SWOT Analysis / TOWS Matrix for MNC Studios (Indonesia)
Based on various researches at Oak Spring University , MNC Studios is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MNC Studios can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MNC Studios, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MNC Studios 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 MNC Studios can be done for the following purposes –
1. Strategic planning of MNC Studios
2. Improving business portfolio management of MNC Studios
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Motion Pictures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MNC Studios
Strengths of MNC Studios | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MNC Studios are -
Highly skilled collaborators
– MNC Studios has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Motion Pictures industry. Secondly the value chain collaborators of MNC Studios have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of MNC Studios comprises – understanding the underlying the factors in the Motion Pictures 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.
Successful track record of launching new products
– MNC Studios has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. MNC Studios 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.
Learning organization
- MNC Studios 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 MNC Studios is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at MNC Studios emphasize – knowledge, initiative, and innovation.
Digital Transformation in Motion Pictures industry
- digital transformation varies from industry to industry. For MNC Studios digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MNC Studios 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.
Sustainable margins compare to other players in Motion Pictures industry
– MNC Studios has clearly differentiated products in the market place. This has enabled MNC Studios to fetch slight price premium compare to the competitors in the Motion Pictures industry. The sustainable margins have also helped MNC Studios to invest into research and development (R&D) and innovation.
Diverse revenue streams
– MNC Studios is present in almost all the verticals within the Motion Pictures industry. This has provided MNC Studios 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 recruit top talent
– MNC Studios is one of the leading players in the Motion Pictures industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of MNC Studios in the Services sector have low bargaining power. MNC Studios has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MNC Studios to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– MNC Studios 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 Motion Pictures industry. The technology infrastructure of Indonesia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management in the Motion Pictures industry
– MNC Studios is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the MNC Studios 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.
Weaknesses of MNC Studios | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MNC Studios are -
Ability to respond to the competition
– As the decision making is very deliberative at MNC Studios, in the dynamic environment of Motion Pictures industry it has struggled to respond to the nimble upstart competition. MNC Studios has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– MNC Studios 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.
Compensation and incentives
– The revenue per employee of MNC Studios is just above the Motion Pictures industry average. It 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.
Increasing silos among functional specialists
– The organizational structure of MNC Studios is dominated by functional specialists. It is not different from other players in the Motion Pictures industry, but MNC Studios needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help MNC Studios to focus more on services in the Motion Pictures industry rather than just following the product oriented approach.
Lack of clear differentiation of MNC Studios products
– To increase the profitability and margins on the products, MNC Studios needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
MNC Studios has a high cash cycle compare to other players in the Motion Pictures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Motion Pictures industry, MNC Studios 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, MNC Studios 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.
Capital Spending Reduction
– Even during the low interest decade, MNC Studios 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 Motion Pictures industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of MNC Studios, it seems that company is thinking out the frontier risks that can impact Motion Pictures industry. 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.
Low market penetration in new markets
– Outside its home market of Indonesia, MNC Studios needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
MNC Studios Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MNC Studios are -
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. MNC Studios can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for MNC Studios 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 MNC Studios to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for MNC Studios 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.
Better consumer reach
– The expansion of the 5G network will help MNC Studios to increase its market reach. MNC Studios 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, MNC Studios 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 MNC Studios to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects MNC Studios can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for MNC Studios in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Motion Pictures industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– MNC Studios 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, MNC Studios 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, MNC Studios can use these opportunities to build new business models that can help the communities that MNC Studios operates in. Secondly it can use opportunities from government spending in Motion Pictures sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, MNC Studios is facing challenges because of the dominance of functional experts in the organization. MNC Studios can utilize new technology in the field of Motion Pictures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of MNC Studios has opened avenues for new revenue streams for the organization in Motion Pictures industry. This can help MNC Studios to build a more holistic ecosystem for MNC Studios products in the Motion Pictures industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– MNC Studios can improve the customer journey of consumers in the Motion Pictures industry by using analytics and artificial intelligence. It 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.
Threats MNC Studios External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MNC Studios are -
Increasing wage structure of MNC Studios
– 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 MNC Studios.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, MNC Studios 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 MNC Studios prominent markets.
Easy access to finance
– Easy access to finance in Motion Pictures industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. MNC Studios 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. MNC Studios 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for MNC Studios in Motion Pictures industry. The Motion Pictures 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.
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. MNC Studios needs to understand the core reasons impacting the Motion Pictures industry. This will help it in building a better workplace.
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.
Environmental challenges
– MNC Studios 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. MNC Studios can take advantage of this fund but it will also bring new competitors in the Motion Pictures industry.
Technology acceleration in Forth Industrial Revolution
– MNC Studios has witnessed rapid integration of technology during Covid-19 in the Motion Pictures industry. As one of the leading players in the industry, MNC Studios needs to keep up with the evolution of technology in the Motion Pictures 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
– MNC Studios 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.
Consumer confidence and its impact on MNC Studios 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 Motion Pictures industry and other sectors.
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 MNC Studios in the Motion Pictures sector and impact the bottomline of the organization.
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 MNC Studios business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of MNC Studios Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MNC Studios 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 MNC Studios 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 MNC Studios 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 MNC Studios 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 MNC Studios needs to make to build a sustainable competitive advantage.