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 - – technology disruption, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
geopolitical disruptions, increasing transportation and logistics costs, 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 -
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.
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.
High switching costs
– The high switching costs that Supermajor 1998 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.
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.
Operational resilience
– The operational resilience strategy in the BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Supermajor 1998 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 Forest Reinhardt, Ramon Casadesus-Masanell, David J. Hanson 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.
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.
Ability to lead change in Strategy & Execution field
– Supermajor 1998 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Supermajor 1998 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
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 Supermajor 1998 supply chain. Even after few cautionary changes mentioned in the HBR case study - BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Supermajor 1998 vulnerable to further global disruptions in South East Asia.
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.
No frontier risks strategy
– After analyzing the HBR case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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 Supermajor 1998 has relatively successful track record of launching new products.
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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Supermajor 1998 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Supermajor 1998 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 Supermajor 1998 to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Supermajor 1998 can use these opportunities to build new business models that can help the communities that Supermajor 1998 operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Supermajor 1998 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.
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.
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.
Buying journey improvements
– Supermajor 1998 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version 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, 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.
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. Supermajor 1998 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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. Supermajor 1998 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. Supermajor 1998 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 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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BP and the Consolidation of the Oil Industry--1998-2002, Spanish Version, Supermajor 1998 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
Shortening product life cycle
– it is one of the major threat that Supermajor 1998 is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Supermajor 1998 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Supermajor 1998 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.
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.
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.
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.
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.
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.
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.
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.