Entercom (ETM) SWOT Analysis / TOWS Matrix / MBA Resources
Broadcasting & Cable TV
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Entercom (United States)
Based on various researches at Oak Spring University , Entercom is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Entercom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Entercom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Entercom 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 Entercom can be done for the following purposes –
1. Strategic planning of Entercom
2. Improving business portfolio management of Entercom
3. Assessing feasibility of the new initiative in United States
4. Making a Broadcasting & Cable TV sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Entercom
Strengths of Entercom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Entercom are -
Effective Research and Development (R&D)
– Entercom has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Entercom staying ahead in the Broadcasting & Cable TV industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Entercom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Broadcasting & Cable TV industry. Secondly the value chain collaborators of Entercom have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Entercom 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.
Digital Transformation in Broadcasting & Cable TV industry
- digital transformation varies from industry to industry. For Entercom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Entercom 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 Broadcasting & Cable TV industry
– Entercom has clearly differentiated products in the market place. This has enabled Entercom to fetch slight price premium compare to the competitors in the Broadcasting & Cable TV industry. The sustainable margins have also helped Entercom to invest into research and development (R&D) and innovation.
Analytics focus
– Entercom 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 Broadcasting & Cable TV 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.
Operational resilience
– The operational resilience strategy of Entercom comprises – understanding the underlying the factors in the Broadcasting & Cable TV 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
– Entercom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Entercom 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.
Ability to recruit top talent
– Entercom is one of the leading players in the Broadcasting & Cable TV 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.
Organizational Resilience of Entercom
– The covid-19 pandemic has put organizational resilience at the centre of everthing Entercom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Entercom 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 Entercom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Entercom emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Entercom 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.
Weaknesses of Entercom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Entercom are -
High operating costs
– Compare to the competitors, Entercom has high operating costs in the Broadcasting & Cable TV industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Entercom lucrative customers.
Slow to strategic competitive environment developments
– As Entercom is one of the leading players in the Broadcasting & Cable TV industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Broadcasting & Cable TV industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Entercom, it seems that company is thinking out the frontier risks that can impact Broadcasting & Cable TV 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.
Aligning sales with marketing
– From the outside it seems that Entercom needs to have more collaboration between its sales team and marketing team. Sales professionals in the Broadcasting & Cable TV industry have deep experience in developing customer relationships. Marketing department at Entercom can leverage the sales team experience to cultivate customer relationships as Entercom is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of United States, Entercom needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Entercom ‘s star products
– The top 2 products and services of Entercom still accounts for major business revenue. This dependence on star products in Broadcasting & Cable TV industry has resulted into insufficient focus on developing new products, even though Entercom has relatively successful track record of launching new products.
Employees’ less understanding of Entercom strategy
– From the outside it seems that the employees of Entercom 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.
Slow decision making process
– As mentioned earlier in the report, Entercom has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Broadcasting & Cable TV industry over the last five years. Entercom 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.
High cash cycle compare to competitors
Entercom has a high cash cycle compare to other players in the Broadcasting & Cable TV industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Entercom is just above the Broadcasting & Cable TV 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.
Capital Spending Reduction
– Even during the low interest decade, Entercom 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 Broadcasting & Cable TV industry using digital technology.
Entercom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Entercom are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Entercom is facing challenges because of the dominance of functional experts in the organization. Entercom can utilize new technology in the field of Broadcasting & Cable TV industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Entercom 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.
Leveraging digital technologies
– Entercom 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Entercom can use these opportunities to build new business models that can help the communities that Entercom operates in. Secondly it can use opportunities from government spending in Broadcasting & Cable TV sector.
Better consumer reach
– The expansion of the 5G network will help Entercom to increase its market reach. Entercom 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.
Building a culture of innovation
– managers at Entercom 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 Broadcasting & Cable TV industry.
Manufacturing automation
– Entercom can use the latest technology developments to improve its manufacturing and designing process in Broadcasting & Cable TV sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Entercom has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Broadcasting & Cable TV sector. This continuous investment in analytics has enabled Entercom to build a competitive advantage using analytics. The analytics driven competitive advantage can help Entercom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Entercom 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 Entercom to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Entercom 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.
Use of Bitcoin and other crypto currencies for transactions in Broadcasting & Cable TV industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Entercom in the Broadcasting & Cable TV industry. Now Entercom can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Broadcasting & Cable TV industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Entercom 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. Entercom 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.
Learning at scale
– Online learning technologies has now opened space for Entercom 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.
Threats Entercom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Entercom 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 Entercom business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Entercom 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, Entercom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Broadcasting & Cable TV sector.
Environmental challenges
– Entercom 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. Entercom can take advantage of this fund but it will also bring new competitors in the Broadcasting & Cable TV industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Entercom 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 Entercom prominent markets.
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 Entercom in the Broadcasting & Cable TV sector and impact the bottomline 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 Entercom.
Shortening product life cycle
– it is one of the major threat that Entercom is facing in Broadcasting & Cable TV sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Entercom in Broadcasting & Cable TV industry. The Broadcasting & Cable TV 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.
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.
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. Entercom needs to understand the core reasons impacting the Broadcasting & Cable TV industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Broadcasting & Cable TV industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Entercom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Entercom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Entercom 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 Entercom 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 Entercom 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 Entercom 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 Entercom needs to make to build a sustainable competitive advantage.