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 - – talent flight as more people leaving formal jobs, technology disruption, central banks are concerned over increasing inflation, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Superior customer experience
– The customer experience strategy of Xl Keystone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the TransCanada's Keystone XL Pipeline: Unfinished Business Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
Learning organization
- Xl Keystone 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 Xl Keystone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TransCanada's Keystone XL Pipeline: Unfinished Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
Strong track record of project management
– Xl Keystone is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Strategy & Execution industry
– TransCanada's Keystone XL Pipeline: Unfinished Business firm has clearly differentiated products in the market place. This has enabled Xl Keystone to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Xl Keystone to invest into research and development (R&D) and innovation.
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.
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.
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 -
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.
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 Xl Keystone supply chain. Even after few cautionary changes mentioned in the HBR case study - TransCanada's Keystone XL Pipeline: Unfinished Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xl Keystone vulnerable to further global disruptions in South East Asia.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xl Keystone 's lucrative customers.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business, it seems that the employees of Xl Keystone 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study TransCanada's Keystone XL Pipeline: Unfinished Business, in the dynamic environment Xl Keystone has struggled to respond to the nimble upstart competition. Xl Keystone has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Xl Keystone 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TransCanada's Keystone XL Pipeline: Unfinished Business 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 Xl Keystone has relatively successful track record of launching new products.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xl Keystone 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, TransCanada's Keystone XL Pipeline: Unfinished Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xl Keystone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xl Keystone in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xl Keystone in the consumer business. Now Xl Keystone can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xl Keystone 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.
Developing new processes and practices
– Xl Keystone can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Creating value in data economy
– The success of analytics program of Xl Keystone has opened avenues for new revenue streams for the organization in the industry. This can help Xl Keystone to build a more holistic ecosystem as suggested in the TransCanada's Keystone XL Pipeline: Unfinished Business case study. Xl Keystone can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Xl Keystone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Loyalty marketing
– Xl Keystone 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.
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 -
Increasing wage structure of Xl Keystone
– 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 Xl Keystone.
Technology acceleration in Forth Industrial Revolution
– Xl Keystone has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Xl Keystone needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Xl Keystone business can come under increasing regulations regarding data privacy, data security, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TransCanada's Keystone XL Pipeline: Unfinished Business, Xl Keystone may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Xl Keystone needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Xl Keystone demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
