Should Cairn India Venture into Offshore Drilling? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Should Cairn India Venture into Offshore Drilling?
Global consumption of petroleum products stood at just more than 90 million barrels per day by the end of 2013, and was expected to increase to 91 million or more by the end of 2014. Petroleum companies were constantly exploring the planet for new oil reserves to meet this voracious demand for fossil fuels. Because three-quarters of the earth was water, it was evident that these oil reserves were largely underwater; however, until the end of 2013, very few players had explored this opportunity. Although reaching deep-water drilling sites posed various challenges - environmental, political, technological, etc. - offshore exploration was the future of the oil and gas industry.Because of its very successful campaigns, Cairn India was ideally positioned for offshore exploration. Capturing and capitalizing on the opportunity of offshore exploration would give it an edge, but the question remained: Would it be better to gain the prime mover advantage or wait for other players to start the process so that it could learn from others' mistakes and reap benefits later? Sandeep Puri is affiliated with Institute of Management Technology, Ghaziabad.
Swot Analysis of "Should Cairn India Venture into Offshore Drilling?" written by Sandeep Puri, Srinivas Raghavan, Kartikeyun Arumunganain Muruganandan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Offshore Cairn facing as an external strategic factors. Some of the topics covered in Should Cairn India Venture into Offshore Drilling? case study are - Strategic Management Strategies, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Should Cairn India Venture into Offshore Drilling? casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing energy prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Should Cairn India Venture into Offshore Drilling?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should Cairn India Venture into Offshore Drilling? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Offshore Cairn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Offshore Cairn 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 Should Cairn India Venture into Offshore Drilling? can be done for the following purposes –
1. Strategic planning using facts provided in Should Cairn India Venture into Offshore Drilling? case study
2. Improving business portfolio management of Offshore Cairn
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 Offshore Cairn
Strengths Should Cairn India Venture into Offshore Drilling? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Offshore Cairn in Should Cairn India Venture into Offshore Drilling? Harvard Business Review case study are -
Training and development
– Offshore Cairn has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Should Cairn India Venture into Offshore Drilling? 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.
Diverse revenue streams
– Offshore Cairn is present in almost all the verticals within the industry. This has provided firm in Should Cairn India Venture into Offshore Drilling? 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.
Organizational Resilience of Offshore Cairn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Offshore Cairn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Offshore Cairn 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.
Effective Research and Development (R&D)
– Offshore Cairn 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 Should Cairn India Venture into Offshore Drilling? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Should Cairn India Venture into Offshore Drilling? 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.
Successful track record of launching new products
– Offshore Cairn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Offshore Cairn 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.
Analytics focus
– Offshore Cairn 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 Sandeep Puri, Srinivas Raghavan, Kartikeyun Arumunganain Muruganandan 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Offshore Cairn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Offshore Cairn 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.
Innovation driven organization
– Offshore Cairn is one of the most innovative firm in sector. Manager in Should Cairn India Venture into Offshore Drilling? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Should Cairn India Venture into Offshore Drilling? firm has clearly differentiated products in the market place. This has enabled Offshore Cairn to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Offshore Cairn to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Offshore Cairn in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Should Cairn India Venture into Offshore Drilling? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should Cairn India Venture into Offshore Drilling? are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Should Cairn India Venture into Offshore Drilling?, is just above the industry average. Offshore Cairn 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Should Cairn India Venture into Offshore Drilling?, it seems that the employees of Offshore Cairn 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Offshore Cairn is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Should Cairn India Venture into Offshore Drilling? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Offshore Cairn 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.
Lack of clear differentiation of Offshore Cairn products
– To increase the profitability and margins on the products, Offshore Cairn needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Offshore Cairn 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.
No frontier risks strategy
– After analyzing the HBR case study Should Cairn India Venture into Offshore Drilling?, 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 cash cycle compare to competitors
Offshore Cairn 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.
Slow to strategic competitive environment developments
– As Should Cairn India Venture into Offshore Drilling? HBR case study mentions - Offshore Cairn takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Offshore Cairn 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 - Should Cairn India Venture into Offshore Drilling? should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Offshore Cairn is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Offshore Cairn needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Offshore Cairn to focus more on services rather than just following the product oriented approach.
Opportunities Should Cairn India Venture into Offshore Drilling? | 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 Should Cairn India Venture into Offshore Drilling? are -
Loyalty marketing
– Offshore Cairn 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.
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. Offshore Cairn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Offshore Cairn has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Should Cairn India Venture into Offshore Drilling? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Offshore Cairn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Offshore Cairn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Should Cairn India Venture into Offshore Drilling? 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.
Building a culture of innovation
– managers at Offshore Cairn 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 Offshore Cairn 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 Offshore Cairn to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Offshore Cairn 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.
Leveraging digital technologies
– Offshore Cairn 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.
Learning at scale
– Online learning technologies has now opened space for Offshore Cairn 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.
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 Offshore Cairn 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Offshore Cairn is facing challenges because of the dominance of functional experts in the organization. Should Cairn India Venture into Offshore Drilling? 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.
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. Offshore Cairn can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Offshore Cairn 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.
Threats Should Cairn India Venture into Offshore Drilling? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should Cairn India Venture into Offshore Drilling? are -
High dependence on third party suppliers
– Offshore Cairn 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.
Stagnating economy with rate increase
– Offshore Cairn 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 Offshore Cairn 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Offshore Cairn 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 Should Cairn India Venture into Offshore Drilling? .
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 Offshore Cairn.
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 Offshore Cairn in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Offshore Cairn 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.
Shortening product life cycle
– it is one of the major threat that Offshore Cairn is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Offshore Cairn has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Offshore Cairn 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.
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. Offshore Cairn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Offshore Cairn business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Offshore Cairn
– 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 Offshore Cairn.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Offshore Cairn with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Should Cairn India Venture into Offshore Drilling? 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 Should Cairn India Venture into Offshore Drilling? 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 Should Cairn India Venture into Offshore Drilling? 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 Should Cairn India Venture into Offshore Drilling? 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 Should Cairn India Venture into Offshore Drilling? 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 Offshore Cairn needs to make to build a sustainable competitive advantage.