Global Climate Change and BP SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Global Climate Change and BP

Following the sudden resignation of Sir John Browne, Tony Hayward, BP CEO, must decide how global climate change management will figure into BP's corporate strategy. Climate change management was a major part of BP's strategy under Browne: In 1997 Browne broke from his colleagues, publicly declaring that global climate change was a serious problem and pledging BP to play a significant role in the search for solutions. BP successfully reduced its own carbon emissions, and championed cap-and-trade style regulation over taxation or command-and-control. Despite this progress, as the climate issue gains in political prominence and the Kyoto Protocol nears expiration, Hayward must consider what actions to take in BP's business strategy and in the political arena to manage ongoing climate risk.

Authors :: Forest Reinhardt, Mikell Hyman

Topics :: Strategy & Execution

Tags :: Competitive strategy, Government, International business, Social responsibility, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Global Climate Change and BP" written by Forest Reinhardt, Mikell Hyman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Climate Bp facing as an external strategic factors. Some of the topics covered in Global Climate Change and BP case study are - Strategic Management Strategies, Competitive strategy, Government, International business, Social responsibility, Sustainability and Strategy & Execution.

Some of the macro environment factors that can be used to understand the Global Climate Change and BP casestudy better are - – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc

---

---

---

---

Introduction to SWOT Analysis of Global Climate Change and BP

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Global Climate Change and BP case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Climate Bp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Climate Bp 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 Global Climate Change and BP can be done for the following purposes –
1. Strategic planning using facts provided in Global Climate Change and BP case study
2. Improving business portfolio management of Climate Bp
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 Climate Bp

---

Strengths Global Climate Change and BP | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Climate Bp in Global Climate Change and BP Harvard Business Review case study are -

Cross disciplinary teams

– Horizontal connected teams at the Climate Bp 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 Climate Bp in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to lead change in Strategy & Execution field

– Climate Bp 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 Climate Bp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Operational resilience

– The operational resilience strategy in the Global Climate Change and BP 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.

High brand equity

– Climate Bp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Climate Bp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

– Suppliers of Climate Bp in the sector have low bargaining power. Global Climate Change and BP has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Climate Bp to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Climate Bp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Climate Bp 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.

Effective Research and Development (R&D)

– Climate Bp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Global Climate Change and BP - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management

– Climate Bp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Successful track record of launching new products

– Climate Bp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Climate Bp 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.

Sustainable margins compare to other players in Strategy & Execution industry

– Global Climate Change and BP firm has clearly differentiated products in the market place. This has enabled Climate Bp to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Climate Bp to invest into research and development (R&D) and innovation.

Organizational Resilience of Climate Bp

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Climate Bp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

---

---

Weaknesses Global Climate Change and BP | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Global Climate Change and BP are -

Increasing silos among functional specialists

– The organizational structure of Climate Bp is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Climate Bp needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Climate Bp to focus more on services rather than just following the product oriented approach.

High operating costs

– Compare to the competitors, firm in the HBR case study Global Climate Change and BP 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 Climate Bp 's lucrative customers.

Need for greater diversity

– Climate Bp has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High cash cycle compare to competitors

Climate Bp 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 Global Climate Change and BP, it seems that the employees of Climate Bp don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Global Climate Change and BP, in the dynamic environment Climate Bp has struggled to respond to the nimble upstart competition. Climate Bp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

No frontier risks strategy

– After analyzing the HBR case study Global Climate Change and BP, 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 bargaining power of channel partners

– Because of the regulatory requirements, Forest Reinhardt, Mikell Hyman suggests that, Climate Bp 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.

Slow decision making process

– As mentioned earlier in the report, Climate Bp has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Climate Bp even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Capital Spending Reduction

– Even during the low interest decade, Climate Bp 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Climate Bp is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Global Climate Change and BP 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 Global Climate Change and BP | 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 Global Climate Change and BP are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Climate Bp 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, Global Climate Change and BP, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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. Climate Bp can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Climate Bp can use these opportunities to build new business models that can help the communities that Climate Bp operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.

Low interest rates

– Even though inflation is raising its head in most developed economies, Climate Bp 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.

Better consumer reach

– The expansion of the 5G network will help Climate Bp to increase its market reach. Climate Bp 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Climate Bp is facing challenges because of the dominance of functional experts in the organization. Global Climate Change and BP 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Climate Bp 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 Climate Bp to hire the very best people irrespective of their geographical location.

Creating value in data economy

– The success of analytics program of Climate Bp has opened avenues for new revenue streams for the organization in the industry. This can help Climate Bp to build a more holistic ecosystem as suggested in the Global Climate Change and BP case study. Climate Bp can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– Climate Bp 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.

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. Climate Bp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Loyalty marketing

– Climate Bp 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.

Buying journey improvements

– Climate Bp can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Global Climate Change and BP 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Climate Bp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

---

Threats Global Climate Change and BP External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Global Climate Change and BP are -

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. Climate Bp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Climate Bp has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Climate Bp 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Climate Bp 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 Climate Bp business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Climate Bp is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Climate Bp in the Strategy & Execution sector and impact the bottomline of the organization.

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. Climate Bp needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Climate Bp 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 Global Climate Change and BP .

Stagnating economy with rate increase

– Climate Bp 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.

High dependence on third party suppliers

– Climate Bp 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 Climate Bp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Global Climate Change and BP 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 Global Climate Change and BP 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 Global Climate Change and BP 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 Global Climate Change and BP 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 Global Climate Change and BP 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 Climate Bp needs to make to build a sustainable competitive advantage.

--- ---