Should Cairn India Venture into Offshore Drilling? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
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 - – increasing energy prices, challanges to central banks by blockchain based private currencies, wage bills are increasing, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing transportation and logistics costs, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
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.
Highly skilled collaborators
– Offshore Cairn 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 Should Cairn India Venture into Offshore Drilling? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Offshore Cairn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Offshore Cairn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Offshore Cairn is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
High switching costs
– The high switching costs that Offshore Cairn 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.
Ability to lead change in Strategy & Execution field
– Offshore Cairn 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 Offshore Cairn in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, Offshore Cairn 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. Offshore Cairn 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.
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 Offshore Cairn supply chain. Even after few cautionary changes mentioned in the HBR case study - Should Cairn India Venture into Offshore Drilling?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Offshore Cairn vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Offshore Cairn has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Should Cairn India Venture into Offshore Drilling? 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 Should Cairn India Venture into Offshore Drilling? can leverage the sales team experience to cultivate customer relationships as Offshore Cairn is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Should Cairn India Venture into Offshore Drilling? 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 Offshore Cairn has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Offshore Cairn 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, Offshore Cairn 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Should Cairn India Venture into Offshore Drilling?, in the dynamic environment Offshore Cairn has struggled to respond to the nimble upstart competition. Offshore Cairn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Offshore Cairn can use these opportunities to build new business models that can help the communities that Offshore Cairn operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Offshore Cairn 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Offshore Cairn can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Developing new processes and practices
– Offshore Cairn 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.
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.
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.
Creating value in data economy
– The success of analytics program of Offshore Cairn has opened avenues for new revenue streams for the organization in the industry. This can help Offshore Cairn to build a more holistic ecosystem as suggested in the Should Cairn India Venture into Offshore Drilling? case study. Offshore Cairn can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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 -
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Offshore Cairn will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
Regulatory challenges
– Offshore Cairn 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.
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.
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.
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.
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.
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.
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? .
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.
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.
