Kevin McCarthy and Westlake Chemical Corp (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kevin McCarthy and Westlake Chemical Corp (A)
Examines forecasting earnings/performance for a commodity chemical firm during a period of high uncertainty, highlighting the combined effects of input process (natural gas), industry capacity/utilization, and cyclicality. Assuming the role of Kevin McCarthy (the top chemical industry analyst in 2004), students must analyze macro, industry, and firm-level data to determine the future performance of this firm.
Swot Analysis of "Kevin McCarthy and Westlake Chemical Corp (A)" written by Edward J. Riedl includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mccarthy Chemical facing as an external strategic factors. Some of the topics covered in Kevin McCarthy and Westlake Chemical Corp (A) case study are - Strategic Management Strategies, Financial analysis, Financial markets, Forecasting, Managing uncertainty and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Kevin McCarthy and Westlake Chemical Corp (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, geopolitical disruptions, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
technology disruption, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Kevin McCarthy and Westlake Chemical Corp (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kevin McCarthy and Westlake Chemical Corp (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mccarthy Chemical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mccarthy Chemical 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 Kevin McCarthy and Westlake Chemical Corp (A) can be done for the following purposes –
1. Strategic planning using facts provided in Kevin McCarthy and Westlake Chemical Corp (A) case study
2. Improving business portfolio management of Mccarthy Chemical
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mccarthy Chemical
Strengths Kevin McCarthy and Westlake Chemical Corp (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mccarthy Chemical in Kevin McCarthy and Westlake Chemical Corp (A) Harvard Business Review case study are -
Strong track record of project management
– Mccarthy Chemical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Mccarthy Chemical is one of the most innovative firm in sector. Manager in Kevin McCarthy and Westlake Chemical Corp (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Mccarthy Chemical 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.
Low bargaining power of suppliers
– Suppliers of Mccarthy Chemical in the sector have low bargaining power. Kevin McCarthy and Westlake Chemical Corp (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mccarthy Chemical to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Mccarthy Chemical is present in almost all the verticals within the industry. This has provided firm in Kevin McCarthy and Westlake Chemical Corp (A) 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.
Highly skilled collaborators
– Mccarthy Chemical 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 Kevin McCarthy and Westlake Chemical Corp (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Mccarthy Chemical
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mccarthy Chemical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Mccarthy Chemical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mccarthy Chemical 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.
High switching costs
– The high switching costs that Mccarthy Chemical 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.
Training and development
– Mccarthy Chemical has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kevin McCarthy and Westlake Chemical Corp (A) 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Kevin McCarthy and Westlake Chemical Corp (A) firm has clearly differentiated products in the market place. This has enabled Mccarthy Chemical to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Mccarthy Chemical to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Kevin McCarthy and Westlake Chemical Corp (A) 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.
Weaknesses Kevin McCarthy and Westlake Chemical Corp (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kevin McCarthy and Westlake Chemical Corp (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kevin McCarthy and Westlake Chemical Corp (A), it seems that the employees of Mccarthy Chemical 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.
High cash cycle compare to competitors
Mccarthy Chemical 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.
Increasing silos among functional specialists
– The organizational structure of Mccarthy Chemical is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Mccarthy Chemical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mccarthy Chemical to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Mccarthy Chemical 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.
Slow to strategic competitive environment developments
– As Kevin McCarthy and Westlake Chemical Corp (A) HBR case study mentions - Mccarthy Chemical 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.
Products dominated business model
– Even though Mccarthy Chemical 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 - Kevin McCarthy and Westlake Chemical Corp (A) should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Edward J. Riedl suggests that, Mccarthy Chemical 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Kevin McCarthy and Westlake Chemical Corp (A) 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 Mccarthy Chemical has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Mccarthy Chemical 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.
Lack of clear differentiation of Mccarthy Chemical products
– To increase the profitability and margins on the products, Mccarthy Chemical needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Mccarthy Chemical 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. Mccarthy Chemical 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 Kevin McCarthy and Westlake Chemical Corp (A) | 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 Kevin McCarthy and Westlake Chemical Corp (A) are -
Learning at scale
– Online learning technologies has now opened space for Mccarthy Chemical 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 Mccarthy Chemical has opened avenues for new revenue streams for the organization in the industry. This can help Mccarthy Chemical to build a more holistic ecosystem as suggested in the Kevin McCarthy and Westlake Chemical Corp (A) case study. Mccarthy Chemical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mccarthy Chemical 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, Kevin McCarthy and Westlake Chemical Corp (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Mccarthy Chemical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Mccarthy Chemical 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mccarthy Chemical can use these opportunities to build new business models that can help the communities that Mccarthy Chemical operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mccarthy Chemical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mccarthy Chemical is facing challenges because of the dominance of functional experts in the organization. Kevin McCarthy and Westlake Chemical Corp (A) 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.
Buying journey improvements
– Mccarthy Chemical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kevin McCarthy and Westlake Chemical Corp (A) 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mccarthy Chemical 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. Mccarthy Chemical 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.
Building a culture of innovation
– managers at Mccarthy Chemical 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 Finance & Accounting segment.
Using analytics as competitive advantage
– Mccarthy Chemical 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 Kevin McCarthy and Westlake Chemical Corp (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mccarthy Chemical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Mccarthy Chemical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Kevin McCarthy and Westlake Chemical Corp (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kevin McCarthy and Westlake Chemical Corp (A) are -
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 Mccarthy Chemical.
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 Mccarthy Chemical business can come under increasing regulations regarding data privacy, data security, etc.
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 Mccarthy Chemical in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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, Mccarthy Chemical 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 Kevin McCarthy and Westlake Chemical Corp (A) .
High dependence on third party suppliers
– Mccarthy Chemical 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.
Stagnating economy with rate increase
– Mccarthy Chemical 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.
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. Mccarthy Chemical 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mccarthy Chemical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Mccarthy Chemical is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Mccarthy Chemical
– 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 Mccarthy Chemical.
Consumer confidence and its impact on Mccarthy Chemical 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.
Weighted SWOT Analysis of Kevin McCarthy and Westlake Chemical Corp (A) 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 Kevin McCarthy and Westlake Chemical Corp (A) 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 Kevin McCarthy and Westlake Chemical Corp (A) 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 Kevin McCarthy and Westlake Chemical Corp (A) 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 Kevin McCarthy and Westlake Chemical Corp (A) 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 Mccarthy Chemical needs to make to build a sustainable competitive advantage.
