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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing energy prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, 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 -
Analytics focus
– Xl Keystone 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 Guy Holburn, Margaret Loudermilk, Dennis McConaghy 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.
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.
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.
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.
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.
Diverse revenue streams
– Xl Keystone is present in almost all the verticals within the industry. This has provided firm in TransCanada's Keystone XL Pipeline: Unfinished Business 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 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.
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.
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.
Training and development
– Xl Keystone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TransCanada's Keystone XL Pipeline: Unfinished Business 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.
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.
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.
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 -
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.
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.
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.
Need for greater diversity
– Xl Keystone 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.
Lack of clear differentiation of Xl Keystone products
– To increase the profitability and margins on the products, Xl Keystone needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Aligning sales with marketing
– It come across in the case study TransCanada's Keystone XL Pipeline: Unfinished Business 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 TransCanada's Keystone XL Pipeline: Unfinished Business can leverage the sales team experience to cultivate customer relationships as Xl Keystone is planning to shift buying processes online.
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.
Low market penetration in new markets
– Outside its home market of Xl Keystone, firm in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xl Keystone can use these opportunities to build new business models that can help the communities that Xl Keystone operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xl Keystone 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 Xl Keystone to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Using analytics as competitive advantage
– Xl Keystone 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 TransCanada's Keystone XL Pipeline: Unfinished Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xl Keystone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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. Xl Keystone 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. Xl Keystone 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.
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 -
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.
Stagnating economy with rate increase
– Xl Keystone can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xl Keystone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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. Xl Keystone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xl Keystone 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 TransCanada's Keystone XL Pipeline: Unfinished Business .
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.
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.
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.
Environmental challenges
– Xl Keystone needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Xl Keystone can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.