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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, 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 -
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.
High switching costs
– The high switching costs that Shell Dutch 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.
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.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Shell Dutch is one of the leading recruiters in the industry. Managers in the Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Shell Dutch in the sector have low bargaining power. Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shell Dutch to manage not only supply disruptions but also source products at highly competitive prices.
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.
Training and development
– Shell Dutch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) 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 Shell Dutch has relatively successful track record of launching new products.
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 cash cycle compare to competitors
Shell Dutch 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.
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.
Increasing silos among functional specialists
– The organizational structure of Shell Dutch is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Shell Dutch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shell Dutch to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), it seems that the employees of Shell Dutch 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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shell Dutch is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Products dominated business model
– Even though Shell Dutch 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 - Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) should strive to include more intangible value offerings along with its core products and services.
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 -
Using analytics as competitive advantage
– Shell Dutch 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 Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shell Dutch to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Leveraging digital technologies
– Shell Dutch 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shell Dutch 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, Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Shell Dutch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Shell Dutch can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
Loyalty marketing
– Shell Dutch 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.
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.
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 -
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) .
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.
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 Shell Dutch in the Organizational Development sector and impact the bottomline of the organization.
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.
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 Shell Dutch.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal Dutch/Shell: A Shell Game with Oil Reserves--Governance Overhaul after Scandal (B), Shell Dutch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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.
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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shell Dutch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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