Regal Entertainment Group SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Regal Entertainment Group managers to do a situational analysis of the organization . It is a useful technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Regal Entertainment Group is facing in its current business environment.

The Regal Entertainment Group is one of the leading organizatations in its industry. Regal Entertainment Group maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Regal Entertainment Group to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Regal Entertainment Group strengths, and eradicate its weaknesses.

Step by Step Guide to Regal Entertainment Group SWOT Analysis

Strengths of Regal Entertainment Group – Internal Strategic Factors

As one of the leading firms in its industry, Regal Entertainment Group has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Regal Entertainment Group are –

• Successful track record of developing new products – product innovation.
• Strong Brand Portfolio – Over the years Regal Entertainment Group has invested in building a strong brand portfolio. The SWOT analysis of Regal Entertainment Group just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Good Returns on Capital Expenditure – Regal Entertainment Group is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Strong Free Cash Flow – Regal Entertainment Group has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Automation of activities brought consistency of quality to Regal Entertainment Group products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong distribution network – Over the years Regal Entertainment Group has built a reliable distribution network that can reach majority of its potential market.

Weakness of Regal Entertainment Group – Internal Strategic Factors

Weakness are the areas where Regal Entertainment Group can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

• Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Regal Entertainment Group
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Regal Entertainment Group is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• High attrition rate in work force – compare to other organizations in the industry Regal Entertainment Group has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
• The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Regal Entertainment Group has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• The profitability ratio and Net Contribution % of Regal Entertainment Group are below the industry average.

Opportunities for Regal Entertainment Group – External Strategic Factors

• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Regal Entertainment Group’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
• The new technology provides an opportunity to Regal Entertainment Group to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• Government green drive also opens an opportunity for procurement of Regal Entertainment Group products by the state as well as federal government contractors.
• New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Regal Entertainment Group. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Regal Entertainment Group.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Regal Entertainment Group to capture new customers and increase its market share.
• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
• New trends in the consumer behavior can open up new market for the Regal Entertainment Group . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Regal Entertainment Group Facing - External Strategic Factors

• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Regal Entertainment Group   in those markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Regal Entertainment Group
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
• Liability laws in different countries are different and Regal Entertainment Group may be exposed to various liability claims given change in policies in those markets.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Regal Entertainment Group

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Regal Entertainment Group
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Regal Entertainment Group

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Regal Entertainment Group managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Regal Entertainment Group

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

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References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)