Swot Analysis of "Sunk Costs: The Plan to Dump the Brent Spar (B)" written by Michael D. Watkins, Samuel Passow includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dump Sunk facing as an external strategic factors. Some of the topics covered in Sunk Costs: The Plan to Dump the Brent Spar (B) case study are - Strategic Management Strategies, Crisis management, Leadership, Negotiations, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Sunk Costs: The Plan to Dump the Brent Spar (B) casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Sunk Costs: The Plan to Dump the Brent Spar (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sunk Costs: The Plan to Dump the Brent Spar (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dump Sunk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dump Sunk 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 Sunk Costs: The Plan to Dump the Brent Spar (B) can be done for the following purposes –
1. Strategic planning using facts provided in Sunk Costs: The Plan to Dump the Brent Spar (B) case study
2. Improving business portfolio management of Dump Sunk
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 Dump Sunk
Strengths Sunk Costs: The Plan to Dump the Brent Spar (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dump Sunk in Sunk Costs: The Plan to Dump the Brent Spar (B) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Dump Sunk 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.
Strong track record of project management
– Dump Sunk is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– Sunk Costs: The Plan to Dump the Brent Spar (B) firm has clearly differentiated products in the market place. This has enabled Dump Sunk to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dump Sunk to invest into research and development (R&D) and innovation.
Analytics focus
– Dump Sunk 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 Michael D. Watkins, Samuel Passow 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 Dump Sunk in the sector have low bargaining power. Sunk Costs: The Plan to Dump the Brent Spar (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dump Sunk to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Dump Sunk is one of the most innovative firm in sector. Manager in Sunk Costs: The Plan to Dump the Brent Spar (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Dump Sunk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dump Sunk has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Dump Sunk is one of the leading recruiters in the industry. Managers in the Sunk Costs: The Plan to Dump the Brent Spar (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Dump Sunk has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Dump Sunk in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Dump Sunk is present in almost all the verticals within the industry. This has provided firm in Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Dump Sunk
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dump Sunk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Sunk Costs: The Plan to Dump the Brent Spar (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sunk Costs: The Plan to Dump the Brent Spar (B) are -
Lack of clear differentiation of Dump Sunk products
– To increase the profitability and margins on the products, Dump Sunk needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Sunk Costs: The Plan to Dump the Brent Spar (B) can leverage the sales team experience to cultivate customer relationships as Dump Sunk is planning to shift buying processes online.
Interest costs
– Compare to the competition, Dump Sunk 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.
Increasing silos among functional specialists
– The organizational structure of Dump Sunk is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dump Sunk needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dump Sunk to focus more on services rather than just following the product oriented approach.
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 Dump Sunk supply chain. Even after few cautionary changes mentioned in the HBR case study - Sunk Costs: The Plan to Dump the Brent Spar (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dump Sunk vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Dump Sunk 's lucrative customers.
Slow to strategic competitive environment developments
– As Sunk Costs: The Plan to Dump the Brent Spar (B) HBR case study mentions - Dump Sunk 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.
Capital Spending Reduction
– Even during the low interest decade, Dump Sunk 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sunk Costs: The Plan to Dump the Brent Spar (B), in the dynamic environment Dump Sunk has struggled to respond to the nimble upstart competition. Dump Sunk has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sunk Costs: The Plan to Dump the Brent Spar (B), it seems that the employees of Dump Sunk 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Dump Sunk 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.
Opportunities Sunk Costs: The Plan to Dump the Brent Spar (B) | 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 Sunk Costs: The Plan to Dump the Brent Spar (B) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dump Sunk is facing challenges because of the dominance of functional experts in the organization. Sunk Costs: The Plan to Dump the Brent Spar (B) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dump Sunk can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dump Sunk can use these opportunities to build new business models that can help the communities that Dump Sunk operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Dump Sunk can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Dump Sunk 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. Dump Sunk 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.
Better consumer reach
– The expansion of the 5G network will help Dump Sunk to increase its market reach. Dump Sunk 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.
Creating value in data economy
– The success of analytics program of Dump Sunk has opened avenues for new revenue streams for the organization in the industry. This can help Dump Sunk to build a more holistic ecosystem as suggested in the Sunk Costs: The Plan to Dump the Brent Spar (B) case study. Dump Sunk can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Dump Sunk 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.
Developing new processes and practices
– Dump Sunk 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dump Sunk 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 Dump Sunk to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dump Sunk 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dump Sunk 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.
Building a culture of innovation
– managers at Dump Sunk 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.
Threats Sunk Costs: The Plan to Dump the Brent Spar (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sunk Costs: The Plan to Dump the Brent Spar (B) are -
Regulatory challenges
– Dump Sunk 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.
Consumer confidence and its impact on Dump Sunk 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.
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. Dump Sunk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Dump Sunk 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. Dump Sunk can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Dump Sunk 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.
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.
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. Dump Sunk needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Dump Sunk.
Technology acceleration in Forth Industrial Revolution
– Dump Sunk has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Dump Sunk 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.
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 Dump Sunk business can come under increasing regulations regarding data privacy, data security, 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 Dump Sunk in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sunk Costs: The Plan to Dump the Brent Spar (B), Dump Sunk 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 Dump Sunk 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.
Weighted SWOT Analysis of Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Sunk Costs: The Plan to Dump the Brent Spar (B) 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 Dump Sunk needs to make to build a sustainable competitive advantage.
