Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B)
Following the revelation that the Royal Dutch/Shell Group of Companies had overstated its proved oil reserves by over 4 billion barrels, company officials announced dramatic changes to the company's organizational structure and governance system. These changes were intended to improve management oversight and long-term corporate performance. This case outlines those changes.
Authors :: David F. Larcker, Robert Lawson, Brian Tayan
Swot Analysis of "Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B)" written by David F. Larcker, Robert Lawson, Brian Tayan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shell Dutch facing as an external strategic factors. Some of the topics covered in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) case study are - Strategic Management Strategies, Boards, Performance measurement and Organizational Development.
Some of the macro environment factors that can be used to understand the Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) casestudy better are - – wage bills are increasing, there is backlash against globalization, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, technology disruption, geopolitical disruptions,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shell Dutch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shell Dutch 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) can be done for the following purposes –
1. Strategic planning using facts provided in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) case study
2. Improving business portfolio management of Shell Dutch
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shell Dutch
Strengths Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shell Dutch in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) Harvard Business Review case study are -
Organizational Resilience of Shell Dutch
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shell Dutch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Shell Dutch 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 David F. Larcker, Robert Lawson, Brian Tayan 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.
Operational resilience
– The operational resilience strategy in the Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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.
Diverse revenue streams
– Shell Dutch is present in almost all the verticals within the industry. This has provided firm in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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.
Superior customer experience
– The customer experience strategy of Shell Dutch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Shell Dutch 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Organizational Development industry
– Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) firm has clearly differentiated products in the market place. This has enabled Shell Dutch to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Shell Dutch to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Shell Dutch has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shell Dutch 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 Organizational Development field
– Shell Dutch 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 Shell Dutch in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Shell Dutch has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Shell Dutch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shell Dutch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Shell Dutch 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 Shell Dutch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) are -
Aligning sales with marketing
– It come across in the case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) can leverage the sales team experience to cultivate customer relationships as Shell Dutch is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Shell Dutch 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.
Skills based hiring
– The stress on hiring functional specialists at Shell Dutch 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 decision making process
– As mentioned earlier in the report, Shell Dutch 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. Shell Dutch 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.
Capital Spending Reduction
– Even during the low interest decade, Shell Dutch 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), in the dynamic environment Shell Dutch has struggled to respond to the nimble upstart competition. Shell Dutch has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Shell Dutch has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, David F. Larcker, Robert Lawson, Brian Tayan suggests that, Shell Dutch 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.
Slow to strategic competitive environment developments
– As Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) HBR case study mentions - Shell Dutch 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.
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 Shell Dutch supply chain. Even after few cautionary changes mentioned in the HBR case study - Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shell Dutch vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), is just above the industry average. Shell Dutch 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.
Opportunities Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) | 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) are -
Developing new processes and practices
– Shell Dutch can develop new processes and procedures in Organizational Development 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shell Dutch can use these opportunities to build new business models that can help the communities that Shell Dutch operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shell Dutch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Shell Dutch to increase its market reach. Shell Dutch 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.
Building a culture of innovation
– managers at Shell Dutch can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Creating value in data economy
– The success of analytics program of Shell Dutch has opened avenues for new revenue streams for the organization in the industry. This can help Shell Dutch to build a more holistic ecosystem as suggested in the Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) case study. Shell Dutch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shell Dutch to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Shell Dutch to hire the very best people irrespective of their geographical location.
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 Shell Dutch 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shell Dutch can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Shell Dutch in the consumer business. Now Shell Dutch can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Shell Dutch 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shell Dutch 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shell Dutch 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. Shell Dutch 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shell Dutch 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) .
Stagnating economy with rate increase
– Shell Dutch 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.
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. Shell Dutch needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Shell Dutch 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 Shell Dutch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shell Dutch in the Organizational Development industry. The Organizational Development 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.
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 Shell Dutch business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Shell Dutch has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Shell Dutch needs to keep up with the evolution of technology in the Organizational Development 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.
Environmental challenges
– Shell Dutch 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. Shell Dutch can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– Shell Dutch 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 Organizational Development industry regulations.
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. Shell Dutch 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.
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.
Weighted SWOT Analysis of Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Shell Dutch needs to make to build a sustainable competitive advantage.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & Analysis of Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B)
