NorPetrol Venezuela's Social Investment, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NorPetrol Venezuela's Social Investment, Spanish Version
In 1996, NorPetrol arrived in Venezuela, where it started upstream oil operations. The company engaged in corporate social responsibility initiatives to support its operations, choosing its programs after consulting with local stakeholders. Upon arriving in the Paria Gulf area, Francisca Rios, head of the company's Social Investment and Community Relations Coordinating Unit, met with politicians, community leaders, public officials, and grassroots organizations' representatives to learn about their expectations and issues, and to communicate the company's investment plans and projects with a potential impact on their communities. A stakeholder identified by the company was Asopescar, an association of traditional fishermen. Tensions between fishermen and oil companies were commonplace. The former blamed NorPetrol for the degradation of a mangrove swamp and a significant decrease in production during the fishing season. Francisca Rios did not want to build a relationship with the fishermen based on donations and assistance. Intending empower them, she decided to channel a portion of her social investment budget to turn Asopescar fishermen into entrepreneurs. In 2006, Francisca Rios considered that Asopescar had made great progress as a productive, self-sustaining company. However, a number of problems had arisen in the organization, forcing her to rethink upcoming investments of NorPetrol in the association. Problems included rising unpaid debts of Asopecar members with their own organization, member drop-out, administrative chaos and informality in money handling, and high operating costs.The case raises the challenges facing an oil company to achieve a social license to operate, as well as its attempts to secure sustainable community development processes in its areas of influence. It takes place in April 2006, at which time Francisca Rios, wondered what to do with her initiative to support modernization of the productive model of a group of small-scale fishermen. IESA's case collection
Authors :: Josefina F. Bruni-Celli, Rosa Amelia Gonzalez
Topics :: Leadership & Managing People
Tags :: Ethics, Government, Social enterprise, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "NorPetrol Venezuela's Social Investment, Spanish Version" written by Josefina F. Bruni-Celli, Rosa Amelia Gonzalez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fishermen Francisca facing as an external strategic factors. Some of the topics covered in NorPetrol Venezuela's Social Investment, Spanish Version case study are - Strategic Management Strategies, Ethics, Government, Social enterprise, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the NorPetrol Venezuela's Social Investment, Spanish Version casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
Introduction to SWOT Analysis of NorPetrol Venezuela's Social Investment, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NorPetrol Venezuela's Social Investment, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fishermen Francisca, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fishermen Francisca 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 NorPetrol Venezuela's Social Investment, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in NorPetrol Venezuela's Social Investment, Spanish Version case study
2. Improving business portfolio management of Fishermen Francisca
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fishermen Francisca
Strengths NorPetrol Venezuela's Social Investment, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fishermen Francisca in NorPetrol Venezuela's Social Investment, Spanish Version Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the NorPetrol Venezuela's Social Investment, Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the 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.
Superior customer experience
– The customer experience strategy of Fishermen Francisca in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Fishermen Francisca has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fishermen Francisca to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Fishermen Francisca has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Fishermen Francisca has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in NorPetrol Venezuela's Social Investment, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Fishermen Francisca 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 industry. The technology infrastructure suggested by Josefina F. Bruni-Celli, Rosa Amelia Gonzalez can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- Fishermen Francisca 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 Fishermen Francisca is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NorPetrol Venezuela's Social Investment, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Fishermen Francisca has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in NorPetrol Venezuela's Social Investment, Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Fishermen Francisca is one of the leading recruiters in the industry. Managers in the NorPetrol Venezuela's Social Investment, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Fishermen Francisca digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fishermen Francisca has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Fishermen Francisca in the sector have low bargaining power. NorPetrol Venezuela's Social Investment, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fishermen Francisca to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– NorPetrol Venezuela's Social Investment, Spanish Version firm has clearly differentiated products in the market place. This has enabled Fishermen Francisca to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Fishermen Francisca to invest into research and development (R&D) and innovation.
Weaknesses NorPetrol Venezuela's Social Investment, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NorPetrol Venezuela's Social Investment, Spanish Version are -
Increasing silos among functional specialists
– The organizational structure of Fishermen Francisca is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Fishermen Francisca needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fishermen Francisca to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the NorPetrol Venezuela's Social Investment, Spanish Version HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Fishermen Francisca has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study NorPetrol Venezuela's Social Investment, Spanish Version, in the dynamic environment Fishermen Francisca has struggled to respond to the nimble upstart competition. Fishermen Francisca has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Fishermen Francisca, firm in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version, is just above the industry average. Fishermen Francisca needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 Fishermen Francisca supply chain. Even after few cautionary changes mentioned in the HBR case study - NorPetrol Venezuela's Social Investment, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fishermen Francisca vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Fishermen Francisca needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners
– Because of the regulatory requirements, Josefina F. Bruni-Celli, Rosa Amelia Gonzalez suggests that, Fishermen Francisca is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fishermen Francisca 's lucrative customers.
Products dominated business model
– Even though Fishermen Francisca has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - NorPetrol Venezuela's Social Investment, Spanish Version should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Fishermen Francisca has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Fishermen Francisca 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.
Opportunities NorPetrol Venezuela's Social Investment, Spanish Version | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study NorPetrol Venezuela's Social Investment, Spanish Version are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fishermen Francisca can use these opportunities to build new business models that can help the communities that Fishermen Francisca operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Fishermen Francisca can develop new processes and procedures in Leadership & Managing People 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fishermen Francisca can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fishermen Francisca can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Fishermen Francisca has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study NorPetrol Venezuela's Social Investment, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fishermen Francisca to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fishermen Francisca is facing challenges because of the dominance of functional experts in the organization. NorPetrol Venezuela's Social Investment, Spanish Version case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Fishermen Francisca 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.
Creating value in data economy
– The success of analytics program of Fishermen Francisca has opened avenues for new revenue streams for the organization in the industry. This can help Fishermen Francisca to build a more holistic ecosystem as suggested in the NorPetrol Venezuela's Social Investment, Spanish Version case study. Fishermen Francisca can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Fishermen Francisca to increase its market reach. Fishermen Francisca 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.
Leveraging digital technologies
– Fishermen Francisca 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.
Manufacturing automation
– Fishermen Francisca can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Fishermen Francisca has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fishermen Francisca 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. Fishermen Francisca 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.
Threats NorPetrol Venezuela's Social Investment, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fishermen Francisca 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 prominent markets illustrated in HBR case study NorPetrol Venezuela's Social Investment, Spanish Version .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fishermen Francisca can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Fishermen Francisca needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Fishermen Francisca high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fishermen Francisca with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Fishermen Francisca 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. Fishermen Francisca can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Fishermen Francisca is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Fishermen Francisca has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Fishermen Francisca needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fishermen Francisca.
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.
Regulatory challenges
– Fishermen Francisca 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 Leadership & Managing People industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fishermen Francisca business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Fishermen Francisca
– 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 Fishermen Francisca.
Weighted SWOT Analysis of NorPetrol Venezuela's Social Investment, Spanish Version Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version 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 the case study NorPetrol Venezuela's Social Investment, Spanish Version 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 the Harvard case study NorPetrol Venezuela's Social Investment, Spanish Version 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 NorPetrol Venezuela's Social Investment, Spanish Version is 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 Fishermen Francisca needs to make to build a sustainable competitive advantage.
