Swot Analysis of "YPF - The Argentine Oil Nationalization of 2012" written by Noel Maurer, Gustavo A. Herrero includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nationalization Ypf facing as an external strategic factors. Some of the topics covered in YPF - The Argentine Oil Nationalization of 2012 case study are - Strategic Management Strategies, Operations management, Pricing, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the YPF - The Argentine Oil Nationalization of 2012 casestudy better are - – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of YPF - The Argentine Oil Nationalization of 2012
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in YPF - The Argentine Oil Nationalization of 2012 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nationalization Ypf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nationalization Ypf 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 YPF - The Argentine Oil Nationalization of 2012 can be done for the following purposes –
1. Strategic planning using facts provided in YPF - The Argentine Oil Nationalization of 2012 case study
2. Improving business portfolio management of Nationalization Ypf
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nationalization Ypf
Strengths YPF - The Argentine Oil Nationalization of 2012 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nationalization Ypf in YPF - The Argentine Oil Nationalization of 2012 Harvard Business Review case study are -
Highly skilled collaborators
– Nationalization Ypf 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 YPF - The Argentine Oil Nationalization of 2012 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Nationalization Ypf 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.
High brand equity
– Nationalization Ypf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nationalization Ypf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the YPF - The Argentine Oil Nationalization of 2012 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.
Training and development
– Nationalization Ypf has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in YPF - The Argentine Oil Nationalization of 2012 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.
Strong track record of project management
– Nationalization Ypf is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Nationalization Ypf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nationalization Ypf 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.
Innovation driven organization
– Nationalization Ypf is one of the most innovative firm in sector. Manager in YPF - The Argentine Oil Nationalization of 2012 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– YPF - The Argentine Oil Nationalization of 2012 firm has clearly differentiated products in the market place. This has enabled Nationalization Ypf to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nationalization Ypf to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Nationalization Ypf in the sector have low bargaining power. YPF - The Argentine Oil Nationalization of 2012 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nationalization Ypf to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Nationalization Ypf digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nationalization Ypf has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Nationalization Ypf 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.
Weaknesses YPF - The Argentine Oil Nationalization of 2012 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of YPF - The Argentine Oil Nationalization of 2012 are -
Lack of clear differentiation of Nationalization Ypf products
– To increase the profitability and margins on the products, Nationalization Ypf needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As YPF - The Argentine Oil Nationalization of 2012 HBR case study mentions - Nationalization Ypf 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study YPF - The Argentine Oil Nationalization of 2012, it seems that the employees of Nationalization Ypf 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Nationalization Ypf 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.
Capital Spending Reduction
– Even during the low interest decade, Nationalization Ypf 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.
Aligning sales with marketing
– It come across in the case study YPF - The Argentine Oil Nationalization of 2012 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 YPF - The Argentine Oil Nationalization of 2012 can leverage the sales team experience to cultivate customer relationships as Nationalization Ypf is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Noel Maurer, Gustavo A. Herrero suggests that, Nationalization Ypf is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Nationalization Ypf 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study YPF - The Argentine Oil Nationalization of 2012, in the dynamic environment Nationalization Ypf has struggled to respond to the nimble upstart competition. Nationalization Ypf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Nationalization Ypf is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nationalization Ypf needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nationalization Ypf to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Nationalization Ypf 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. Nationalization Ypf 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 YPF - The Argentine Oil Nationalization of 2012 | 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 YPF - The Argentine Oil Nationalization of 2012 are -
Buying journey improvements
– Nationalization Ypf can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. YPF - The Argentine Oil Nationalization of 2012 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nationalization Ypf 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, YPF - The Argentine Oil Nationalization of 2012, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Nationalization Ypf to increase its market reach. Nationalization Ypf 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.
Creating value in data economy
– The success of analytics program of Nationalization Ypf has opened avenues for new revenue streams for the organization in the industry. This can help Nationalization Ypf to build a more holistic ecosystem as suggested in the YPF - The Argentine Oil Nationalization of 2012 case study. Nationalization Ypf can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Nationalization Ypf can use these opportunities to build new business models that can help the communities that Nationalization Ypf operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Nationalization Ypf can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Nationalization Ypf 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nationalization Ypf in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Nationalization Ypf 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.
Manufacturing automation
– Nationalization Ypf can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Nationalization Ypf 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.
Using analytics as competitive advantage
– Nationalization Ypf 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 YPF - The Argentine Oil Nationalization of 2012 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nationalization Ypf to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nationalization Ypf is facing challenges because of the dominance of functional experts in the organization. YPF - The Argentine Oil Nationalization of 2012 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.
Threats YPF - The Argentine Oil Nationalization of 2012 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study YPF - The Argentine Oil Nationalization of 2012 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 Nationalization Ypf.
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. Nationalization Ypf needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Nationalization Ypf in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Nationalization Ypf has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Nationalization Ypf needs to keep up with the evolution of technology in the Strategy & Execution 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nationalization Ypf 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 YPF - The Argentine Oil Nationalization of 2012 .
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nationalization Ypf can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nationalization Ypf with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Nationalization Ypf
– 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 Nationalization Ypf.
Environmental challenges
– Nationalization Ypf 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. Nationalization Ypf can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Nationalization Ypf 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.
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 Nationalization Ypf business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Nationalization Ypf 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.
Weighted SWOT Analysis of YPF - The Argentine Oil Nationalization of 2012 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 YPF - The Argentine Oil Nationalization of 2012 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 YPF - The Argentine Oil Nationalization of 2012 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 YPF - The Argentine Oil Nationalization of 2012 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 YPF - The Argentine Oil Nationalization of 2012 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 Nationalization Ypf needs to make to build a sustainable competitive advantage.
