Technicolor (TCH) SWOT Analysis / TOWS Matrix / MBA Resources
Motion Pictures
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Technicolor (France)
Based on various researches at Oak Spring University , Technicolor is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
wage bills are increasing, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Technicolor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Technicolor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Technicolor 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 Technicolor can be done for the following purposes –
1. Strategic planning of Technicolor
2. Improving business portfolio management of Technicolor
3. Assessing feasibility of the new initiative in France
4. Making a Motion Pictures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Technicolor
Strengths of Technicolor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Technicolor are -
High brand equity
– Technicolor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Technicolor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Motion Pictures
– Technicolor is one of the leading players in the Motion Pictures industry in France. Over the years it has not only transformed the business landscape in the Motion Pictures industry in France but also across the existing markets. The ability to lead change has enabled Technicolor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Technicolor in the Services sector have low bargaining power. Technicolor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Technicolor to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Technicolor 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 France 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.
Operational resilience
– The operational resilience strategy of Technicolor 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.
Training and development
– Technicolor 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.
Highly skilled collaborators
– Technicolor 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 Technicolor have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Technicolor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Technicolor 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.
Sustainable margins compare to other players in Motion Pictures industry
– Technicolor has clearly differentiated products in the market place. This has enabled Technicolor to fetch slight price premium compare to the competitors in the Motion Pictures industry. The sustainable margins have also helped Technicolor to invest into research and development (R&D) and innovation.
Innovation driven organization
– Technicolor is one of the most innovative firm in Motion Pictures sector.
Organizational Resilience of Technicolor
– The covid-19 pandemic has put organizational resilience at the centre of everthing Technicolor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Technicolor 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 Technicolor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Technicolor emphasize – knowledge, initiative, and innovation.
Weaknesses of Technicolor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Technicolor are -
Aligning sales with marketing
– From the outside it seems that Technicolor 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 Technicolor can leverage the sales team experience to cultivate customer relationships as Technicolor is planning to shift buying processes online.
Lack of clear differentiation of Technicolor products
– To increase the profitability and margins on the products, Technicolor needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Technicolor 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 Technicolor lucrative customers.
Products dominated business model
– Even though Technicolor 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. Technicolor should strive to include more intangible value offerings along with its core products and services.
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 Technicolor supply chain. Even after few cautionary changes, Technicolor is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Technicolor vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Technicolor 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. Technicolor 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 cash cycle compare to competitors
Technicolor 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Technicolor is slow explore the new channels of communication. These new channels of communication can help Technicolor to provide better information regarding Motion Pictures products and services. It can also build an online community to further reach out to potential customers.
High dependence on Technicolor ‘s star products
– The top 2 products and services of Technicolor 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 Technicolor has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Technicolor 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 strategic competitive environment developments
– As Technicolor 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.
Technicolor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Technicolor are -
Developing new processes and practices
– Technicolor 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 Technicolor 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.
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. Technicolor 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. Technicolor 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.
Creating value in data economy
– The success of analytics program of Technicolor has opened avenues for new revenue streams for the organization in Motion Pictures industry. This can help Technicolor to build a more holistic ecosystem for Technicolor 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
– Technicolor 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 Technicolor to build a competitive advantage using analytics. The analytics driven competitive advantage can help Technicolor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Technicolor in the Motion Pictures industry. Now Technicolor can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Technicolor 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 Technicolor to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Technicolor to increase its market reach. Technicolor 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.
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. Technicolor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Technicolor 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.
Learning at scale
– Online learning technologies has now opened space for Technicolor 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 Technicolor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Technicolor 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.
Threats Technicolor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Technicolor are -
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. Technicolor 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 Technicolor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Motion Pictures sector.
Consumer confidence and its impact on Technicolor 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.
Increasing wage structure of Technicolor
– 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 Technicolor.
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. Technicolor 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.
Stagnating economy with rate increase
– Technicolor 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Technicolor 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 Technicolor prominent markets.
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.
Shortening product life cycle
– it is one of the major threat that Technicolor is facing in Motion Pictures sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Technicolor in the Motion Pictures sector and impact the bottomline of the organization.
Environmental challenges
– Technicolor 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. Technicolor can take advantage of this fund but it will also bring new competitors in the Motion Pictures industry.
Regulatory challenges
– Technicolor 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Technicolor 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.
Weighted SWOT Analysis of Technicolor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Technicolor 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 Technicolor 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 Technicolor 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 Technicolor 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 Technicolor needs to make to build a sustainable competitive advantage.