First of a two-part case on the development and use of a Balanced Scorecard (BSC) at Mobil's US Marketing and Refining Division. Split from the original (A) case to give students an opportunity to suggest objectives and measures for the division's initial BSC, without seeing the actual choices made by Mobil's managers. Describes how the CEO of the marketing and refining division of a major oil company is in the midst of implementing a profit turnaround. He has transformed a strongly centralized, functionally-organized division into 17 independent business units and 14 internal service companies. The division has also launched a new, market-segmented strategy aimed at high-end buyers. The CEO recognizes, however, that the new organization and strategy require a new measurement system. He turns to the BSC because of its ability to link measurement to strategy, and to help the new profit-center managers develop customized strategies for their local responsibilities. This case describes the development process of the initial divisional BSC, and the formulation of objectives and measures for the financial and learning and growth perspectives.
Swot Analysis of "Mobil USM&R (A1)" written by Robert S. Kaplan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bsc Mobil's facing as an external strategic factors. Some of the topics covered in Mobil USM&R (A1) case study are - Strategic Management Strategies, Balanced scorecard, Boards, Growth strategy, Leading teams, Marketing, Motivating people, Reorganization, Strategy execution and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Mobil USM&R (A1) casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mobil USM&R (A1) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bsc Mobil's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bsc Mobil's 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 Mobil USM&R (A1) can be done for the following purposes –
1. Strategic planning using facts provided in Mobil USM&R (A1) case study
2. Improving business portfolio management of Bsc Mobil's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bsc Mobil's
Strengths Mobil USM&R (A1) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bsc Mobil's in Mobil USM&R (A1) Harvard Business Review case study are -
Organizational Resilience of Bsc Mobil's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bsc Mobil's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Bsc Mobil's 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 Robert S. Kaplan 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.
High switching costs
– The high switching costs that Bsc Mobil's 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 lead change in Finance & Accounting field
– Bsc Mobil's 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 Bsc Mobil's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Bsc Mobil's 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 Mobil USM&R (A1) 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 Bsc Mobil's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Bsc Mobil's 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 Bsc Mobil's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mobil USM&R (A1) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Bsc Mobil's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bsc Mobil's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Bsc Mobil's in the sector have low bargaining power. Mobil USM&R (A1) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bsc Mobil's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Bsc Mobil's 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 Mobil USM&R (A1) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Bsc Mobil's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mobil USM&R (A1) 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.
High brand equity
– Bsc Mobil's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bsc Mobil's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Mobil USM&R (A1) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mobil USM&R (A1) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mobil USM&R (A1), is just above the industry average. Bsc Mobil's 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.
Interest costs
– Compare to the competition, Bsc Mobil's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bsc Mobil's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mobil USM&R (A1) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Mobil USM&R (A1) 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 Bsc Mobil's 's lucrative customers.
Need for greater diversity
– Bsc Mobil's 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.
Low market penetration in new markets
– Outside its home market of Bsc Mobil's, firm in the HBR case study Mobil USM&R (A1) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Bsc Mobil's is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Bsc Mobil's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bsc Mobil's to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bsc Mobil's supply chain. Even after few cautionary changes mentioned in the HBR case study - Mobil USM&R (A1), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bsc Mobil's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert S. Kaplan suggests that, Bsc Mobil's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mobil USM&R (A1), in the dynamic environment Bsc Mobil's has struggled to respond to the nimble upstart competition. Bsc Mobil's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Bsc Mobil's 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. Bsc Mobil's 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.
Opportunities Mobil USM&R (A1) | 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 Mobil USM&R (A1) are -
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 Bsc Mobil's 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.
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 Bsc Mobil's in the consumer business. Now Bsc Mobil's 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 Bsc Mobil's 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.
Better consumer reach
– The expansion of the 5G network will help Bsc Mobil's to increase its market reach. Bsc Mobil's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bsc Mobil's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Bsc Mobil's can develop new processes and procedures in Finance & Accounting 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.
Loyalty marketing
– Bsc Mobil's 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.
Buying journey improvements
– Bsc Mobil's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mobil USM&R (A1) 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.
Building a culture of innovation
– managers at Bsc Mobil's 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 Finance & Accounting segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Bsc Mobil's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Bsc Mobil's can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bsc Mobil's can use these opportunities to build new business models that can help the communities that Bsc Mobil's operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bsc Mobil's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Mobil USM&R (A1), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Mobil USM&R (A1) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mobil USM&R (A1) are -
High dependence on third party suppliers
– Bsc Mobil's 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.
Consumer confidence and its impact on Bsc Mobil's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bsc Mobil's in the Finance & Accounting industry. The Finance & Accounting 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.
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
– Bsc Mobil's 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.
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. Bsc Mobil's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bsc Mobil's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Bsc Mobil's in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– Bsc Mobil's 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 Finance & Accounting industry regulations.
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 Bsc Mobil's business can come under increasing regulations regarding data privacy, data security, etc.
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.
Environmental challenges
– Bsc Mobil's 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. Bsc Mobil's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Bsc Mobil's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bsc Mobil's.
Weighted SWOT Analysis of Mobil USM&R (A1) 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 Mobil USM&R (A1) 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 Mobil USM&R (A1) 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 Mobil USM&R (A1) 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 Mobil USM&R (A1) 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 Bsc Mobil's needs to make to build a sustainable competitive advantage.
