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 - – geopolitical disruptions, central banks are concerned over increasing inflation, increasing energy prices, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, 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 -
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.
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.
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.
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.
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.
Successful track record of launching new products
– Fishermen Francisca has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fishermen Francisca has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Leadership & Managing People field
– Fishermen Francisca is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Fishermen Francisca in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Cross disciplinary teams
– Horizontal connected teams at the Fishermen Francisca are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Fishermen Francisca is present in almost all the verticals within the industry. This has provided firm in NorPetrol Venezuela's Social Investment, Spanish Version case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Strong track record of project management
– Fishermen Francisca is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
Lack of clear differentiation of Fishermen Francisca products
– To increase the profitability and margins on the products, Fishermen Francisca needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study NorPetrol Venezuela's Social Investment, Spanish Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case NorPetrol Venezuela's Social Investment, Spanish Version can leverage the sales team experience to cultivate customer relationships as Fishermen Francisca is planning to shift buying processes online.
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.
Interest costs
– Compare to the competition, Fishermen Francisca has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
High cash cycle compare to competitors
Fishermen Francisca has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Fishermen Francisca has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As NorPetrol Venezuela's Social Investment, Spanish Version HBR case study mentions - Fishermen Francisca takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Capital Spending Reduction
– Even during the low interest decade, Fishermen Francisca has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study NorPetrol Venezuela's Social Investment, Spanish Version, it seems that the employees of Fishermen Francisca don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fishermen Francisca in the consumer business. Now Fishermen Francisca can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
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.
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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Fishermen Francisca to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Fishermen Francisca can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fishermen Francisca can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, NorPetrol Venezuela's Social Investment, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fishermen Francisca can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 -
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Fishermen Francisca will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fishermen Francisca in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Consumer confidence and its impact on Fishermen Francisca demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study NorPetrol Venezuela's Social Investment, Spanish Version, Fishermen Francisca may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Stagnating economy with rate increase
– Fishermen Francisca can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Fishermen Francisca in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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.