Time Warner SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Time Warner managers to do a situational analysis of the organization . It is an important technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Time Warner is facing in its current business environment.

The Time Warner is one of the leading companies in its industry. Time Warner maintains its prominent position in market by critically 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 enables 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 called SWOT Matrix.

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

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Time Warner swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Time Warner strengths, and eradicate its weaknesses.

Step by Step Guide to Time Warner SWOT Analysis

Strengths of Time Warner – Internal Strategic Factors

As one of the leading companies in its industry, Time Warner has numerous strengths that enable 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 Time Warner are –

  • Strong distribution network – Over the years Time Warner has built a reliable distribution network that can reach majority of its potential market.
  • Highly successful at Go To Market strategies for its products.
  • Automation of activities brought consistency of quality to Time Warner products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Time Warner has invested in building a strong brand portfolio. The SWOT analysis of Time Warner just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Highly skilled workforce through successful training and learning programs. Time Warner is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
  • Strong Free Cash Flow – Time Warner has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • 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.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.

Weakness of Time Warner – Internal Strategic Factors

Weakness are the areas where Time Warner can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • 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.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Time Warner needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
  • Limited success outside core business – Even though Time Warner is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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 Time Warner
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Time Warner is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • 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. Time Warner has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Time Warner 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.

Opportunities for Time Warner – External Strategic Factors

  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Time Warner to increase its profitability.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Time Warner in other product categories.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Time Warner to drive home its advantage in new technology and gain market share in the new product category.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Time Warner to capture new customers and increase its market share.
  • Government green drive also opens an opportunity for procurement of Time Warner products by the state as well as federal government contractors.
  • The new technology provides an opportunity to Time Warner 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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Time Warner an opportunity to enter a new emerging market.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Time Warner.

Threats Time Warner Facing - External Strategic Factors

  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Time Warner   in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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 raw material can pose a threat to the Time Warner profitability.
  • Liability laws in different countries are different and Time Warner may be exposed to various liability claims given change in policies in those markets.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Time Warner

Limitations of SWOT Analysis for Time Warner

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 Time Warner
  • 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 Time Warner

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 Time Warner 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 Time Warner

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

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

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)