Case Study Description of Block 16: Ecuadorian Government's Perspective
Supplements Block 16: Conoco's Green Oil Strategy (A). Provides the government perspective on Conoco's Ecuadorian strategy. Designed to be distributed to students who will be playing the role of Ecuadorian government officials.
Swot Analysis of "Block 16: Ecuadorian Government's Perspective" written by Malcolm S. Salter, Susan E.A. Hall includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecuadorian Conoco's facing as an external strategic factors. Some of the topics covered in Block 16: Ecuadorian Government's Perspective case study are - Strategic Management Strategies, Ethics, Marketing, Policy, Social responsibility, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Block 16: Ecuadorian Government's Perspective casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, geopolitical disruptions, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Block 16: Ecuadorian Government's Perspective
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Block 16: Ecuadorian Government's Perspective case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecuadorian Conoco's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecuadorian Conoco's 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 Block 16: Ecuadorian Government's Perspective can be done for the following purposes –
1. Strategic planning using facts provided in Block 16: Ecuadorian Government's Perspective case study
2. Improving business portfolio management of Ecuadorian Conoco's
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 Ecuadorian Conoco's
Strengths Block 16: Ecuadorian Government's Perspective | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecuadorian Conoco's in Block 16: Ecuadorian Government's Perspective Harvard Business Review case study are -
Innovation driven organization
– Ecuadorian Conoco's is one of the most innovative firm in sector. Manager in Block 16: Ecuadorian Government's Perspective 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
– Block 16: Ecuadorian Government's Perspective firm has clearly differentiated products in the market place. This has enabled Ecuadorian Conoco's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ecuadorian Conoco's to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Ecuadorian Conoco's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Ecuadorian Conoco's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ecuadorian Conoco's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Ecuadorian Conoco's 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
– Ecuadorian Conoco's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ecuadorian Conoco's 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 Ecuadorian Conoco's 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.
Learning organization
- Ecuadorian Conoco's 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 Ecuadorian Conoco's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Block 16: Ecuadorian Government's Perspective Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Ecuadorian Conoco's 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 Block 16: Ecuadorian Government's Perspective 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 Ecuadorian Conoco's 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.
Low bargaining power of suppliers
– Suppliers of Ecuadorian Conoco's in the sector have low bargaining power. Block 16: Ecuadorian Government's Perspective has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ecuadorian Conoco's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ecuadorian Conoco's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Block 16: Ecuadorian Government's Perspective - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Block 16: Ecuadorian Government's Perspective | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Block 16: Ecuadorian Government's Perspective are -
Slow decision making process
– As mentioned earlier in the report, Ecuadorian Conoco's 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. Ecuadorian Conoco's 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ecuadorian Conoco's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Block 16: Ecuadorian Government's Perspective can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Block 16: Ecuadorian Government's Perspective, it seems that the employees of Ecuadorian Conoco's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Block 16: Ecuadorian Government's Perspective, in the dynamic environment Ecuadorian Conoco's has struggled to respond to the nimble upstart competition. Ecuadorian Conoco's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Ecuadorian Conoco's 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.
Lack of clear differentiation of Ecuadorian Conoco's products
– To increase the profitability and margins on the products, Ecuadorian Conoco's needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Ecuadorian Conoco's 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Block 16: Ecuadorian Government's Perspective, is just above the industry average. Ecuadorian Conoco's 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.
Slow to strategic competitive environment developments
– As Block 16: Ecuadorian Government's Perspective HBR case study mentions - Ecuadorian Conoco's 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.
Need for greater diversity
– Ecuadorian Conoco's 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.
Products dominated business model
– Even though Ecuadorian Conoco's 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 - Block 16: Ecuadorian Government's Perspective should strive to include more intangible value offerings along with its core products and services.
Opportunities Block 16: Ecuadorian Government's Perspective | 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 Block 16: Ecuadorian Government's Perspective are -
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. Ecuadorian Conoco's 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 Ecuadorian Conoco's 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.
Better consumer reach
– The expansion of the 5G network will help Ecuadorian Conoco's to increase its market reach. Ecuadorian Conoco's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ecuadorian Conoco's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Ecuadorian Conoco's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Block 16: Ecuadorian Government's Perspective 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ecuadorian Conoco's is facing challenges because of the dominance of functional experts in the organization. Block 16: Ecuadorian Government's Perspective 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ecuadorian Conoco's 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. Ecuadorian Conoco's 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ecuadorian Conoco's in the consumer business. Now Ecuadorian Conoco's can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Ecuadorian Conoco's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ecuadorian Conoco's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ecuadorian Conoco's 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 Ecuadorian Conoco's to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Ecuadorian Conoco's 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 Block 16: Ecuadorian Government's Perspective - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecuadorian Conoco's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Ecuadorian Conoco's 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.
Threats Block 16: Ecuadorian Government's Perspective External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Block 16: Ecuadorian Government's Perspective are -
Regulatory challenges
– Ecuadorian Conoco's 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 Strategy & Execution industry regulations.
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.
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. Ecuadorian Conoco's 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.
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 Ecuadorian Conoco's.
High dependence on third party suppliers
– Ecuadorian Conoco's 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.
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. Ecuadorian Conoco's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Ecuadorian Conoco's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Ecuadorian Conoco's 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 Ecuadorian Conoco's in the Strategy & Execution industry. The Strategy & Execution 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.
Stagnating economy with rate increase
– Ecuadorian Conoco's 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.
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, Ecuadorian Conoco's 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 Block 16: Ecuadorian Government's Perspective .
Shortening product life cycle
– it is one of the major threat that Ecuadorian Conoco's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Block 16: Ecuadorian Government's Perspective 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 Block 16: Ecuadorian Government's Perspective 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 Block 16: Ecuadorian Government's Perspective 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 Block 16: Ecuadorian Government's Perspective 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 Block 16: Ecuadorian Government's Perspective 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 Ecuadorian Conoco's needs to make to build a sustainable competitive advantage.
