ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin
Russia has emerged as a dominant player especially in the natural gas segment of the global oil and gas industry. Its position of power has been cemented over the last decade on a variety of fronts ranging from the execution of the first offshore project, the first LNG project, the first Arctic exploration program, and the emergence of global giants, namely Gazprom and Rosneft, that have exerted considerable influence in attracting global super majors to Russia. The case study explores the execution of the two major Sakhalin projects that were instrumental in establishing Russia's position as a pre-eminent source of natural gas. These projects were among the earliest ones on a global scale that involved multiple global partners and were executed in a forbidding part of the country, offshore Russia in the Sea of Okhotsk. Both development deals were struck when Russia was in the midst of significant economic chaos following the breakup of the USSR into constituent republics. This period in Russian history was marked by significant opportunities as well as significant risks.
Swot Analysis of "ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin" written by Kannan Ramaswamy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Russia Sakhalin facing as an external strategic factors. Some of the topics covered in ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, there is backlash against globalization, there is increasing trade war between United States & China, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Russia Sakhalin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Russia Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin can be done for the following purposes –
1. Strategic planning using facts provided in ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin case study
2. Improving business portfolio management of Russia Sakhalin
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 Russia Sakhalin
Strengths ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Russia Sakhalin in ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin Harvard Business Review case study are -
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Russia Sakhalin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Russia Sakhalin 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.
Highly skilled collaborators
– Russia Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Russia Sakhalin is present in almost all the verticals within the industry. This has provided firm in ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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.
Effective Research and Development (R&D)
– Russia Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Russia Sakhalin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Russia Sakhalin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Russia Sakhalin 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.
Cross disciplinary teams
– Horizontal connected teams at the Russia Sakhalin 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.
Organizational Resilience of Russia Sakhalin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Russia Sakhalin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin firm has clearly differentiated products in the market place. This has enabled Russia Sakhalin to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Russia Sakhalin to invest into research and development (R&D) and innovation.
Analytics focus
– Russia Sakhalin 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 Kannan Ramaswamy 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.
Ability to recruit top talent
– Russia Sakhalin is one of the leading recruiters in the industry. Managers in the ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Strategy & Execution field
– Russia Sakhalin 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 Russia Sakhalin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin are -
Products dominated business model
– Even though Russia Sakhalin 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 - ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin, in the dynamic environment Russia Sakhalin has struggled to respond to the nimble upstart competition. Russia Sakhalin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin can leverage the sales team experience to cultivate customer relationships as Russia Sakhalin is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Russia Sakhalin, firm in the HBR case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin HBR case study mentions - Russia Sakhalin takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High bargaining power of channel partners
– Because of the regulatory requirements, Kannan Ramaswamy suggests that, Russia Sakhalin 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.
Interest costs
– Compare to the competition, Russia Sakhalin has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Russia Sakhalin is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Russia Sakhalin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Russia Sakhalin to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Russia Sakhalin 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. Russia Sakhalin 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Russia Sakhalin needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 Russia Sakhalin 's lucrative customers.
Opportunities ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin | 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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. Russia Sakhalin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Russia Sakhalin 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Russia Sakhalin 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, ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin, 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 Russia Sakhalin 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 Russia Sakhalin to hire the very best people irrespective of their geographical location.
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 Russia Sakhalin in the consumer business. Now Russia Sakhalin can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Russia Sakhalin can use these opportunities to build new business models that can help the communities that Russia Sakhalin operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Russia Sakhalin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Russia Sakhalin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Russia Sakhalin 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. Russia Sakhalin 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.
Buying journey improvements
– Russia Sakhalin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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.
Creating value in data economy
– The success of analytics program of Russia Sakhalin has opened avenues for new revenue streams for the organization in the industry. This can help Russia Sakhalin to build a more holistic ecosystem as suggested in the ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin case study. Russia Sakhalin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Russia Sakhalin to increase its market reach. Russia Sakhalin 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 Russia Sakhalin 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.
Building a culture of innovation
– managers at Russia Sakhalin can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Threats ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin are -
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 Russia Sakhalin 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 Russia Sakhalin in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin, Russia Sakhalin 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 .
Regulatory challenges
– Russia Sakhalin 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.
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 Russia Sakhalin.
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.
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. Russia Sakhalin 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Russia Sakhalin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Russia Sakhalin 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.
Consumer confidence and its impact on Russia Sakhalin 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.
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.
Shortening product life cycle
– it is one of the major threat that Russia Sakhalin is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Russia Sakhalin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 ExxonMobil and Royal Dutch Shell: The Tale of Two Projects in Sakhalin 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 Russia Sakhalin needs to make to build a sustainable competitive advantage.
