Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A)
In 2001, a Nigerian holding company was deciding how much to pay for a major Nigerian oil marketing firm. Explores the challenges facing a fast-growing, leveraged buyout firm operating in a global economy but constrained by imperfect local financial and legal institutions.
Swot Analysis of "Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A)" written by Peter Hecht, Onche Ugbabe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nigerian Buyout facing as an external strategic factors. Some of the topics covered in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) case study are - Strategic Management Strategies, Entrepreneurial finance, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, technology disruption, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nigerian Buyout, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nigerian Buyout 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) can be done for the following purposes –
1. Strategic planning using facts provided in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) case study
2. Improving business portfolio management of Nigerian Buyout
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nigerian Buyout
Strengths Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nigerian Buyout in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) Harvard Business Review case study are -
Highly skilled collaborators
– Nigerian Buyout 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Nigerian Buyout 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.
Low bargaining power of suppliers
– Suppliers of Nigerian Buyout in the sector have low bargaining power. Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nigerian Buyout to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Nigerian Buyout has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nigerian Buyout 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.
Operational resilience
– The operational resilience strategy in the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Nigerian Buyout digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nigerian Buyout 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.
Analytics focus
– Nigerian Buyout 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 Peter Hecht, Onche Ugbabe 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.
High switching costs
– The high switching costs that Nigerian Buyout has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
High brand equity
– Nigerian Buyout has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nigerian Buyout to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Nigerian Buyout 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) firm has clearly differentiated products in the market place. This has enabled Nigerian Buyout to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Nigerian Buyout to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Nigerian Buyout 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 Nigerian Buyout in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A), in the dynamic environment Nigerian Buyout has struggled to respond to the nimble upstart competition. Nigerian Buyout has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Nigerian Buyout 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 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 Nigerian Buyout supply chain. Even after few cautionary changes mentioned in the HBR case study - Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nigerian Buyout vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Nigerian Buyout is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Nigerian Buyout needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nigerian Buyout to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Nigerian Buyout products
– To increase the profitability and margins on the products, Nigerian Buyout needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Nigerian Buyout has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Nigerian Buyout 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Nigerian Buyout has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Nigerian Buyout 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.
Capital Spending Reduction
– Even during the low interest decade, Nigerian Buyout 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.
No frontier risks strategy
– After analyzing the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) | 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) are -
Developing new processes and practices
– Nigerian Buyout can develop new processes and procedures in Finance & Accounting 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.
Loyalty marketing
– Nigerian Buyout 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.
Building a culture of innovation
– managers at Nigerian Buyout 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 Finance & Accounting segment.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nigerian Buyout 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. Nigerian Buyout 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nigerian Buyout can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Nigerian Buyout can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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.
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. Nigerian Buyout can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Nigerian Buyout to increase its market reach. Nigerian Buyout 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 Nigerian Buyout to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Nigerian Buyout has opened avenues for new revenue streams for the organization in the industry. This can help Nigerian Buyout to build a more holistic ecosystem as suggested in the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) case study. Nigerian Buyout can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Nigerian Buyout 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nigerian Buyout is facing challenges because of the dominance of functional experts in the organization. Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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.
Leveraging digital technologies
– Nigerian Buyout 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.
Threats Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nigerian Buyout in the Finance & Accounting industry. The Finance & Accounting 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A), Nigerian Buyout may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Nigerian Buyout 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nigerian Buyout with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Nigerian Buyout.
Consumer confidence and its impact on Nigerian Buyout 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.
Shortening product life cycle
– it is one of the major threat that Nigerian Buyout is facing in Finance & Accounting 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.
Technology acceleration in Forth Industrial Revolution
– Nigerian Buyout has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Nigerian Buyout needs to keep up with the evolution of technology in the Finance & Accounting 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. Nigerian Buyout needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Nigerian Buyout business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nigerian Buyout can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Nigerian Buyout in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (A) 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 Nigerian Buyout needs to make to build a sustainable competitive advantage.