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 - – central banks are concerned over increasing inflation, technology disruption, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, there is backlash against globalization, increasing household debt because of falling income levels,
wage bills are increasing, challanges to central banks by blockchain based private currencies, 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 -
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.
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.
Successful track record of launching new products
– Tenaris Rocca has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tenaris Rocca 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)
– 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.
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.
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.
Diverse revenue streams
– Tenaris Rocca is present in almost all the verticals within the industry. This has provided firm in Tenaris: Creating a Global Leader from an Emerging Market 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.
Ability to lead change in Strategy & Execution field
– Tenaris Rocca 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 Tenaris Rocca in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Highly skilled collaborators
– Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Tenaris Rocca has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tenaris Rocca to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
Low market penetration in new markets
– Outside its home market of Tenaris Rocca, firm in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tenaris Rocca is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tenaris: Creating a Global Leader from an Emerging Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market, it seems that the employees of Tenaris Rocca 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.
Interest costs
– Compare to the competition, Tenaris Rocca has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Lack of clear differentiation of Tenaris Rocca products
– To increase the profitability and margins on the products, Tenaris Rocca needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
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. Tenaris Rocca can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Tenaris Rocca 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.
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.
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.
Leveraging digital technologies
– Tenaris Rocca can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Tenaris Rocca can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tenaris: Creating a Global Leader from an Emerging Market suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at 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.
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.
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. Tenaris Rocca can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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. Tenaris Rocca 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.
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.
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.
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.
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.
Environmental challenges
– Tenaris Rocca 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. Tenaris Rocca can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
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.
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 Tenaris Rocca 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 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.