Case Study Description of Opec Plastics: Growing with Vietnam
At the end of 2013, the leadership of Opec Plastics was pleased with their young company's growth to nearly $200 million in revenues. They had goals to double that in two more years, but were uncertain on how to accomplish this. They had technical expertise in manufacturing plastic bags and related products and trading the raw materials (resins) from which the products were made. Yet, they regarded their core competencies in a more general way: strong relations with people who mattered, in the supply chain, in the regulatory environment, and in financing. The growth options included: a?? Expansion within existing business lines through scale increases. a?? Scope expansion to products and services near to their existing activities. a?? More distant scope expansion to products and services that were not near to their existing activities but still presented opportunities. a?? Expansion along the vertical value chain. Layered on these issues was the external environment. The prospects for Southeast Asian trade agreements and the Trans Pacific Partnership created new opportunities along the value chain. However, the vagaries of oil prices (the basis for plastics prices), threatened additional uncertainties.
Swot Analysis of "Opec Plastics: Growing with Vietnam" written by Jack Suyderhoud, Tram T.H. Nguyen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A Plastics facing as an external strategic factors. Some of the topics covered in Opec Plastics: Growing with Vietnam case study are - Strategic Management Strategies, Emerging markets, Growth strategy, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Opec Plastics: Growing with Vietnam casestudy better are - – technology disruption, there is backlash against globalization, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Opec Plastics: Growing with Vietnam
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Opec Plastics: Growing with Vietnam case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A Plastics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A Plastics 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 Opec Plastics: Growing with Vietnam can be done for the following purposes –
1. Strategic planning using facts provided in Opec Plastics: Growing with Vietnam case study
2. Improving business portfolio management of A Plastics
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 A Plastics
Strengths Opec Plastics: Growing with Vietnam | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A Plastics in Opec Plastics: Growing with Vietnam Harvard Business Review case study are -
Innovation driven organization
– A Plastics is one of the most innovative firm in sector. Manager in Opec Plastics: Growing with Vietnam 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
– A Plastics 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 Opec Plastics: Growing with Vietnam HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of A Plastics in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– A Plastics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled A Plastics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of A Plastics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A Plastics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– A Plastics 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 A Plastics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– A Plastics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– A Plastics is present in almost all the verticals within the industry. This has provided firm in Opec Plastics: Growing with Vietnam 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.
Low bargaining power of suppliers
– Suppliers of A Plastics in the sector have low bargaining power. Opec Plastics: Growing with Vietnam has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A Plastics to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– A Plastics is one of the leading recruiters in the industry. Managers in the Opec Plastics: Growing with Vietnam are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- A Plastics 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 A Plastics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Opec Plastics: Growing with Vietnam Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– A Plastics 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 Opec Plastics: Growing with Vietnam - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Opec Plastics: Growing with Vietnam | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Opec Plastics: Growing with Vietnam are -
Aligning sales with marketing
– It come across in the case study Opec Plastics: Growing with Vietnam 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 Opec Plastics: Growing with Vietnam can leverage the sales team experience to cultivate customer relationships as A Plastics is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, A Plastics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Opec Plastics: Growing with Vietnam can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– A Plastics 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jack Suyderhoud, Tram T.H. Nguyen suggests that, A Plastics 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Opec Plastics: Growing with Vietnam HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though A Plastics has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Opec Plastics: Growing with Vietnam HBR case study mentions - A Plastics 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.
Skills based hiring
– The stress on hiring functional specialists at A Plastics 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.
Capital Spending Reduction
– Even during the low interest decade, A Plastics 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.
Workers concerns about automation
– As automation is fast increasing in the segment, A Plastics 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.
Lack of clear differentiation of A Plastics products
– To increase the profitability and margins on the products, A Plastics needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Opec Plastics: Growing with Vietnam, it seems that the employees of A Plastics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Opec Plastics: Growing with Vietnam | 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 Opec Plastics: Growing with Vietnam are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects A Plastics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, A Plastics is facing challenges because of the dominance of functional experts in the organization. Opec Plastics: Growing with Vietnam 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.
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 A Plastics 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.
Learning at scale
– Online learning technologies has now opened space for A Plastics 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.
Using analytics as competitive advantage
– A Plastics 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 Opec Plastics: Growing with Vietnam - to build a competitive advantage using analytics. The analytics driven competitive advantage can help A Plastics 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. A Plastics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A Plastics can use these opportunities to build new business models that can help the communities that A Plastics operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 A Plastics in the consumer business. Now A Plastics can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for A Plastics 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, A Plastics 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.
Creating value in data economy
– The success of analytics program of A Plastics has opened avenues for new revenue streams for the organization in the industry. This can help A Plastics to build a more holistic ecosystem as suggested in the Opec Plastics: Growing with Vietnam case study. A Plastics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for A Plastics 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 A Plastics to hire the very best people irrespective of their geographical location.
Buying journey improvements
– A Plastics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Opec Plastics: Growing with Vietnam 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.
Threats Opec Plastics: Growing with Vietnam External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Opec Plastics: Growing with Vietnam are -
High dependence on third party suppliers
– A Plastics 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, A Plastics 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 Opec Plastics: Growing with Vietnam .
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.
Technology acceleration in Forth Industrial Revolution
– A Plastics has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, A Plastics 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.
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 A Plastics business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– A Plastics 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.
Consumer confidence and its impact on A Plastics 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.
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 A Plastics 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 Opec Plastics: Growing with Vietnam, A Plastics 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for A Plastics 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.
Stagnating economy with rate increase
– A Plastics 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.
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. A Plastics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. A Plastics 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.
Weighted SWOT Analysis of Opec Plastics: Growing with Vietnam 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 Opec Plastics: Growing with Vietnam 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 Opec Plastics: Growing with Vietnam 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 Opec Plastics: Growing with Vietnam 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 Opec Plastics: Growing with Vietnam 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 A Plastics needs to make to build a sustainable competitive advantage.