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 - – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , geopolitical disruptions, there is increasing trade war between United States & China, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, 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 -
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.
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.
Operational resilience
– The operational resilience strategy in the Block 16: Ecuadorian Government's Perspective 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.
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.
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.
Analytics focus
– Ecuadorian Conoco's 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 Malcolm S. Salter, Susan E.A. Hall 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.
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.
Ability to recruit top talent
– Ecuadorian Conoco's is one of the leading recruiters in the industry. Managers in the Block 16: Ecuadorian Government's Perspective are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of 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.
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.
Organizational Resilience of Ecuadorian Conoco's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ecuadorian Conoco's 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
– 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.
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 -
Aligning sales with marketing
– It come across in the case study Block 16: Ecuadorian Government's Perspective 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 Block 16: Ecuadorian Government's Perspective can leverage the sales team experience to cultivate customer relationships as Ecuadorian Conoco's is planning to shift buying processes online.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Malcolm S. Salter, Susan E.A. Hall suggests that, Ecuadorian Conoco's 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 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Block 16: Ecuadorian Government's Perspective 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 Ecuadorian Conoco's has relatively successful track record of launching new products.
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.
Increasing silos among functional specialists
– The organizational structure of Ecuadorian Conoco's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ecuadorian Conoco's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecuadorian Conoco's to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Ecuadorian Conoco's 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.
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 Ecuadorian Conoco's supply chain. Even after few cautionary changes mentioned in the HBR case study - Block 16: Ecuadorian Government's Perspective, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ecuadorian Conoco's vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Block 16: Ecuadorian Government's Perspective 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 Ecuadorian Conoco's 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Block 16: Ecuadorian Government's Perspective, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 -
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ecuadorian Conoco's can use these opportunities to build new business models that can help the communities that Ecuadorian Conoco's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Ecuadorian Conoco's 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.
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 Ecuadorian Conoco's 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.
Creating value in data economy
– The success of analytics program of Ecuadorian Conoco's has opened avenues for new revenue streams for the organization in the industry. This can help Ecuadorian Conoco's to build a more holistic ecosystem as suggested in the Block 16: Ecuadorian Government's Perspective case study. Ecuadorian Conoco's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ecuadorian Conoco's 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, Block 16: Ecuadorian Government's Perspective, 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 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.
Developing new processes and practices
– Ecuadorian Conoco's can develop new processes and procedures in Strategy & Execution 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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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 .
Increasing wage structure of Ecuadorian Conoco's
– 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 Ecuadorian Conoco's.
Environmental challenges
– Ecuadorian Conoco's 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. Ecuadorian Conoco's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecuadorian Conoco's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.