DHX Media (DHX) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for DHX Media (Canada)

Based on various researches at Oak Spring University , DHX Media is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of DHX Media

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that DHX Media can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the DHX Media, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which DHX Media 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of DHX Media can be done for the following purposes –
1. Strategic planning of DHX Media
2. Improving business portfolio management of DHX Media
3. Assessing feasibility of the new initiative in Canada
4. Making a Motion Pictures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of DHX Media

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Strengths of DHX Media | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of DHX Media are -

High switching costs

– The high switching costs that DHX Media 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.

High brand equity

– DHX Media has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled DHX Media to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– DHX Media is present in almost all the verticals within the Motion Pictures industry. This has provided DHX Media 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

– DHX Media is one of the leading players in the Motion Pictures industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

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

Strong track record of project management in the Motion Pictures industry

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

Training and development

– DHX Media 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.

Superior customer experience

– The customer experience strategy of DHX Media in Motion Pictures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– DHX Media is one of the most innovative firm in Motion Pictures sector.

Analytics focus

– DHX Media 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 Canada 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.

Digital Transformation in Motion Pictures industry

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

Cross disciplinary teams

– Horizontal connected teams at the DHX Media 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.

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Weaknesses of DHX Media | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of DHX Media are -

No frontier risks strategy

– From the 10K / annual statement of DHX Media, 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.

Products dominated business model

– Even though DHX Media has some of the most successful models in the Motion Pictures industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. DHX Media should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

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

Compensation and incentives

– The revenue per employee of DHX Media 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.

Slow decision making process

– As mentioned earlier in the report, DHX Media has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Motion Pictures industry over the last five years. DHX Media 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 dependence on DHX Media ‘s star products

– The top 2 products and services of DHX Media still accounts for major business revenue. This dependence on star products in Motion Pictures industry has resulted into insufficient focus on developing new products, even though DHX Media has relatively successful track record of launching new products.

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 DHX Media supply chain. Even after few cautionary changes, DHX Media is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left DHX Media vulnerable to further global disruptions in South East Asia.

Ability to respond to the competition

– As the decision making is very deliberative at DHX Media, in the dynamic environment of Motion Pictures industry it has struggled to respond to the nimble upstart competition. DHX Media has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High bargaining power of channel partners in Motion Pictures industry

– because of the regulatory requirements in Canada, DHX Media 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 Motion Pictures industry.

High cash cycle compare to competitors

DHX Media 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.

Increasing silos among functional specialists

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

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DHX Media Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of DHX Media are -

Manufacturing automation

– DHX Media can use the latest technology developments to improve its manufacturing and designing process in Motion Pictures 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for DHX Media 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.

Better consumer reach

– The expansion of the 5G network will help DHX Media to increase its market reach. DHX Media 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for DHX Media 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 DHX Media to hire the very best people irrespective of their geographical location.

Low interest rates

– Even though inflation is raising its head in most developed economies, DHX Media 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, DHX Media can use these opportunities to build new business models that can help the communities that DHX Media operates in. Secondly it can use opportunities from government spending in Motion Pictures sector.

Leveraging digital technologies

– DHX Media 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.

Finding new ways to collaborate

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

Use of Bitcoin and other crypto currencies for transactions in Motion Pictures industry

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, DHX Media 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 DHX Media to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Building a culture of innovation

– managers at DHX Media 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 Motion Pictures industry.

Developing new processes and practices

– DHX Media can develop new processes and procedures in Motion Pictures 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.

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 DHX Media 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.

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Threats DHX Media External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of DHX Media are -

Increasing wage structure of DHX Media

– 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 DHX Media.

Consumer confidence and its impact on DHX Media 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.

Stagnating economy with rate increase

– DHX Media 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 Motion Pictures industry.

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 DHX Media business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that DHX Media is facing in Motion Pictures sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 DHX Media.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, DHX Media 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 DHX Media 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. DHX Media 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 Motion Pictures industry are lowering. It can presents DHX Media with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Motion Pictures sector.

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 DHX Media in the Motion Pictures sector and impact the bottomline of the organization.

Environmental challenges

– DHX Media 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. DHX Media can take advantage of this fund but it will also bring new competitors in the Motion Pictures 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.

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. DHX Media needs to understand the core reasons impacting the Motion Pictures industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of DHX Media Template, Example

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

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