Ransom on the High Seas: The Case of Piracy in Somalia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ransom on the High Seas: The Case of Piracy in Somalia
The setting of this case is off the coast of the failed state of Somalia, where incidents of piracy have increased dramatically over the past few years. In this case a group of 14 pirates have hijacked a cargo ship full of machinery, but have yet to make any demands. They hold the multinational crew of 20 (whose captain and two officers are American), the ship, and the cargo hostage. The Chief Operating Officer of an international shipping company must choose among alternative strategies to get the crew, cargo and ship, back safely with as little cost as possible.
Authors :: Alvaro Cuervo-Cazurra, Michael Train, Jeanne M. McNett
Swot Analysis of "Ransom on the High Seas: The Case of Piracy in Somalia" written by Alvaro Cuervo-Cazurra, Michael Train, Jeanne M. McNett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cargo Ship facing as an external strategic factors. Some of the topics covered in Ransom on the High Seas: The Case of Piracy in Somalia case study are - Strategic Management Strategies, Leadership, Organizational culture, Risk management, Social responsibility and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ransom on the High Seas: The Case of Piracy in Somalia casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, talent flight as more people leaving formal jobs, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Ransom on the High Seas: The Case of Piracy in Somalia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ransom on the High Seas: The Case of Piracy in Somalia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cargo Ship, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cargo Ship 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 Ransom on the High Seas: The Case of Piracy in Somalia can be done for the following purposes –
1. Strategic planning using facts provided in Ransom on the High Seas: The Case of Piracy in Somalia case study
2. Improving business portfolio management of Cargo Ship
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 Cargo Ship
Strengths Ransom on the High Seas: The Case of Piracy in Somalia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cargo Ship in Ransom on the High Seas: The Case of Piracy in Somalia Harvard Business Review case study are -
Effective Research and Development (R&D)
– Cargo Ship 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 Ransom on the High Seas: The Case of Piracy in Somalia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Cargo Ship has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cargo Ship 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.
Ability to lead change in Strategy & Execution field
– Cargo Ship 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 Cargo Ship in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Cargo Ship is one of the leading recruiters in the industry. Managers in the Ransom on the High Seas: The Case of Piracy in Somalia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Ransom on the High Seas: The Case of Piracy in Somalia firm has clearly differentiated products in the market place. This has enabled Cargo Ship to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cargo Ship to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Cargo Ship 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.
Superior customer experience
– The customer experience strategy of Cargo Ship in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Cargo Ship 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 Alvaro Cuervo-Cazurra, Michael Train, Jeanne M. McNett 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.
Organizational Resilience of Cargo Ship
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cargo Ship does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Cargo Ship 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.
Training and development
– Cargo Ship has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ransom on the High Seas: The Case of Piracy in Somalia 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cargo Ship digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cargo Ship 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.
Weaknesses Ransom on the High Seas: The Case of Piracy in Somalia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ransom on the High Seas: The Case of Piracy in Somalia are -
Low market penetration in new markets
– Outside its home market of Cargo Ship, firm in the HBR case study Ransom on the High Seas: The Case of Piracy in Somalia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ransom on the High Seas: The Case of Piracy in Somalia 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 Cargo Ship has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Cargo Ship is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cargo Ship needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cargo Ship to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cargo Ship is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ransom on the High Seas: The Case of Piracy in Somalia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Cargo Ship products
– To increase the profitability and margins on the products, Cargo Ship needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Cargo Ship supply chain. Even after few cautionary changes mentioned in the HBR case study - Ransom on the High Seas: The Case of Piracy in Somalia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cargo Ship vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ransom on the High Seas: The Case of Piracy in Somalia, in the dynamic environment Cargo Ship has struggled to respond to the nimble upstart competition. Cargo Ship 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, Cargo Ship 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.
Interest costs
– Compare to the competition, Cargo Ship 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.
No frontier risks strategy
– After analyzing the HBR case study Ransom on the High Seas: The Case of Piracy in Somalia, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Products dominated business model
– Even though Cargo Ship has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ransom on the High Seas: The Case of Piracy in Somalia should strive to include more intangible value offerings along with its core products and services.
Opportunities Ransom on the High Seas: The Case of Piracy in Somalia | 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 Ransom on the High Seas: The Case of Piracy in Somalia are -
Better consumer reach
– The expansion of the 5G network will help Cargo Ship to increase its market reach. Cargo Ship 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.
Buying journey improvements
– Cargo Ship can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ransom on the High Seas: The Case of Piracy in Somalia 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.
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 Cargo Ship in the consumer business. Now Cargo Ship can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cargo Ship can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Cargo Ship 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.
Developing new processes and practices
– Cargo Ship 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.
Learning at scale
– Online learning technologies has now opened space for Cargo Ship 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.
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. Cargo Ship can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cargo Ship 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, Ransom on the High Seas: The Case of Piracy in Somalia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cargo Ship 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.
Leveraging digital technologies
– Cargo Ship 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cargo Ship is facing challenges because of the dominance of functional experts in the organization. Ransom on the High Seas: The Case of Piracy in Somalia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cargo Ship 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.
Threats Ransom on the High Seas: The Case of Piracy in Somalia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ransom on the High Seas: The Case of Piracy in Somalia are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cargo Ship 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.
Shortening product life cycle
– it is one of the major threat that Cargo Ship is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Cargo Ship 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 dependence on third party suppliers
– Cargo Ship 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.
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 Cargo Ship 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 Cargo Ship in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cargo Ship can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Ransom on the High Seas: The Case of Piracy in Somalia .
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. Cargo Ship 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.
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 Cargo Ship.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cargo Ship with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Cargo Ship 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.
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. Cargo Ship needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Ransom on the High Seas: The Case of Piracy in Somalia 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 Ransom on the High Seas: The Case of Piracy in Somalia 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 Ransom on the High Seas: The Case of Piracy in Somalia 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 Ransom on the High Seas: The Case of Piracy in Somalia 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 Ransom on the High Seas: The Case of Piracy in Somalia 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 Cargo Ship needs to make to build a sustainable competitive advantage.
