Point.360 (PTSXQ) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Point.360 (United States)

Based on various researches at Oak Spring University , Point.360 is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , there is backlash against globalization, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Point.360

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Point.360 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Point.360, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Point.360 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 Point.360 can be done for the following purposes –
1. Strategic planning of Point.360
2. Improving business portfolio management of Point.360
3. Assessing feasibility of the new initiative in United States
4. Making a Motion Pictures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Point.360

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Strengths of Point.360 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Point.360 are -

Sustainable margins compare to other players in Motion Pictures industry

– Point.360 has clearly differentiated products in the market place. This has enabled Point.360 to fetch slight price premium compare to the competitors in the Motion Pictures industry. The sustainable margins have also helped Point.360 to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– Point.360 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Point.360 staying ahead in the Motion Pictures industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Organizational Resilience of Point.360

– The covid-19 pandemic has put organizational resilience at the centre of everthing Point.360 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

High switching costs

– The high switching costs that Point.360 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.

Diverse revenue streams

– Point.360 is present in almost all the verticals within the Motion Pictures industry. This has provided Point.360 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.

Superior customer experience

– The customer experience strategy of Point.360 in Motion Pictures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Point.360 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 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.

Low bargaining power of suppliers

– Suppliers of Point.360 in the Services sector have low bargaining power. Point.360 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Point.360 to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Point.360 is one of the leading players in the Motion Pictures 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.

Innovation driven organization

– Point.360 is one of the most innovative firm in Motion Pictures sector.

Ability to lead change in Motion Pictures

– Point.360 is one of the leading players in the Motion Pictures industry in United States. Over the years it has not only transformed the business landscape in the Motion Pictures industry in United States but also across the existing markets. The ability to lead change has enabled Point.360 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Cross disciplinary teams

– Horizontal connected teams at the Point.360 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 Point.360 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Point.360 are -

High operating costs

– Compare to the competitors, Point.360 has high operating costs in the Motion Pictures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Point.360 lucrative customers.

Aligning sales with marketing

– From the outside it seems that Point.360 needs to have more collaboration between its sales team and marketing team. Sales professionals in the Motion Pictures industry have deep experience in developing customer relationships. Marketing department at Point.360 can leverage the sales team experience to cultivate customer relationships as Point.360 is planning to shift buying processes online.

Lack of clear differentiation of Point.360 products

– To increase the profitability and margins on the products, Point.360 needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– Point.360 has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Products dominated business model

– Even though Point.360 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. Point.360 should strive to include more intangible value offerings along with its core products and services.

High dependence on Point.360 ‘s star products

– The top 2 products and services of Point.360 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 Point.360 has relatively successful track record of launching new products.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Point.360 is slow explore the new channels of communication. These new channels of communication can help Point.360 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 Point.360 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.

Workers concerns about automation

– As automation is fast increasing in the Motion Pictures industry, Point.360 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.

Skills based hiring in Motion Pictures industry

– The stress on hiring functional specialists at Point.360 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.

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 Point.360 supply chain. Even after few cautionary changes, Point.360 is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Point.360 vulnerable to further global disruptions in South East Asia.

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Point.360 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Point.360 are -

Using analytics as competitive advantage

– Point.360 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 Point.360 to build a competitive advantage using analytics. The analytics driven competitive advantage can help Point.360 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 Point.360 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.

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. Point.360 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Point.360 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Point.360 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. Point.360 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.

Leveraging digital technologies

– Point.360 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, Point.360 can use these opportunities to build new business models that can help the communities that Point.360 operates in. Secondly it can use opportunities from government spending in Motion Pictures sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Point.360 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.

Buying journey improvements

– Point.360 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.

Better consumer reach

– The expansion of the 5G network will help Point.360 to increase its market reach. Point.360 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.

Learning at scale

– Online learning technologies has now opened space for Point.360 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Point.360 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Point.360 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 Point.360 to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Point.360 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Point.360 are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Motion Pictures industry are lowering. It can presents Point.360 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Motion Pictures sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Point.360 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 Point.360 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. Point.360 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Point.360 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.

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. Point.360 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.

Shortening product life cycle

– it is one of the major threat that Point.360 is facing in Motion Pictures 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, Point.360 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 acceleration in Forth Industrial Revolution

– Point.360 has witnessed rapid integration of technology during Covid-19 in the Motion Pictures industry. As one of the leading players in the industry, Point.360 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.

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 Point.360.

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.

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.

Consumer confidence and its impact on Point.360 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

– Point.360 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.

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Weighted SWOT Analysis of Point.360 Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Point.360 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 Point.360 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 Point.360 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 Point.360 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 Point.360 needs to make to build a sustainable competitive advantage.

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