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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, increasing household debt because of falling income levels, 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 -
High switching costs
– The high switching costs that Stewart Martha 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.
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.
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.
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.
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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Stewart Martha in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Stewart Martha is one of the leading recruiters in the industry. Managers in the Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Stewart Martha in the sector have low bargaining power. Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stewart Martha to manage not only supply disruptions but also source products at highly competitive prices.
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 decision making process
– As mentioned earlier in the report, Stewart Martha 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. Stewart Martha 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.
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.
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing", in the dynamic environment Stewart Martha has struggled to respond to the nimble upstart competition. Stewart Martha has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" can leverage the sales team experience to cultivate customer relationships as Stewart Martha is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" HBR case study mentions - Stewart Martha takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing" 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 Stewart Martha has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, James Shein suggests that, Stewart Martha 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.
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.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Stewart Martha 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 Stewart Martha to hire the very best people irrespective of their geographical location.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stewart Martha 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, Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 Stewart Martha 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.
Leveraging digital technologies
– Stewart Martha 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.
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.
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.
Developing new processes and practices
– Stewart Martha 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 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.
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.
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.
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 -
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.
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.
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.
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. Stewart Martha needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Corporate Governance at Martha Stewart Living Omnimedia: Not "A Good Thing", Stewart Martha 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 .
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. Stewart Martha can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 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.
Shortening product life cycle
– it is one of the major threat that Stewart Martha is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.