Rosneft: An Oil Major Rises in Russia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rosneft: An Oil Major Rises in Russia
The case study on Rosneft was written to focus on two central themes, (1) the impact of state ownership on the governance and functioning of large corporations in emerging markets, and (2) the growth of State Owned Multinational Corporations (SOMNCs) in the oil and gas industry. The study offers rich insights into the chaotic founding of Rosneft reflecting events that have a lot of parallels in other emerging markets that have been through transformative economic reforms. It chronicles the actions of two powerful leaders who have shaped the destiny of the company from a grab bag of odds and ends to a modern corporation that has become a global powerhouse in the oil and gas industry. In doing so, the case offers several important lessons both in leadership and strategy especially as it applies to mixed ownership companies in settings where the government plays an instrumental role in directing the destiny of corporations.
Swot Analysis of "Rosneft: An Oil Major Rises in Russia" written by Kannan Ramaswamy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rosneft Destiny facing as an external strategic factors. Some of the topics covered in Rosneft: An Oil Major Rises in Russia case study are - Strategic Management Strategies, Globalization, Leadership and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Rosneft: An Oil Major Rises in Russia casestudy better are - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing transportation and logistics costs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of Rosneft: An Oil Major Rises in Russia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rosneft: An Oil Major Rises in Russia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rosneft Destiny, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rosneft Destiny 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 Rosneft: An Oil Major Rises in Russia can be done for the following purposes –
1. Strategic planning using facts provided in Rosneft: An Oil Major Rises in Russia case study
2. Improving business portfolio management of Rosneft Destiny
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 Rosneft Destiny
Strengths Rosneft: An Oil Major Rises in Russia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rosneft Destiny in Rosneft: An Oil Major Rises in Russia Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Rosneft Destiny in the sector have low bargaining power. Rosneft: An Oil Major Rises in Russia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rosneft Destiny to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Rosneft Destiny is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Rosneft Destiny is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rosneft: An Oil Major Rises in Russia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Rosneft Destiny 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 Rosneft: An Oil Major Rises in Russia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Rosneft Destiny has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Rosneft: An Oil Major Rises in Russia 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 Rosneft Destiny digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rosneft Destiny 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.
Organizational Resilience of Rosneft Destiny
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rosneft Destiny does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Rosneft: An Oil Major Rises in Russia Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Rosneft Destiny 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.
Superior customer experience
– The customer experience strategy of Rosneft Destiny in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Rosneft Destiny 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.
Diverse revenue streams
– Rosneft Destiny is present in almost all the verticals within the industry. This has provided firm in Rosneft: An Oil Major Rises in Russia 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.
High switching costs
– The high switching costs that Rosneft Destiny 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.
Weaknesses Rosneft: An Oil Major Rises in Russia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rosneft: An Oil Major Rises in Russia are -
Lack of clear differentiation of Rosneft Destiny products
– To increase the profitability and margins on the products, Rosneft Destiny needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Rosneft Destiny 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.
Slow decision making process
– As mentioned earlier in the report, Rosneft Destiny 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. Rosneft Destiny even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Rosneft: An Oil Major Rises in Russia, is just above the industry average. Rosneft Destiny 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.
Slow to strategic competitive environment developments
– As Rosneft: An Oil Major Rises in Russia HBR case study mentions - Rosneft Destiny 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, Rosneft Destiny 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.
Products dominated business model
– Even though Rosneft Destiny 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 - Rosneft: An Oil Major Rises in Russia should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rosneft Destiny is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Rosneft: An Oil Major Rises in Russia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Rosneft Destiny 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.
Aligning sales with marketing
– It come across in the case study Rosneft: An Oil Major Rises in Russia 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 Rosneft: An Oil Major Rises in Russia can leverage the sales team experience to cultivate customer relationships as Rosneft Destiny is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Rosneft Destiny 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.
Opportunities Rosneft: An Oil Major Rises in Russia | 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 Rosneft: An Oil Major Rises in Russia are -
Developing new processes and practices
– Rosneft Destiny 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.
Better consumer reach
– The expansion of the 5G network will help Rosneft Destiny to increase its market reach. Rosneft Destiny 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rosneft Destiny is facing challenges because of the dominance of functional experts in the organization. Rosneft: An Oil Major Rises in Russia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rosneft Destiny can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Rosneft Destiny 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 Rosneft: An Oil Major Rises in Russia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rosneft Destiny to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Rosneft Destiny 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.
Learning at scale
– Online learning technologies has now opened space for Rosneft Destiny 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.
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 Rosneft Destiny in the consumer business. Now Rosneft Destiny can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Rosneft Destiny 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rosneft Destiny 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.
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. Rosneft Destiny 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. Rosneft Destiny 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rosneft Destiny 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.
Leveraging digital technologies
– Rosneft Destiny 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 Rosneft: An Oil Major Rises in Russia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rosneft: An Oil Major Rises in Russia are -
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 Rosneft Destiny.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rosneft Destiny 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Rosneft Destiny with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Rosneft: An Oil Major Rises in Russia, Rosneft Destiny 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 .
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. Rosneft Destiny needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Rosneft Destiny is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Rosneft Destiny 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.
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 Rosneft Destiny in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Rosneft Destiny 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
– Rosneft Destiny 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rosneft Destiny 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 Rosneft: An Oil Major Rises in Russia .
Technology acceleration in Forth Industrial Revolution
– Rosneft Destiny has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Rosneft Destiny needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Rosneft: An Oil Major Rises in Russia 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 Rosneft: An Oil Major Rises in Russia 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 Rosneft: An Oil Major Rises in Russia 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 Rosneft: An Oil Major Rises in Russia 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 Rosneft: An Oil Major Rises in Russia 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 Rosneft Destiny needs to make to build a sustainable competitive advantage.