SWOT Analysis / TOWS Matrix for Ardent Leisure (Australia)
Based on various researches at Oak Spring University , Ardent Leisure is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing transportation and logistics costs, increasing energy prices,
central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ardent Leisure can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ardent Leisure, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ardent Leisure 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 Ardent Leisure can be done for the following purposes –
1. Strategic planning of Ardent Leisure
2. Improving business portfolio management of Ardent Leisure
3. Assessing feasibility of the new initiative in Australia
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ardent Leisure
Strengths of Ardent Leisure | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ardent Leisure are -
Successful track record of launching new products
– Ardent Leisure has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ardent Leisure 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
- Ardent Leisure 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 Ardent Leisure is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ardent Leisure emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Ardent Leisure in Recreational Activities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Ardent Leisure is one of the leading players in the Recreational Activities industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Recreational Activities industry
- digital transformation varies from industry to industry. For Ardent Leisure digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ardent Leisure 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.
Strong track record of project management in the Recreational Activities industry
– Ardent Leisure 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 Ardent Leisure 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.
Low bargaining power of suppliers
– Suppliers of Ardent Leisure in the Services sector have low bargaining power. Ardent Leisure has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ardent Leisure to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Ardent Leisure is present in almost all the verticals within the Recreational Activities industry. This has provided Ardent Leisure 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 Recreational Activities
– Ardent Leisure is one of the leading players in the Recreational Activities industry in Australia. Over the years it has not only transformed the business landscape in the Recreational Activities industry in Australia but also across the existing markets. The ability to lead change has enabled Ardent Leisure in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Ardent Leisure has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Ardent Leisure has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ardent Leisure staying ahead in the Recreational Activities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Ardent Leisure | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ardent Leisure are -
Workers concerns about automation
– As automation is fast increasing in the Recreational Activities industry, Ardent Leisure 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 dependence on Ardent Leisure ‘s star products
– The top 2 products and services of Ardent Leisure still accounts for major business revenue. This dependence on star products in Recreational Activities industry has resulted into insufficient focus on developing new products, even though Ardent Leisure has relatively successful track record of launching new products.
Products dominated business model
– Even though Ardent Leisure has some of the most successful models in the Recreational Activities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ardent Leisure should strive to include more intangible value offerings along with its core products and services.
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 Ardent Leisure supply chain. Even after few cautionary changes, Ardent Leisure is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ardent Leisure vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Australia, Ardent Leisure needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Ardent Leisure products
– To increase the profitability and margins on the products, Ardent Leisure needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Ardent Leisure has a high cash cycle compare to other players in the Recreational Activities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Ardent Leisure has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Recreational Activities industry over the last five years. Ardent Leisure 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.
Increasing silos among functional specialists
– The organizational structure of Ardent Leisure is dominated by functional specialists. It is not different from other players in the Recreational Activities industry, but Ardent Leisure needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ardent Leisure to focus more on services in the Recreational Activities industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ardent Leisure is slow explore the new channels of communication. These new channels of communication can help Ardent Leisure to provide better information regarding Recreational Activities products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Ardent Leisure 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 Recreational Activities industry using digital technology.
Ardent Leisure Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ardent Leisure are -
Use of Bitcoin and other crypto currencies for transactions in Recreational Activities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ardent Leisure in the Recreational Activities industry. Now Ardent Leisure can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Ardent Leisure can improve the customer journey of consumers in the Recreational Activities 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.
Using analytics as competitive advantage
– Ardent Leisure has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Activities sector. This continuous investment in analytics has enabled Ardent Leisure to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ardent Leisure to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Ardent Leisure can develop new processes and procedures in Recreational Activities 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Recreational Activities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ardent Leisure 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. Ardent Leisure 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 Ardent Leisure has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help Ardent Leisure to build a more holistic ecosystem for Ardent Leisure products in the Recreational Activities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Ardent Leisure 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 Ardent Leisure to increase its market reach. Ardent Leisure 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ardent Leisure can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Ardent Leisure 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.
Loyalty marketing
– Ardent Leisure 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.
Building a culture of innovation
– managers at Ardent Leisure 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 Recreational Activities industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ardent Leisure 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.
Threats Ardent Leisure External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ardent Leisure are -
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.
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 Ardent Leisure.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ardent Leisure in Recreational Activities industry. The Recreational Activities 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.
Stagnating economy with rate increase
– Ardent Leisure 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 Recreational Activities industry.
Regulatory challenges
– Ardent Leisure 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 Recreational Activities industry regulations.
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 Ardent Leisure in the Recreational Activities sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Ardent Leisure has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, Ardent Leisure needs to keep up with the evolution of technology in the Recreational Activities 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.
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. Ardent Leisure 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.
Environmental challenges
– Ardent Leisure 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. Ardent Leisure can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
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.
Consumer confidence and its impact on Ardent Leisure 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 Recreational Activities industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ardent Leisure 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 Ardent Leisure prominent markets.
Shortening product life cycle
– it is one of the major threat that Ardent Leisure is facing in Recreational Activities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Ardent Leisure Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ardent Leisure 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 Ardent Leisure 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 Ardent Leisure 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 Ardent Leisure 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 Ardent Leisure needs to make to build a sustainable competitive advantage.