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 – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, 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 -

Operational resilience

– The operational resilience strategy of DHX Media comprises – understanding the underlying the factors in the Motion Pictures 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.

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.

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.

Highly skilled collaborators

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

Ability to lead change in Motion Pictures

– DHX Media is one of the leading players in the Motion Pictures industry in Canada. Over the years it has not only transformed the business landscape in the Motion Pictures industry in Canada but also across the existing markets. The ability to lead change has enabled DHX Media 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

– DHX Media has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. DHX Media 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.

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.

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.

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.

Sustainable margins compare to other players in Motion Pictures industry

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

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 -

Capital Spending Reduction

– Even during the low interest decade, DHX Media 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 Motion Pictures industry using digital technology.

Slow to strategic competitive environment developments

– As DHX Media is one of the leading players in the Motion Pictures industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Motion Pictures industry in last five years.

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.

Employees’ less understanding of DHX Media strategy

– From the outside it seems that the employees of DHX Media 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

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.

Lack of clear differentiation of DHX Media products

– To increase the profitability and margins on the products, DHX Media needs to provide more differentiated products than what it is currently offering in the marketplace.

Interest costs

– Compare to the competition, DHX Media 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, 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.

Low market penetration in new markets

– Outside its home market of Canada, DHX Media needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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.

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 -

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.

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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Motion Pictures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. DHX Media 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. DHX Media 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.

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.

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.

Buying journey improvements

– DHX Media can improve the customer journey of consumers in the Motion Pictures 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.

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.

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. DHX Media can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

Creating value in data economy

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

Using analytics as competitive advantage

– DHX Media has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Motion Pictures sector. This continuous investment in analytics has enabled DHX Media to build a competitive advantage using analytics. The analytics driven competitive advantage can help DHX Media to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 -

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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for DHX Media in Motion Pictures industry. The Motion Pictures 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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, DHX Media may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Motion Pictures sector.

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 dependence on third party suppliers

– DHX Media 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.

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.

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.

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.

Regulatory challenges

– DHX Media 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 Motion Pictures industry regulations.

Technology acceleration in Forth Industrial Revolution

– DHX Media has witnessed rapid integration of technology during Covid-19 in the Motion Pictures industry. As one of the leading players in the industry, DHX Media needs to keep up with the evolution of technology in the Motion Pictures 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.

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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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