Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change
Case A: Presents three strategic options considered by a fictitious international oil and gas corporation to address the issue of climate change: fight against action, wait and see, and dynamic proactive.
Authors :: Marc Le Menestrel, Sybille Van den Hove, Henri-Claude De Bettignies
Swot Analysis of "Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change" written by Marc Le Menestrel, Sybille Van den Hove, Henri-Claude De Bettignies includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Climate Oil facing as an external strategic factors. Some of the topics covered in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change case study are - Strategic Management Strategies, Globalization, Social responsibility, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change casestudy better are - – there is backlash against globalization, technology disruption, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Climate Oil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Climate Oil 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change can be done for the following purposes –
1. Strategic planning using facts provided in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change case study
2. Improving business portfolio management of Climate Oil
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 Oil
Strengths Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Climate Oil in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Climate Oil in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Climate Oil has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Climate Oil 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.
Effective Research and Development (R&D)
– Climate Oil 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Climate Oil is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Climate Oil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Climate Oil 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 Marc Le Menestrel, Sybille Van den Hove, Henri-Claude De Bettignies 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.
Low bargaining power of suppliers
– Suppliers of Climate Oil in the sector have low bargaining power. Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Climate Oil 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 Oil digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Climate Oil has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Climate Oil has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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.
Innovation driven organization
– Climate Oil is one of the most innovative firm in sector. Manager in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Climate Oil is present in almost all the verticals within the industry. This has provided firm in Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Climate Oil
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Climate Oil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change are -
Need for greater diversity
– Climate Oil 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.
Interest costs
– Compare to the competition, Climate Oil 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Climate Oil has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Climate Oil, firm in the HBR case study Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Climate Oil 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change can leverage the sales team experience to cultivate customer relationships as Climate Oil is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Climate Oil has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Marc Le Menestrel, Sybille Van den Hove, Henri-Claude De Bettignies suggests that, Climate Oil 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.
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 Climate Oil supply chain. Even after few cautionary changes mentioned in the HBR case study - Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Climate Oil vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Climate Oil is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Climate Oil needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Climate Oil to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Climate Oil products
– To increase the profitability and margins on the products, Climate Oil needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change | 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change are -
Building a culture of innovation
– managers at Climate Oil 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.
Learning at scale
– Online learning technologies has now opened space for Climate Oil 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 Climate Oil 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Climate Oil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Climate Oil 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Climate Oil 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 Oil to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Climate Oil 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.
Better consumer reach
– The expansion of the 5G network will help Climate Oil to increase its market reach. Climate Oil will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Climate Oil can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Climate Oil can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 Oil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Climate Oil is facing challenges because of the dominance of functional experts in the organization. Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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.
Using analytics as competitive advantage
– Climate Oil 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Climate Oil to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Climate Oil 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, Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change are -
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 Climate Oil.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Climate Oil with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Climate Oil
– 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 Climate Oil.
Environmental challenges
– Climate Oil 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. Climate Oil can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Climate Oil 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.
Regulatory challenges
– Climate Oil 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Climate Oil 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change, Climate Oil 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Climate Oil 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.
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. Climate Oil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Consumer confidence and its impact on Climate Oil 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.
Weighted SWOT Analysis of Should Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Business Influence the Science and Politics of Global Environmental Change? (A): The Oil Industry and Climate Change 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 Oil needs to make to build a sustainable competitive advantage.
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