BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version
Examines the economics of the oil and gas industry with a focus on 1998 through 2001. Discusses the rationale behind using a growth in scale as a means to increase profitability and to gain competitive advantage. Also examines the classic strategic implications of vertical integration and questions the necessity of remaining vertically integrated in today's markets. During 1998-2001, the industry structure changed dramatically with the occurrence of a wave of merger activity. Set at the end of 2001, as BP's chief executive, Lord John Browne, ponders the company's future. BP set off the merger activity in 1998 with its combination with Amoco. Other major oil concerns quickly followed suit. Several large and dominant firms, termed "supermajors," separated themselves from the rest of the competitors. Although a large number of independent specialty firms also exist, the supermajor firms no longer believe them to be direct competitors. After the case discussion, students should be able to: 1) understand the basic economics of the oil and gas industry, 2) analyze the rationale behind vertical integration strategies, 3) analyze why the industry restructuring occurred, and 4) understand the economies of scale of the supermajor firms as well as the potential problems their immense size could create.
Authors :: Forest Reinhardt, Ramon Casadesus-Masanell, David J. Hanson
Swot Analysis of "BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version" written by Forest Reinhardt, Ramon Casadesus-Masanell, David J. Hanson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Supermajor 1998 facing as an external strategic factors. Some of the topics covered in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version case study are - Strategic Management Strategies, International business, Mergers & acquisitions, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version casestudy better are - – increasing transportation and logistics costs, technology disruption, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Supermajor 1998, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Supermajor 1998 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version case study
2. Improving business portfolio management of Supermajor 1998
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 Supermajor 1998
Strengths BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Supermajor 1998 in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Supermajor 1998 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Supermajor 1998 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Supermajor 1998 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.
Superior customer experience
– The customer experience strategy of Supermajor 1998 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Supermajor 1998 is present in almost all the verticals within the industry. This has provided firm in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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.
High brand equity
– Supermajor 1998 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Supermajor 1998 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Supermajor 1998 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Supermajor 1998 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Supermajor 1998 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.
Organizational Resilience of Supermajor 1998
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Supermajor 1998 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Supermajor 1998 is one of the most innovative firm in sector. Manager in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Supermajor 1998 is one of the leading recruiters in the industry. Managers in the BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Supermajor 1998 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version firm has clearly differentiated products in the market place. This has enabled Supermajor 1998 to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Supermajor 1998 to invest into research and development (R&D) and innovation.
Weaknesses BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version are -
Low market penetration in new markets
– Outside its home market of Supermajor 1998, firm in the HBR case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Supermajor 1998 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version, it seems that the employees of Supermajor 1998 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.
Aligning sales with marketing
– It come across in the case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version can leverage the sales team experience to cultivate customer relationships as Supermajor 1998 is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Supermajor 1998 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.
High operating costs
– Compare to the competitors, firm in the HBR case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 Supermajor 1998 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Supermajor 1998 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.
Products dominated business model
– Even though Supermajor 1998 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 - BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Supermajor 1998 products
– To increase the profitability and margins on the products, Supermajor 1998 needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Forest Reinhardt, Ramon Casadesus-Masanell, David J. Hanson suggests that, Supermajor 1998 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, Supermajor 1998 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.
Opportunities BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version | 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version are -
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 Supermajor 1998 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.
Leveraging digital technologies
– Supermajor 1998 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.
Developing new processes and practices
– Supermajor 1998 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.
Better consumer reach
– The expansion of the 5G network will help Supermajor 1998 to increase its market reach. Supermajor 1998 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 Supermajor 1998 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Supermajor 1998 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.
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. Supermajor 1998 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Supermajor 1998 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.
Creating value in data economy
– The success of analytics program of Supermajor 1998 has opened avenues for new revenue streams for the organization in the industry. This can help Supermajor 1998 to build a more holistic ecosystem as suggested in the BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version case study. Supermajor 1998 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Supermajor 1998 in the consumer business. Now Supermajor 1998 can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Supermajor 1998 is facing challenges because of the dominance of functional experts in the organization. BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Supermajor 1998 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, BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Supermajor 1998 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Threats BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version are -
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. Supermajor 1998 needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Supermajor 1998 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Supermajor 1998 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.
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 Supermajor 1998.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Supermajor 1998 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version .
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 Supermajor 1998 business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Supermajor 1998 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.
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. Supermajor 1998 will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Supermajor 1998 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Supermajor 1998 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Supermajor 1998 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.
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.
Regulatory challenges
– Supermajor 1998 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.
Environmental challenges
– Supermajor 1998 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. Supermajor 1998 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 Supermajor 1998 needs to make to build a sustainable competitive advantage.
