Sasol: U.S. Growth Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sasol: U.S. Growth Program
Sasol, the world's largest producer of synthetic oil from coal and gas, has announced plans to build a huge Catalytic cracker and gas-to-liquids plant in Lake Charles, Louisiana. This $21 billion venture will be the single largest foreign direct investment in US manufacturing history. The plants, on 1,600 acres adjacent to the company's existing cracker, will liquefy 98,000 barrels daily, converting ethane to ethylene and then into various specialty chemicals. The entire project depends on low gas prices engendered by the shale revolution and relatively high oil prices. The risks are copious, as is the promise.
Swot Analysis of "Sasol: U.S. Growth Program" written by Richard H.K. Vietor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sasol Cracker facing as an external strategic factors. Some of the topics covered in Sasol: U.S. Growth Program case study are - Strategic Management Strategies, Managing uncertainty, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sasol: U.S. Growth Program casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is backlash against globalization, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , wage bills are increasing,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Sasol: U.S. Growth Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sasol: U.S. Growth Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sasol Cracker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sasol Cracker 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 Sasol: U.S. Growth Program can be done for the following purposes –
1. Strategic planning using facts provided in Sasol: U.S. Growth Program case study
2. Improving business portfolio management of Sasol Cracker
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 Sasol Cracker
Strengths Sasol: U.S. Growth Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sasol Cracker in Sasol: U.S. Growth Program Harvard Business Review case study are -
Diverse revenue streams
– Sasol Cracker is present in almost all the verticals within the industry. This has provided firm in Sasol: U.S. Growth Program 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Sasol: U.S. Growth Program firm has clearly differentiated products in the market place. This has enabled Sasol Cracker to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sasol Cracker to invest into research and development (R&D) and innovation.
Training and development
– Sasol Cracker has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sasol: U.S. Growth Program 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.
Ability to lead change in Strategy & Execution field
– Sasol Cracker 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 Sasol Cracker in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Sasol Cracker 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 brand equity
– Sasol Cracker has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sasol Cracker to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Sasol Cracker 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 Richard H.K. Vietor 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.
Operational resilience
– The operational resilience strategy in the Sasol: U.S. Growth Program 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.
Innovation driven organization
– Sasol Cracker is one of the most innovative firm in sector. Manager in Sasol: U.S. Growth Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Sasol Cracker 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 Sasol: U.S. Growth Program HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sasol Cracker digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sasol Cracker 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.
Ability to recruit top talent
– Sasol Cracker is one of the leading recruiters in the industry. Managers in the Sasol: U.S. Growth Program are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Sasol: U.S. Growth Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sasol: U.S. Growth Program are -
No frontier risks strategy
– After analyzing the HBR case study Sasol: U.S. Growth Program, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sasol: U.S. Growth Program, in the dynamic environment Sasol Cracker has struggled to respond to the nimble upstart competition. Sasol Cracker has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sasol: U.S. Growth Program, is just above the industry average. Sasol Cracker 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.
Low market penetration in new markets
– Outside its home market of Sasol Cracker, firm in the HBR case study Sasol: U.S. Growth Program needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sasol: U.S. Growth Program 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 Sasol Cracker has relatively successful track record of launching new products.
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 Sasol Cracker supply chain. Even after few cautionary changes mentioned in the HBR case study - Sasol: U.S. Growth Program, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sasol Cracker vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program can leverage the sales team experience to cultivate customer relationships as Sasol Cracker is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Sasol Cracker 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sasol Cracker 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.
Increasing silos among functional specialists
– The organizational structure of Sasol Cracker is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sasol Cracker needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sasol Cracker to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sasol Cracker is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program | 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 Sasol: U.S. Growth Program are -
Learning at scale
– Online learning technologies has now opened space for Sasol Cracker to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. Sasol Cracker can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Sasol Cracker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sasol: U.S. Growth Program 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sasol Cracker 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sasol Cracker 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, Sasol: U.S. Growth Program, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Sasol Cracker in the consumer business. Now Sasol Cracker can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Sasol Cracker 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sasol Cracker can use these opportunities to build new business models that can help the communities that Sasol Cracker operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Sasol Cracker 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
– Sasol Cracker 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.
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 Sasol Cracker 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 Sasol Cracker has opened avenues for new revenue streams for the organization in the industry. This can help Sasol Cracker to build a more holistic ecosystem as suggested in the Sasol: U.S. Growth Program case study. Sasol Cracker 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, Sasol Cracker is facing challenges because of the dominance of functional experts in the organization. Sasol: U.S. Growth Program case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Sasol: U.S. Growth Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sasol: U.S. Growth Program are -
Increasing wage structure of Sasol Cracker
– 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 Sasol Cracker.
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. Sasol Cracker 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 Sasol Cracker business can come under increasing regulations regarding data privacy, data security, etc.
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 Sasol Cracker.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sasol: U.S. Growth Program, Sasol Cracker 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 .
Environmental challenges
– Sasol Cracker 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. Sasol Cracker can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Sasol Cracker 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.
Shortening product life cycle
– it is one of the major threat that Sasol Cracker is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sasol Cracker 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sasol Cracker with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Sasol Cracker in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Sasol Cracker 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.
Stagnating economy with rate increase
– Sasol Cracker can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program 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 Sasol: U.S. Growth Program 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 Sasol Cracker needs to make to build a sustainable competitive advantage.
