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 - – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, technology disruption, 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 -
Highly skilled collaborators
– Xl Keystone has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in TransCanada's Keystone XL Pipeline: Unfinished Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Xl Keystone digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xl Keystone has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Diverse revenue streams
– Xl Keystone is present in almost all the verticals within the industry. This has provided firm in TransCanada's Keystone XL Pipeline: Unfinished Business case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Xl Keystone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Xl Keystone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Analytics focus
– Xl Keystone is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Guy Holburn, Margaret Loudermilk, Dennis McConaghy can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Xl Keystone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xl Keystone 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.
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.
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.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xl Keystone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TransCanada's Keystone XL Pipeline: Unfinished Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Xl Keystone 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.
Low market penetration in new markets
– Outside its home market of Xl Keystone, firm in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business, is just above the industry average. Xl Keystone needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Xl Keystone has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Xl Keystone even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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.
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.
Lack of clear differentiation of Xl Keystone products
– To increase the profitability and margins on the products, Xl Keystone needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Guy Holburn, Margaret Loudermilk, Dennis McConaghy suggests that, Xl Keystone 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.
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 -
Better consumer reach
– The expansion of the 5G network will help Xl Keystone to increase its market reach. Xl Keystone 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.
Buying journey improvements
– Xl Keystone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TransCanada's Keystone XL Pipeline: Unfinished Business suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xl Keystone is facing challenges because of the dominance of functional experts in the organization. TransCanada's Keystone XL Pipeline: Unfinished Business case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
Manufacturing automation
– Xl Keystone can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Xl Keystone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Xl Keystone to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Xl Keystone can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xl Keystone can use these opportunities to build new business models that can help the communities that Xl Keystone operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
Using analytics as competitive advantage
– Xl Keystone has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study TransCanada's Keystone XL Pipeline: Unfinished Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xl Keystone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xl Keystone can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study TransCanada's Keystone XL Pipeline: Unfinished Business .
Consumer confidence and its impact on Xl Keystone demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High 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.
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.
Shortening product life cycle
– it is one of the major threat that Xl Keystone is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 .
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Xl Keystone will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 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.
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.