trampoline can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CircusTrix: The Ups and Downs of International Expansion 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Circustrix Trampoline 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.
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. Circustrix Trampoline can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Circustrix Trampoline 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 CircusTrix: The Ups and Downs of International Expansion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Circustrix Trampoline to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Circustrix Trampoline can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, CircusTrix: The Ups and Downs of International Expansion, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Circustrix Trampoline 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Circustrix Trampoline can use these opportunities to build new business models that can help the communities that Circustrix Trampoline operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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. Circustrix Trampoline 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. Circustrix Trampoline 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.
Leveraging digital technologies
– Circustrix Trampoline 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.
Developing new processes and practices
– Circustrix Trampoline 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.
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. Circustrix Trampoline can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats CircusTrix: The Ups and Downs of International Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CircusTrix: The Ups and Downs of International Expansion are -
Stagnating economy with rate increase
– Circustrix Trampoline 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Circustrix Trampoline can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Circustrix Trampoline 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.
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 Circustrix Trampoline business can come under increasing regulations regarding data privacy, data security, etc.
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 Circustrix Trampoline in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Circustrix Trampoline 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.
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 Circustrix Trampoline.
Shortening product life cycle
– it is one of the major threat that Circustrix Trampoline is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Circustrix Trampoline 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 CircusTrix: The Ups and Downs of International Expansion .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Circustrix Trampoline with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Circustrix Trampoline has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Circustrix Trampoline 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.
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. Circustrix Trampoline needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Circustrix Trampoline 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 CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion 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 CircusTrix: The Ups and Downs of International Expansion 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 Circustrix Trampoline needs to make to build a sustainable competitive advantage.
