North State AV SWOT Analysis
North State AV is a leading and highly experienced rental staging company and a provider of professional audiovisual services with an experience of more than 25 years in the industry. The company lacks a stable revenue stream, and as per the information from Zoom Info, the company's top line has been extremely erratic and unstable over the past quarters and is expected to be more or less static, lacking substantial growth.
- The company is a leading and highly experienced rental staging company and a provider of professional audiovisual services with an experience of more than 25 years in the industry.
- The company is known for its unparalleled quality and technical expertise and has competencies to cater to a wide array of events such as concerts, festivals and fairs, sporting events, charity events, graduations, proms, weddings, and corporate events for its clients throughout Northern California.
- North State AV has an "extensive inventory of high-end audio, video, and lighting equipment," along with a team of highly experienced and top technicians and engineers of the region that allows it to create events that are "visually stunning, masterfully engineered, and perfectly executed."
- The company has a reliable and wide client base, including most of the area's largest and most demanding organizations, and handles more local events than any other company in the region.
- Another key strength of the company is its ability to custom design large as well as small events for its clients and provide state-of-the-art production packages at affordable pricing.
- It has a wide range of expertise to undertake events as large as Facebook’s company picnic and as small as a backyard wedding. This flexibility of operations acts as a key strength of the company.
- The company is "fully licensed and bonded C-10 Electrical Contractors, certified Riggers and CM Lodestar certified service professionals that allow it to legally and skillfully hang, rig, and connect its systems to in-house grids and power sources." This is a key strength and competitive edge for the company as none of the competitors operating in the region wield such certifications and licenses.
- The company enjoys extremely positive client reviews and ratings and is rated as 5 on Yelp and 4.9/5 on its Facebook Page. It is highly recommended by its clients across the industries and is regarded as a skilled, reliable, and professional company with top-notch equipment and amicable and professional engineers.
- The company, although it operates as a strong regional player, lacks a national presence and has its operations and presence limited to just Northern California. This limits the revenue potential of the company and also makes it susceptible to national competition.
- The company lacks a stable revenue stream, and as per the information from Zoom Info, the company's top line has been very erratic and unstable over the past quarters and is expected to be more or less static, lacking substantial growth.
- The company is in a cyclical business and lacks any significant operational diversification that hampers its capacity to have a stable stream of cash flows throughout the year.
- The above is corroborated by the fact that its revenues fell from $7.0 million in Q2'18 to $1.6 million in Q3'18 and then rose to $6.2 million in Q4'18.
- In Q1'19 the revenues again fell to $5.4 million and further to $5.2 million in Q2'19. Q3'19 and Q4'19 are expected to generate flat revenues for the company as per estimates from Zoom Info.
- The company lacks an aggressive digital marketing approach and is devoid of any major presence across the various social media platforms. The company's LinkedIn page features no posts and interactions by the company, and its Facebook and Twitter pages have just 700 and 1,400 followers, respectively. This hampers its capability to reach and engage clients at a national level.
- There are no major advertising campaigns or marketing events that could be located for the company either on its social media platforms or in public.
- As per the ARA forecasts, the US Equipment and Event Rental industry is expected to witness a consistent growth over the coming years and reach $64 billion in 2022.
- The US party and special event segment, which is most relevant for the company, is expected to witness consistent growth of 6.5% in 2019, 6.2% in 2020, and 1.1% each in 2021 and 2022. Such a growing industry presents an unbridled expansion opportunity for the company.
- The stage lighting market, which is another key operating segment for the company, is expected to reach revenues of approximately $3 billion by 2023, growing at a CAGR of around 4%from 2017 to 2023 globally with North America leading the growth during the forecast period. This expanding segment again presents an excellent growth opportunity for the company.
- The company has a very strong but limited presence, confined mainly to Northern California and, hence has an opportunity to undertake capital expenditure and expand its operations in the state and eventually nationally either through partnerships or through the M&A route.
- The company also has an opportunity to diversify and enhance its product technology to include modern industry trends such as 'Virtual and Augmented Reality', 'No Control Panels', 'Video of Things (VoT)', 'AV Distributed by IP' etc. Such aggrandization would not only result in enhanced revenues but also enhanced client base, including large organizations such as Fortune 500.
- The increasing competition from regional and especially big national players is a major threat to the company. With limited presence and limited expansion capabilities, the company may become a prime target for acquisition by some big national players.
- The company's operations are extremely cyclical in nature as corroborated by its revenue stream, and hence an extended spell of economic or industrial downturn may expose the company to cash flow problems and working capital challenges.
- As per IBIS World, personal disposable income levels are a key driver of the industry revenues, and hence any sharp decline in the same due to expected recession in the US can lead to dwindling revenues for the company leading to bankruptcy threats.