Turkey and the Southern Corridor SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Turkey and the Southern Corridor
In December 2014, Russia cancelled the South Stream pipeline that was envisaged to deliver natural gas through the Black Sea basin on to Europe and replaced it with a new pipeline through Turkey. The Turkish Stream was a great opportunity for Turkey to turn itself into an energy hub of its region. It had already secured TANAP, a natural gas pipeline to carry Azerbaijani gas to Europe through Turkey. The country's geographical position was one of its crucial assets: to its east lay 70% of the world's natural gas reserves, including Russia, Azerbaijan, Turkmenistan, Iran, Iraq, and the eastern Mediterranean basin. To its west was Europe, one of the biggest energy consumers of the world. If the Turkish Stream and TANAP pipeline projects were to go through and connect to other possible energy reserves within the wider region, would it be likely that Turkey would eventually become one of Europe's main energy corridors-perhaps even a hub? Was it less risky to remain as a transit country and secure its own energy needs at potentially lower prices? What would be the consequences of being even more dependent on Russian gas through the Turkish Stream? Would Turkey be able to prioritize economic gains and take advantage of the available resources in its south?
Swot Analysis of "Turkey and the Southern Corridor" written by Rawi Abdelal, Esel Cekin, Cigdem Celik includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Turkey Gas facing as an external strategic factors. Some of the topics covered in Turkey and the Southern Corridor case study are - Strategic Management Strategies, International business, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Turkey and the Southern Corridor casestudy better are - – increasing transportation and logistics costs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , technology disruption,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Turkey and the Southern Corridor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Turkey and the Southern Corridor case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Turkey Gas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Turkey Gas 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 Turkey and the Southern Corridor can be done for the following purposes –
1. Strategic planning using facts provided in Turkey and the Southern Corridor case study
2. Improving business portfolio management of Turkey Gas
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 Turkey Gas
Strengths Turkey and the Southern Corridor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Turkey Gas in Turkey and the Southern Corridor Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Turkey Gas 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.
High switching costs
– The high switching costs that Turkey Gas 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Turkey and the Southern Corridor firm has clearly differentiated products in the market place. This has enabled Turkey Gas to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Turkey Gas to invest into research and development (R&D) and innovation.
Strong track record of project management
– Turkey Gas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Turkey Gas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Turkey Gas 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
– Turkey Gas is present in almost all the verticals within the industry. This has provided firm in Turkey and the Southern Corridor 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.
Operational resilience
– The operational resilience strategy in the Turkey and the Southern Corridor 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.
Organizational Resilience of Turkey Gas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Turkey Gas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Turkey Gas in the sector have low bargaining power. Turkey and the Southern Corridor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Turkey Gas to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Turkey Gas 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 Turkey and the Southern Corridor HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Turkey Gas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Turkey Gas 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.
High brand equity
– Turkey Gas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Turkey Gas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Turkey and the Southern Corridor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Turkey and the Southern Corridor are -
Capital Spending Reduction
– Even during the low interest decade, Turkey Gas 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 Turkey and the Southern Corridor, in the dynamic environment Turkey Gas has struggled to respond to the nimble upstart competition. Turkey Gas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Turkey and the Southern Corridor 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 Turkey Gas 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Turkey Gas 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Turkey and the Southern Corridor 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 Turkey Gas has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Turkey and the Southern Corridor HBR case study mentions - Turkey Gas 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.
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 Turkey Gas supply chain. Even after few cautionary changes mentioned in the HBR case study - Turkey and the Southern Corridor, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Turkey Gas vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Turkey and the Southern Corridor 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 Turkey and the Southern Corridor can leverage the sales team experience to cultivate customer relationships as Turkey Gas is planning to shift buying processes online.
Lack of clear differentiation of Turkey Gas products
– To increase the profitability and margins on the products, Turkey Gas needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Turkey Gas, firm in the HBR case study Turkey and the Southern Corridor needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Turkey Gas 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.
Opportunities Turkey and the Southern Corridor | 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 Turkey and the Southern Corridor are -
Developing new processes and practices
– Turkey Gas 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Turkey Gas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Turkey Gas 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.
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. Turkey Gas 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, Turkey Gas 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, Turkey and the Southern Corridor, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Turkey Gas has opened avenues for new revenue streams for the organization in the industry. This can help Turkey Gas to build a more holistic ecosystem as suggested in the Turkey and the Southern Corridor case study. Turkey Gas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Turkey Gas 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. Turkey Gas 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.
Leveraging digital technologies
– Turkey Gas 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.
Loyalty marketing
– Turkey Gas 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Turkey Gas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Turkey Gas 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 Turkey Gas 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Turkey Gas 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 Turkey Gas to hire the very best people irrespective of their geographical location.
Threats Turkey and the Southern Corridor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Turkey and the Southern Corridor are -
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.
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.
Shortening product life cycle
– it is one of the major threat that Turkey Gas is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Turkey Gas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Turkey Gas 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Turkey Gas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Turkey Gas
– 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 Turkey Gas.
Stagnating economy with rate increase
– Turkey Gas 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Turkey and the Southern Corridor, Turkey Gas 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 .
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 Turkey Gas in the Strategy & Execution sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Turkey Gas 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.
Regulatory challenges
– Turkey Gas needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
High dependence on third party suppliers
– Turkey Gas 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.
Weighted SWOT Analysis of Turkey and the Southern Corridor 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 Turkey and the Southern Corridor 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 Turkey and the Southern Corridor 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 Turkey and the Southern Corridor 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 Turkey and the Southern Corridor 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 Turkey Gas needs to make to build a sustainable competitive advantage.
