Tenaris: Creating a Global Leader from an Emerging Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tenaris: Creating a Global Leader from an Emerging Market
In December 2003, Paolo Rocca, chairman and CEO of Tenaris S.A., could look back on a momentous first year for the company. Much had been accomplished since the formation of this leading global supplier of seamless steel pipe and related services in December 2002 via an exchange of the shares and American Depository Receipts of three separately listed pipe companies--Siderca in Argentina, Tamsa in Mexico, and Dalmine in Italy--for shares in the new company. The new company had eight manufacturing facilities variously located in South and North America, Europe, and Asia and distribution and sales centers present in over 20 countries. It enjoyed annual sales of $3.1 billion to the oil and gas, energy, and mechanical industries, a market-leading 19% share globally in seamless OCTG pipes (sold to the oil and gas industry), with particularly strong market shares in a number of national OCTG markets where it had local manufacturing. Despite these accomplishments, Tenaris faced challenges ahead as it sought to transform itself strategically and organizationally. Faced with a mature seamless steel pipe market, Rocca looked to further geographic expansion and a move into service provision to maintain growth and consolidate its market position. Both of these would require new skills and new ways of managing, especially on the human resources side. Building on the legal unification to transform Tenaris' 14,500 employees from eight heritage companies into one centrally aligned, unified operation was also proving to be a major managerial challenge as the company sought to realize the potential advantages of a sophisticated new organizational design. Further, the new organization needed to generate significant cost savings from the consolidation. What should Rocca expect from himself and his managers in the face of these changes? How would they need to manage differently in a unified global organization?
Swot Analysis of "Tenaris: Creating a Global Leader from an Emerging Market" written by John Roberts, Charlie Catalano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tenaris Rocca facing as an external strategic factors. Some of the topics covered in Tenaris: Creating a Global Leader from an Emerging Market case study are - Strategic Management Strategies, Cross-cultural management, Globalization, Growth strategy, Organizational structure, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tenaris: Creating a Global Leader from an Emerging Market casestudy better are - – increasing commodity prices, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Tenaris: Creating a Global Leader from an Emerging Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tenaris: Creating a Global Leader from an Emerging Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tenaris Rocca, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market can be done for the following purposes –
1. Strategic planning using facts provided in Tenaris: Creating a Global Leader from an Emerging Market case study
2. Improving business portfolio management of Tenaris Rocca
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 Tenaris Rocca
Strengths Tenaris: Creating a Global Leader from an Emerging Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tenaris Rocca in Tenaris: Creating a Global Leader from an Emerging Market Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Tenaris: Creating a Global Leader from an Emerging Market 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
– Tenaris Rocca 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 John Roberts, Charlie Catalano 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Tenaris: Creating a Global Leader from an Emerging Market firm has clearly differentiated products in the market place. This has enabled Tenaris Rocca to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tenaris Rocca to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Tenaris Rocca in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Tenaris Rocca in the sector have low bargaining power. Tenaris: Creating a Global Leader from an Emerging Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tenaris Rocca to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Tenaris Rocca has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tenaris: Creating a Global Leader from an Emerging Market 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.
Ability to recruit top talent
– Tenaris Rocca is one of the leading recruiters in the industry. Managers in the Tenaris: Creating a Global Leader from an Emerging Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Tenaris Rocca is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Tenaris Rocca 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)
– Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Tenaris Rocca
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tenaris Rocca does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Tenaris Rocca is one of the most innovative firm in sector. Manager in Tenaris: Creating a Global Leader from an Emerging Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Tenaris: Creating a Global Leader from an Emerging Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tenaris: Creating a Global Leader from an Emerging Market are -
High operating costs
– Compare to the competitors, firm in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris Rocca 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market can leverage the sales team experience to cultivate customer relationships as Tenaris Rocca is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tenaris: Creating a Global Leader from an Emerging Market, in the dynamic environment Tenaris Rocca has struggled to respond to the nimble upstart competition. Tenaris Rocca has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Tenaris Rocca 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 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 Tenaris Rocca supply chain. Even after few cautionary changes mentioned in the HBR case study - Tenaris: Creating a Global Leader from an Emerging Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tenaris Rocca vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Tenaris Rocca 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. Tenaris Rocca 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market, is just above the industry average. Tenaris Rocca 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.
Increasing silos among functional specialists
– The organizational structure of Tenaris Rocca is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tenaris Rocca needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tenaris Rocca to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Tenaris Rocca 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.
Need for greater diversity
– Tenaris Rocca has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, John Roberts, Charlie Catalano suggests that, Tenaris Rocca 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.
Opportunities Tenaris: Creating a Global Leader from an Emerging Market | 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 Tenaris: Creating a Global Leader from an Emerging Market are -
Developing new processes and practices
– Tenaris Rocca 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tenaris Rocca can use these opportunities to build new business models that can help the communities that Tenaris Rocca operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Tenaris Rocca has opened avenues for new revenue streams for the organization in the industry. This can help Tenaris Rocca to build a more holistic ecosystem as suggested in the Tenaris: Creating a Global Leader from an Emerging Market case study. Tenaris Rocca can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tenaris Rocca 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, Tenaris: Creating a Global Leader from an Emerging Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tenaris Rocca 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 Tenaris Rocca to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tenaris Rocca 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.
Building a culture of innovation
– managers at Tenaris Rocca 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.
Manufacturing automation
– Tenaris Rocca 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.
Better consumer reach
– The expansion of the 5G network will help Tenaris Rocca to increase its market reach. Tenaris Rocca 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.
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 Tenaris Rocca 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tenaris Rocca 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tenaris Rocca in the consumer business. Now Tenaris Rocca can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market are -
Stagnating economy with rate increase
– Tenaris Rocca 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tenaris: Creating a Global Leader from an Emerging Market, Tenaris Rocca 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 .
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 Tenaris Rocca.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tenaris Rocca in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tenaris Rocca business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Tenaris Rocca
– 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 Tenaris Rocca.
Regulatory challenges
– Tenaris Rocca 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.
Shortening product life cycle
– it is one of the major threat that Tenaris Rocca is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Tenaris Rocca in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Tenaris Rocca high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tenaris Rocca with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Tenaris Rocca has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tenaris Rocca 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.
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. Tenaris Rocca needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris Rocca needs to make to build a sustainable competitive advantage.
