Cedar Fair LP (FUN) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Cedar Fair LP (United States)

Based on various researches at Oak Spring University , Cedar Fair LP is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, there is backlash against globalization, supply chains are disrupted by pandemic , increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing commodity prices, etc

---

---

---

---

Introduction to SWOT Analysis of Cedar Fair LP

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cedar Fair LP can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cedar Fair LP, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cedar Fair LP 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 Cedar Fair LP can be done for the following purposes –
1. Strategic planning of Cedar Fair LP
2. Improving business portfolio management of Cedar Fair LP
3. Assessing feasibility of the new initiative in United States
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cedar Fair LP

---

Strengths of Cedar Fair LP | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Cedar Fair LP are -

Diverse revenue streams

– Cedar Fair LP is present in almost all the verticals within the Recreational Activities industry. This has provided Cedar Fair LP 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.

Strong track record of project management in the Recreational Activities industry

– Cedar Fair LP is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- Cedar Fair LP 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 Cedar Fair LP is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cedar Fair LP emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– Cedar Fair LP has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Recreational Activities industry. Secondly the value chain collaborators of Cedar Fair LP have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– Cedar Fair LP is one of the most innovative firm in Recreational Activities sector.

Superior customer experience

– The customer experience strategy of Cedar Fair LP in Recreational Activities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Cedar Fair LP 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 Recreational Activities 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.

Effective Research and Development (R&D)

– Cedar Fair LP has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cedar Fair LP 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.

Low bargaining power of suppliers

– Suppliers of Cedar Fair LP in the Services sector have low bargaining power. Cedar Fair LP has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cedar Fair LP to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Recreational Activities industry

- digital transformation varies from industry to industry. For Cedar Fair LP digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cedar Fair LP 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.

High switching costs

– The high switching costs that Cedar Fair LP 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.

Sustainable margins compare to other players in Recreational Activities industry

– Cedar Fair LP has clearly differentiated products in the market place. This has enabled Cedar Fair LP to fetch slight price premium compare to the competitors in the Recreational Activities industry. The sustainable margins have also helped Cedar Fair LP to invest into research and development (R&D) and innovation.

---

---

Weaknesses of Cedar Fair LP | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Cedar Fair LP are -

Slow decision making process

– As mentioned earlier in the report, Cedar Fair LP 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. Cedar Fair LP 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.

Slow to strategic competitive environment developments

– As Cedar Fair LP is one of the leading players in the Recreational Activities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Recreational Activities industry in last five years.

Products dominated business model

– Even though Cedar Fair LP 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. Cedar Fair LP should strive to include more intangible value offerings along with its core products and services.

Compensation and incentives

– The revenue per employee of Cedar Fair LP is just above the Recreational Activities 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.

Employees’ less understanding of Cedar Fair LP strategy

– From the outside it seems that the employees of Cedar Fair LP 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.

High cash cycle compare to competitors

Cedar Fair LP 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.

Interest costs

– Compare to the competition, Cedar Fair LP 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cedar Fair LP is slow explore the new channels of communication. These new channels of communication can help Cedar Fair LP to provide better information regarding Recreational Activities products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

– From the outside it seems that Cedar Fair LP needs to have more collaboration between its sales team and marketing team. Sales professionals in the Recreational Activities industry have deep experience in developing customer relationships. Marketing department at Cedar Fair LP can leverage the sales team experience to cultivate customer relationships as Cedar Fair LP is planning to shift buying processes online.

Increasing silos among functional specialists

– The organizational structure of Cedar Fair LP is dominated by functional specialists. It is not different from other players in the Recreational Activities industry, but Cedar Fair LP needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cedar Fair LP to focus more on services in the Recreational Activities industry rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the Recreational Activities industry, Cedar Fair LP 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.

---

Cedar Fair LP Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Cedar Fair LP are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Recreational Activities industry, but it has also influenced the consumer preferences. Cedar Fair LP can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Low interest rates

– Even though inflation is raising its head in most developed economies, Cedar Fair LP 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, Cedar Fair LP can use these opportunities to build new business models that can help the communities that Cedar Fair LP operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.

Learning at scale

– Online learning technologies has now opened space for Cedar Fair LP 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Cedar Fair LP 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 in Recreational Activities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cedar Fair LP in the Recreational Activities industry. Now Cedar Fair LP can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Cedar Fair LP is facing challenges because of the dominance of functional experts in the organization. Cedar Fair LP can utilize new technology in the field of Recreational Activities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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. Cedar Fair LP can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Cedar Fair LP 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 Cedar Fair LP 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

– Cedar Fair LP 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.

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 Cedar Fair LP 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.

Creating value in data economy

– The success of analytics program of Cedar Fair LP has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help Cedar Fair LP to build a more holistic ecosystem for Cedar Fair LP products in the Recreational Activities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Developing new processes and practices

– Cedar Fair LP 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.

---

Threats Cedar Fair LP External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Cedar Fair LP 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 Cedar Fair LP business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Recreational Activities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cedar Fair LP can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Recreational Activities industry are lowering. It can presents Cedar Fair LP with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Activities sector.

Technology acceleration in Forth Industrial Revolution

– Cedar Fair LP has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, Cedar Fair LP 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.

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 Cedar Fair LP.

Stagnating economy with rate increase

– Cedar Fair LP 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.

Increasing wage structure of Cedar Fair LP

– 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 Cedar Fair LP.

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 Cedar Fair LP in the Recreational Activities sector and impact the bottomline of the organization.

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

– Cedar Fair LP 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. Cedar Fair LP can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.

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 Cedar Fair LP is facing in Recreational Activities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Cedar Fair LP 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.

---

Weighted SWOT Analysis of Cedar Fair LP Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cedar Fair LP 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 Cedar Fair LP 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 Cedar Fair LP 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 Cedar Fair LP 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 Cedar Fair LP needs to make to build a sustainable competitive advantage.

--- ---