AMC Networks Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The AMC Networks Inc. is one of the leading companies in its industry. AMC Networks Inc. 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 company such as – marketing, finance, operations, management information systems and strategic planning.


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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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the AMC Networks Inc. 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 primary purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect AMC Networks Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to AMC Networks Inc. SWOT Analysis

Strengths of AMC Networks Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, AMC Networks Inc. 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 AMC Networks Inc. are –

Read - AMC Networks Inc. Porter 5 Forces Analysis & Industry Analysis
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• Strong Free Cash Flow – AMC Networks Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong distribution network – Over the years AMC Networks Inc. has built a reliable distribution network that can reach majority of its potential market.
• Good Returns on Capital Expenditure – AMC Networks Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• Successful track record of developing new products – product innovation.
• Automation of activities brought consistency of quality to AMC Networks Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Highly skilled workforce through successful training and learning programs. AMC Networks Inc. 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.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

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Weakness of AMC Networks Inc. – Internal Strategic Factors

Weakness are the areas where AMC Networks Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• 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.
• Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that AMC Networks Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Investment in Research and Development is below the fastest growing players in the industry. Even though AMC Networks Inc. 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 AMC Networks Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• The profitability ratio and Net Contribution % of AMC Networks Inc. are below the industry average.
• Limited success outside core business – Even though AMC Networks Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though AMC Networks Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for AMC Networks Inc. – External Strategic Factors

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• 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 AMC Networks Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• 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 AMC Networks Inc. to drive home its advantage in new technology and gain market share in the new product category.
• 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.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided AMC Networks Inc. 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 AMC Networks Inc..
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for AMC Networks Inc. to capture new customers and increase its market share.
• 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 AMC Networks Inc. in other product categories.
• The market development will lead to dilution of competitor’s advantage and enable AMC Networks Inc. to increase its competitiveness compare to the other competitors.

Threats AMC Networks Inc. Facing - External Strategic Factors

• As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
• 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.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for AMC Networks Inc.   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 AMC Networks Inc.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Rising raw material can pose a threat to the AMC Networks Inc. profitability.

Limitations of SWOT Analysis for AMC Networks Inc.

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 AMC Networks Inc.
• 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.

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Weighted SWOT Analysis of AMC Networks Inc.

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 AMC Networks Inc. 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 AMC Networks Inc.

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)