Based on various researches at Oak Spring University , Clear Channel Outdoor is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Clear Channel Outdoor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Clear Channel Outdoor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Clear Channel Outdoor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Clear Channel Outdoor 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 Clear Channel Outdoor can be done for the following purposes –
1. Strategic planning of Clear Channel Outdoor
2. Improving business portfolio management of Clear Channel Outdoor
3. Assessing feasibility of the new initiative in United States
4. Making a Advertising sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Clear Channel Outdoor
Strengths of Clear Channel Outdoor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Clear Channel Outdoor are -
High switching costs
– The high switching costs that Clear Channel Outdoor 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 Clear Channel Outdoor in the Services sector have low bargaining power. Clear Channel Outdoor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Clear Channel Outdoor to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Clear Channel Outdoor 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 Advertising industry. The technology infrastructure of United States 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.
Ability to recruit top talent
– Clear Channel Outdoor is one of the leading players in the Advertising industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Advertising
– Clear Channel Outdoor is one of the leading players in the Advertising industry in United States. Over the years it has not only transformed the business landscape in the Advertising industry in United States but also across the existing markets. The ability to lead change has enabled Clear Channel Outdoor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Clear Channel Outdoor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Clear Channel Outdoor 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.
Diverse revenue streams
– Clear Channel Outdoor is present in almost all the verticals within the Advertising industry. This has provided Clear Channel Outdoor 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.
Organizational Resilience of Clear Channel Outdoor
– The covid-19 pandemic has put organizational resilience at the centre of everthing Clear Channel Outdoor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Advertising industry
– Clear Channel Outdoor has clearly differentiated products in the market place. This has enabled Clear Channel Outdoor to fetch slight price premium compare to the competitors in the Advertising industry. The sustainable margins have also helped Clear Channel Outdoor to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Clear Channel Outdoor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Clear Channel Outdoor staying ahead in the Advertising industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Clear Channel Outdoor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Clear Channel Outdoor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Clear Channel Outdoor has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Advertising industry. Secondly the value chain collaborators of Clear Channel Outdoor have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Clear Channel Outdoor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Clear Channel Outdoor are -
Products dominated business model
– Even though Clear Channel Outdoor has some of the most successful models in the Advertising industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Clear Channel Outdoor should strive to include more intangible value offerings along with its core products and services.
High dependence on Clear Channel Outdoor ‘s star products
– The top 2 products and services of Clear Channel Outdoor still accounts for major business revenue. This dependence on star products in Advertising industry has resulted into insufficient focus on developing new products, even though Clear Channel Outdoor has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Clear Channel Outdoor has high operating costs in the Advertising industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Clear Channel Outdoor lucrative customers.
Slow to strategic competitive environment developments
– As Clear Channel Outdoor is one of the leading players in the Advertising industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Advertising industry in last five years.
High cash cycle compare to competitors
Clear Channel Outdoor has a high cash cycle compare to other players in the Advertising industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Advertising industry
– The stress on hiring functional specialists at Clear Channel Outdoor has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Advertising industry, Clear Channel Outdoor 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Clear Channel Outdoor is slow explore the new channels of communication. These new channels of communication can help Clear Channel Outdoor to provide better information regarding Advertising products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Advertising industry
– because of the regulatory requirements in United States, Clear Channel Outdoor 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 Advertising industry.
Employees’ less understanding of Clear Channel Outdoor strategy
– From the outside it seems that the employees of Clear Channel Outdoor don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee of Clear Channel Outdoor is just above the Advertising 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.
Clear Channel Outdoor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Clear Channel Outdoor are -
Learning at scale
– Online learning technologies has now opened space for Clear Channel Outdoor 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 Clear Channel Outdoor to increase its market reach. Clear Channel Outdoor 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 Clear Channel Outdoor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Clear Channel Outdoor is facing challenges because of the dominance of functional experts in the organization. Clear Channel Outdoor can utilize new technology in the field of Advertising industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Clear Channel Outdoor can improve the customer journey of consumers in the Advertising 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.
Creating value in data economy
– The success of analytics program of Clear Channel Outdoor has opened avenues for new revenue streams for the organization in Advertising industry. This can help Clear Channel Outdoor to build a more holistic ecosystem for Clear Channel Outdoor products in the Advertising industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Clear Channel Outdoor can use these opportunities to build new business models that can help the communities that Clear Channel Outdoor operates in. Secondly it can use opportunities from government spending in Advertising sector.
Developing new processes and practices
– Clear Channel Outdoor can develop new processes and procedures in Advertising 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Clear Channel Outdoor in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Advertising industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Advertising industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Clear Channel Outdoor in the Advertising industry. Now Clear Channel Outdoor can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Clear Channel Outdoor 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 Clear Channel Outdoor to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Clear Channel Outdoor 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 Clear Channel Outdoor to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Advertising industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Clear Channel Outdoor 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. Clear Channel Outdoor 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.
Threats Clear Channel Outdoor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Clear Channel Outdoor are -
Technology acceleration in Forth Industrial Revolution
– Clear Channel Outdoor has witnessed rapid integration of technology during Covid-19 in the Advertising industry. As one of the leading players in the industry, Clear Channel Outdoor needs to keep up with the evolution of technology in the Advertising 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Clear Channel Outdoor in Advertising industry. The Advertising industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Clear Channel Outdoor
– 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 Clear Channel Outdoor.
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 Clear Channel Outdoor is facing in Advertising sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Clear Channel Outdoor may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Advertising sector.
Stagnating economy with rate increase
– Clear Channel Outdoor 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 Advertising industry.
High dependence on third party suppliers
– Clear Channel Outdoor 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.
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. Clear Channel Outdoor 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.
Easy access to finance
– Easy access to finance in Advertising industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Clear Channel Outdoor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Clear Channel Outdoor needs to understand the core reasons impacting the Advertising industry. This will help it in building a better workplace.
Environmental challenges
– Clear Channel Outdoor 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. Clear Channel Outdoor can take advantage of this fund but it will also bring new competitors in the Advertising industry.
Weighted SWOT Analysis of Clear Channel Outdoor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Clear Channel Outdoor 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 Clear Channel Outdoor 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 Clear Channel Outdoor 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 Clear Channel Outdoor 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 Clear Channel Outdoor needs to make to build a sustainable competitive advantage.