Case Study Description of TransCanada's Keystone XL Pipeline: Unfinished Business
The senior management team at TransCanada Corporation in Calgary, Alberta, was stunned by the U.S. Department of State announcement that it was deferring its decision on a presidential permit, which was required for all construction of infrastructure crossing U.S. international borders. The infrastructure in question was the proposed Keystone XL pipeline, which would create a 2,735-kilometre direct route for Canadian crude from the Alberta oil sands to refineries in Oklahoma and the Gulf Coast. Because the pipeline would pass through environmentally sensitive landscapes, especially in the state of Nebraska, non-governmental organizations, climate change activists, citizens, celebrities and federal and state politicians pressured the Obama administration to halt the project. Company executives had initially seen the Keystone XL pipeline as a readily achievable, financially significant and strategically compelling venture but now wondered whether they had missed the indications and opportunities to avoid controversy. Extensive advertising campaigns and intensive lobbying in Washington did not seem to have improved the likelihood of the pipeline's construction. What could be done now to increase the likelihood of permit approval and bring the Keystone XL pipeline to fruition?
Authors :: Guy Holburn, Margaret Loudermilk, Dennis McConaghy
Swot Analysis of "TransCanada's Keystone XL Pipeline: Unfinished Business" written by Guy Holburn, Margaret Loudermilk, Dennis McConaghy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xl Keystone facing as an external strategic factors. Some of the topics covered in TransCanada's Keystone XL Pipeline: Unfinished Business case study are - Strategic Management Strategies, Government, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the TransCanada's Keystone XL Pipeline: Unfinished Business casestudy better are - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs,
increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of TransCanada's Keystone XL Pipeline: Unfinished Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TransCanada's Keystone XL Pipeline: Unfinished Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xl Keystone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xl Keystone 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 TransCanada's Keystone XL Pipeline: Unfinished Business can be done for the following purposes –
1. Strategic planning using facts provided in TransCanada's Keystone XL Pipeline: Unfinished Business case study
2. Improving business portfolio management of Xl Keystone
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 Xl Keystone
Strengths TransCanada's Keystone XL Pipeline: Unfinished Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xl Keystone in TransCanada's Keystone XL Pipeline: Unfinished Business Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Xl Keystone 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.
Superior customer experience
– The customer experience strategy of Xl Keystone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Xl Keystone 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.
Ability to recruit top talent
– Xl Keystone is one of the leading recruiters in the industry. Managers in the TransCanada's Keystone XL Pipeline: Unfinished Business 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
– TransCanada's Keystone XL Pipeline: Unfinished Business firm has clearly differentiated products in the market place. This has enabled Xl Keystone to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Xl Keystone to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Xl Keystone 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 TransCanada's Keystone XL Pipeline: Unfinished Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Xl Keystone 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 TransCanada's Keystone XL Pipeline: Unfinished Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Xl Keystone 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 Xl Keystone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Xl Keystone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xl Keystone 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.
High brand equity
– Xl Keystone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xl Keystone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Xl Keystone in the sector have low bargaining power. TransCanada's Keystone XL Pipeline: Unfinished Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xl Keystone to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Xl Keystone is one of the most innovative firm in sector. Manager in TransCanada's Keystone XL Pipeline: Unfinished Business Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses TransCanada's Keystone XL Pipeline: Unfinished Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TransCanada's Keystone XL Pipeline: Unfinished Business are -
Slow to strategic competitive environment developments
– As TransCanada's Keystone XL Pipeline: Unfinished Business HBR case study mentions - Xl Keystone 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Xl Keystone 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 cash cycle compare to competitors
Xl Keystone 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.
Products dominated business model
– Even though Xl Keystone 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 - TransCanada's Keystone XL Pipeline: Unfinished Business should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Guy Holburn, Margaret Loudermilk, Dennis McConaghy suggests that, Xl Keystone 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business, is just above the industry average. Xl Keystone 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TransCanada's Keystone XL Pipeline: Unfinished Business, in the dynamic environment Xl Keystone has struggled to respond to the nimble upstart competition. Xl Keystone has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Xl Keystone 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xl Keystone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TransCanada's Keystone XL Pipeline: Unfinished Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Xl Keystone 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. Xl Keystone 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.
High operating costs
– Compare to the competitors, firm in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business 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 Xl Keystone 's lucrative customers.
Opportunities TransCanada's Keystone XL Pipeline: Unfinished Business | 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 TransCanada's Keystone XL Pipeline: Unfinished Business are -
Buying journey improvements
– Xl Keystone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TransCanada's Keystone XL Pipeline: Unfinished Business 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. Xl Keystone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Xl Keystone 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xl Keystone 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.
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 Xl Keystone 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.
Better consumer reach
– The expansion of the 5G network will help Xl Keystone to increase its market reach. Xl Keystone 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, Xl Keystone is facing challenges because of the dominance of functional experts in the organization. TransCanada's Keystone XL Pipeline: Unfinished Business 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
– Xl Keystone 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.
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. Xl Keystone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Xl Keystone in the consumer business. Now Xl Keystone can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Xl Keystone to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Xl Keystone can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Xl Keystone 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.
Threats TransCanada's Keystone XL Pipeline: Unfinished Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xl Keystone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Xl Keystone 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.
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. Xl Keystone needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Xl Keystone 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.
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 Xl Keystone business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Xl Keystone has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Xl Keystone 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.
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 Xl Keystone.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TransCanada's Keystone XL Pipeline: Unfinished Business, Xl Keystone 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 .
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 Xl Keystone in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Xl Keystone 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xl Keystone 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.
High dependence on third party suppliers
– Xl Keystone 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.
Weighted SWOT Analysis of TransCanada's Keystone XL Pipeline: Unfinished Business 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 TransCanada's Keystone XL Pipeline: Unfinished Business 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 TransCanada's Keystone XL Pipeline: Unfinished Business 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 TransCanada's Keystone XL Pipeline: Unfinished Business 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 TransCanada's Keystone XL Pipeline: Unfinished Business 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 Xl Keystone needs to make to build a sustainable competitive advantage.
