Swot Analysis of "Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B)" written by Peter Hecht, Onche Ugbabe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Agip Nigeria facing as an external strategic factors. Some of the topics covered in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) case study are - Strategic Management Strategies, Entrepreneurial finance, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) casestudy better are - – wage bills are increasing, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, geopolitical disruptions, etc
Introduction to SWOT Analysis of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agip Nigeria, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agip Nigeria 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) can be done for the following purposes –
1. Strategic planning using facts provided in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) case study
2. Improving business portfolio management of Agip Nigeria
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 Agip Nigeria
Strengths Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agip Nigeria in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) Harvard Business Review case study are -
Strong track record of project management
– Agip Nigeria is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Agip Nigeria in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Agip Nigeria is one of the most innovative firm in sector. Manager in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Agip Nigeria is one of the leading recruiters in the industry. Managers in the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Finance & Accounting industry
– Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) firm has clearly differentiated products in the market place. This has enabled Agip Nigeria to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Agip Nigeria to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Agip Nigeria 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.
Analytics focus
– Agip Nigeria 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 Peter Hecht, Onche Ugbabe 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.
Highly skilled collaborators
– Agip Nigeria 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Agip Nigeria 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.
Ability to lead change in Finance & Accounting field
– Agip Nigeria 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 Agip Nigeria in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Agip Nigeria is present in almost all the verticals within the industry. This has provided firm in Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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.
Organizational Resilience of Agip Nigeria
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Agip Nigeria does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Agip Nigeria 's lucrative customers.
High cash cycle compare to competitors
Agip Nigeria 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 Agip Nigeria 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 - Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Agip Nigeria has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) HBR case study mentions - Agip Nigeria 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.
Increasing silos among functional specialists
– The organizational structure of Agip Nigeria is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Agip Nigeria needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Agip Nigeria to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B), is just above the industry average. Agip Nigeria 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B), in the dynamic environment Agip Nigeria has struggled to respond to the nimble upstart competition. Agip Nigeria 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 Agip Nigeria 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.
Aligning sales with marketing
– It come across in the case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) can leverage the sales team experience to cultivate customer relationships as Agip Nigeria is planning to shift buying processes online.
Opportunities Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) | 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) are -
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. Agip Nigeria 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, Agip Nigeria can use these opportunities to build new business models that can help the communities that Agip Nigeria operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Agip Nigeria 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.
Better consumer reach
– The expansion of the 5G network will help Agip Nigeria to increase its market reach. Agip Nigeria 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.
Learning at scale
– Online learning technologies has now opened space for Agip Nigeria 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Agip Nigeria 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.
Loyalty marketing
– Agip Nigeria 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.
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 Agip Nigeria 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Agip Nigeria can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Agip Nigeria 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.
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. Agip Nigeria can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Agip Nigeria 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, Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Agip Nigeria 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agip Nigeria to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) are -
Technology acceleration in Forth Industrial Revolution
– Agip Nigeria has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Agip Nigeria needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
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 Agip Nigeria in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Agip Nigeria 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. Agip Nigeria can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Agip Nigeria is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Agip Nigeria.
High dependence on third party suppliers
– Agip Nigeria 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Agip Nigeria 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. Agip Nigeria 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.
Consumer confidence and its impact on Agip Nigeria 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B), Agip Nigeria may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Agip Nigeria 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.
Increasing wage structure of Agip Nigeria
– 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 Agip Nigeria.
Weighted SWOT Analysis of Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Ocean & Oil Holdings and the Leveraged Buyout of Agip Nigeria (B) 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 Agip Nigeria needs to make to build a sustainable competitive advantage.
