SeaWorld Entertainment (SEAS) SWOT Analysis / TOWS Matrix / MBA Resources
Recreational Activities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SeaWorld Entertainment (United States)
Based on various researches at Oak Spring University , SeaWorld Entertainment is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing commodity prices, there is backlash against globalization, technology disruption, cloud computing is disrupting traditional business models, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of SeaWorld Entertainment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SeaWorld Entertainment can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SeaWorld Entertainment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SeaWorld Entertainment 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 SeaWorld Entertainment can be done for the following purposes –
1. Strategic planning of SeaWorld Entertainment
2. Improving business portfolio management of SeaWorld Entertainment
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 SeaWorld Entertainment
Strengths of SeaWorld Entertainment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SeaWorld Entertainment are -
High switching costs
– The high switching costs that SeaWorld Entertainment 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.
Successful track record of launching new products
– SeaWorld Entertainment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SeaWorld Entertainment 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.
Superior customer experience
– The customer experience strategy of SeaWorld Entertainment in Recreational Activities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– SeaWorld Entertainment 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.
Ability to lead change in Recreational Activities
– SeaWorld Entertainment is one of the leading players in the Recreational Activities industry in United States. Over the years it has not only transformed the business landscape in the Recreational Activities industry in United States but also across the existing markets. The ability to lead change has enabled SeaWorld Entertainment in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– SeaWorld Entertainment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SeaWorld Entertainment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– SeaWorld Entertainment is one of the most innovative firm in Recreational Activities sector.
Digital Transformation in Recreational Activities industry
- digital transformation varies from industry to industry. For SeaWorld Entertainment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SeaWorld Entertainment 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.
Diverse revenue streams
– SeaWorld Entertainment is present in almost all the verticals within the Recreational Activities industry. This has provided SeaWorld Entertainment 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.
Sustainable margins compare to other players in Recreational Activities industry
– SeaWorld Entertainment has clearly differentiated products in the market place. This has enabled SeaWorld Entertainment to fetch slight price premium compare to the competitors in the Recreational Activities industry. The sustainable margins have also helped SeaWorld Entertainment to invest into research and development (R&D) and innovation.
Strong track record of project management in the Recreational Activities industry
– SeaWorld Entertainment is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of SeaWorld Entertainment
– The covid-19 pandemic has put organizational resilience at the centre of everthing SeaWorld Entertainment does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of SeaWorld Entertainment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SeaWorld Entertainment are -
Products dominated business model
– Even though SeaWorld Entertainment 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. SeaWorld Entertainment should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of SeaWorld Entertainment strategy
– From the outside it seems that the employees of SeaWorld Entertainment 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.
Skills based hiring in Recreational Activities industry
– The stress on hiring functional specialists at SeaWorld Entertainment 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.
Slow to strategic competitive environment developments
– As SeaWorld Entertainment 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.
Slow decision making process
– As mentioned earlier in the report, SeaWorld Entertainment 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. SeaWorld Entertainment 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 operating costs
– Compare to the competitors, SeaWorld Entertainment has high operating costs in the Recreational Activities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SeaWorld Entertainment lucrative customers.
Lack of clear differentiation of SeaWorld Entertainment products
– To increase the profitability and margins on the products, SeaWorld Entertainment needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at SeaWorld Entertainment, in the dynamic environment of Recreational Activities industry it has struggled to respond to the nimble upstart competition. SeaWorld Entertainment has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of SeaWorld Entertainment 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.
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 SeaWorld Entertainment supply chain. Even after few cautionary changes, SeaWorld Entertainment is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SeaWorld Entertainment vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of SeaWorld Entertainment, it seems that company is thinking out the frontier risks that can impact Recreational Activities 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.
SeaWorld Entertainment Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SeaWorld Entertainment are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for SeaWorld Entertainment in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Activities industry, and it will provide faster access to the consumers.
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. SeaWorld Entertainment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of SeaWorld Entertainment has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help SeaWorld Entertainment to build a more holistic ecosystem for SeaWorld Entertainment 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
– SeaWorld Entertainment 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.
Using analytics as competitive advantage
– SeaWorld Entertainment has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Activities sector. This continuous investment in analytics has enabled SeaWorld Entertainment to build a competitive advantage using analytics. The analytics driven competitive advantage can help SeaWorld Entertainment 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, SeaWorld Entertainment 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 SeaWorld Entertainment to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SeaWorld Entertainment can use these opportunities to build new business models that can help the communities that SeaWorld Entertainment operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.
Buying journey improvements
– SeaWorld Entertainment can improve the customer journey of consumers in the Recreational Activities 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.
Manufacturing automation
– SeaWorld Entertainment can use the latest technology developments to improve its manufacturing and designing process in Recreational Activities 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.
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. SeaWorld Entertainment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at SeaWorld Entertainment 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 Recreational Activities industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, SeaWorld Entertainment 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.
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 SeaWorld Entertainment in the Recreational Activities industry. Now SeaWorld Entertainment can target international markets with far fewer capital restrictions requirements than the existing system.
Threats SeaWorld Entertainment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SeaWorld Entertainment are -
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 SeaWorld Entertainment in the Recreational Activities sector and impact the bottomline of the organization.
Environmental challenges
– SeaWorld Entertainment 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. SeaWorld Entertainment can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Recreational Activities industry are lowering. It can presents SeaWorld Entertainment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Activities sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SeaWorld Entertainment 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 SeaWorld Entertainment prominent markets.
Stagnating economy with rate increase
– SeaWorld Entertainment 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.
High dependence on third party suppliers
– SeaWorld Entertainment 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.
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. SeaWorld Entertainment 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.
Consumer confidence and its impact on SeaWorld Entertainment 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 Recreational Activities industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SeaWorld Entertainment in Recreational Activities industry. The Recreational Activities 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 acceleration in Forth Industrial Revolution
– SeaWorld Entertainment has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, SeaWorld Entertainment 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.
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 SeaWorld Entertainment business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– SeaWorld Entertainment 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 Recreational Activities industry regulations.
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 SeaWorld Entertainment.
Weighted SWOT Analysis of SeaWorld Entertainment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SeaWorld Entertainment 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 SeaWorld Entertainment 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 SeaWorld Entertainment 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 SeaWorld Entertainment 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 SeaWorld Entertainment needs to make to build a sustainable competitive advantage.