Case Study Description of Insulation Coating for Oil-Chemical Storage Tanks (B)
VaporLock was a proprietary coating sold by Heinrich Chemical as a vapor barrier over polyurethane insulation on oil/chemical storage tanks. A company engineer had developed a computer program to compute the energy savings and economics of tank insulation projects. The marketing director wondered how this computer program might be used to help sell VaporLock. This case is one in a series of four cases on value-based selling. The (B) case provides the value mapping and value proposition. The (A) case provides the background.
Swot Analysis of "Insulation Coating for Oil-Chemical Storage Tanks (B)" written by Thomas Cross includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Insulation Vaporlock facing as an external strategic factors. Some of the topics covered in Insulation Coating for Oil-Chemical Storage Tanks (B) case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Insulation Coating for Oil-Chemical Storage Tanks (B) casestudy better are - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is increasing trade war between United States & China, wage bills are increasing, increasing transportation and logistics costs,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Insulation Coating for Oil-Chemical Storage Tanks (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Insulation Coating for Oil-Chemical Storage Tanks (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Insulation Vaporlock, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Insulation Vaporlock 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 Insulation Coating for Oil-Chemical Storage Tanks (B) can be done for the following purposes –
1. Strategic planning using facts provided in Insulation Coating for Oil-Chemical Storage Tanks (B) case study
2. Improving business portfolio management of Insulation Vaporlock
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Insulation Vaporlock
Strengths Insulation Coating for Oil-Chemical Storage Tanks (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Insulation Vaporlock in Insulation Coating for Oil-Chemical Storage Tanks (B) Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Insulation Vaporlock digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Insulation Vaporlock 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Insulation Coating for Oil-Chemical Storage Tanks (B) firm has clearly differentiated products in the market place. This has enabled Insulation Vaporlock to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Insulation Vaporlock to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Insulation Vaporlock in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Insulation Vaporlock has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Insulation Vaporlock 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.
Cross disciplinary teams
– Horizontal connected teams at the Insulation Vaporlock 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.
Operational resilience
– The operational resilience strategy in the Insulation Coating for Oil-Chemical Storage Tanks (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.
Analytics focus
– Insulation Vaporlock 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 Thomas Cross 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.
Innovation driven organization
– Insulation Vaporlock is one of the most innovative firm in sector. Manager in Insulation Coating for Oil-Chemical Storage Tanks (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Insulation Vaporlock is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Insulation Vaporlock has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Insulation Vaporlock to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Insulation Vaporlock is present in almost all the verticals within the industry. This has provided firm in Insulation Coating for Oil-Chemical Storage Tanks (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.
Training and development
– Insulation Vaporlock has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Insulation Coating for Oil-Chemical Storage Tanks (B) are -
Interest costs
– Compare to the competition, Insulation Vaporlock 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 bargaining power of channel partners
– Because of the regulatory requirements, Thomas Cross suggests that, Insulation Vaporlock 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.
Lack of clear differentiation of Insulation Vaporlock products
– To increase the profitability and margins on the products, Insulation Vaporlock needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Insulation Coating for Oil-Chemical Storage Tanks (B) 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 Insulation Vaporlock 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Insulation Vaporlock 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. Insulation Vaporlock 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.
Slow to strategic competitive environment developments
– As Insulation Coating for Oil-Chemical Storage Tanks (B) HBR case study mentions - Insulation Vaporlock 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.
Skills based hiring
– The stress on hiring functional specialists at Insulation Vaporlock 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.
Aligning sales with marketing
– It come across in the case study Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (B) can leverage the sales team experience to cultivate customer relationships as Insulation Vaporlock is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Insulation Coating for Oil-Chemical Storage Tanks (B), it seems that the employees of Insulation Vaporlock 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 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 Insulation Vaporlock supply chain. Even after few cautionary changes mentioned in the HBR case study - Insulation Coating for Oil-Chemical Storage Tanks (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Insulation Vaporlock vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Vaporlock has relatively successful track record of launching new products.
Opportunities Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (B) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Insulation Vaporlock 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, Insulation Coating for Oil-Chemical Storage Tanks (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.
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 Insulation Vaporlock 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.
Buying journey improvements
– Insulation Vaporlock can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Insulation Coating for Oil-Chemical Storage Tanks (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.
Better consumer reach
– The expansion of the 5G network will help Insulation Vaporlock to increase its market reach. Insulation Vaporlock 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Insulation Vaporlock 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 Insulation Vaporlock to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Insulation Vaporlock 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. Insulation Vaporlock 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.
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. Insulation Vaporlock can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Insulation Vaporlock in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Insulation Vaporlock is facing challenges because of the dominance of functional experts in the organization. Insulation Coating for Oil-Chemical Storage Tanks (B) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Insulation Vaporlock can use these opportunities to build new business models that can help the communities that Insulation Vaporlock operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Insulation Vaporlock can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Insulation Vaporlock has opened avenues for new revenue streams for the organization in the industry. This can help Insulation Vaporlock to build a more holistic ecosystem as suggested in the Insulation Coating for Oil-Chemical Storage Tanks (B) case study. Insulation Vaporlock can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Insulation Vaporlock can develop new processes and procedures in Sales & Marketing 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 Insulation Coating for Oil-Chemical Storage Tanks (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Insulation Coating for Oil-Chemical Storage Tanks (B) are -
Regulatory challenges
– Insulation Vaporlock 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 Sales & Marketing industry regulations.
High dependence on third party suppliers
– Insulation Vaporlock 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 acceleration in Forth Industrial Revolution
– Insulation Vaporlock has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Insulation Vaporlock needs to keep up with the evolution of technology in the Sales & Marketing 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.
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. Insulation Vaporlock needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Insulation Vaporlock can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Insulation Vaporlock
– 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 Insulation Vaporlock.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Insulation Vaporlock 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 Insulation Coating for Oil-Chemical Storage Tanks (B) .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Insulation Vaporlock with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Insulation Coating for Oil-Chemical Storage Tanks (B), Insulation Vaporlock may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
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. Insulation Vaporlock 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.
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.
Consumer confidence and its impact on Insulation Vaporlock 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Insulation Vaporlock in the Sales & Marketing industry. The Sales & Marketing 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.
Weighted SWOT Analysis of Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Coating for Oil-Chemical Storage Tanks (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 Insulation Vaporlock needs to make to build a sustainable competitive advantage.
