Should the Ethanol Blender's Credit Be Eliminated? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study SWOT Analysis Solution
Case Study Description of Should the Ethanol Blender's Credit Be Eliminated?
In December 2010, one U.S. legislative action was largely overlooked in the popular press: the one-year extension of the 45-cent-per-gallon Volumetric Ethanol Excise Tax Credit (VEETC), commonly known as the "blender's credit." Both proponents and opponents of the blender's credit liked to cite data to support their positions. Proponents pointed out the number of jobs created by new ethanol plants, while opponents cited unfavorable energy balances from the use of ethanol and the overall budgetary impact of the blender's credit. What was less clear-but potentially much more important than the selective data cited by advocates and critics of ethanol-was the overall impact of the blender's credit on the U.S. economy. In particular, to what extent did the ethanol subsidy-by influencing the allocation of resources to the ethanol market-act as a drag on efficiency in the U.S. economy? This case presents a history of ethanol in the U.S. and an overview of the market for ethanol-based motor fuel, including data on demand and supply fundamentals. It also discusses the broader U.S. energy market, as well as the U.S. market for corn. The case reviews other policy interventions besides the ethanol tax credit that have an impact on the market for ethanol-based motor fuel, such as tariffs and mandates. Finally, it surveys the ways other countries around the world, such as Brazil, have supported the use of ethanol-based fuel.
Swot Analysis of "Should the Ethanol Blender's Credit Be Eliminated?" written by David Besanko, Melissa Ulan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ethanol Blender's facing as an external strategic factors. Some of the topics covered in Should the Ethanol Blender's Credit Be Eliminated? case study are - Strategic Management Strategies, Policy, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Should the Ethanol Blender's Credit Be Eliminated? casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing energy prices, increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Should the Ethanol Blender's Credit Be Eliminated?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Should the Ethanol Blender's Credit Be Eliminated? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ethanol Blender's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ethanol Blender's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Should the Ethanol Blender's Credit Be Eliminated? can be done for the following purposes –
1. Strategic planning using facts provided in Should the Ethanol Blender's Credit Be Eliminated? case study
2. Improving business portfolio management of Ethanol Blender's
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 Ethanol Blender's
Strengths Should the Ethanol Blender's Credit Be Eliminated? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ethanol Blender's in Should the Ethanol Blender's Credit Be Eliminated? Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ethanol Blender's 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.
Learning organization
- Ethanol Blender's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ethanol Blender's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Should the Ethanol Blender's Credit Be Eliminated? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Ethanol Blender's 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 Ethanol Blender's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Ethanol Blender's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ethanol Blender's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ethanol Blender's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ethanol Blender's 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.
Highly skilled collaborators
– Ethanol Blender's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Should the Ethanol Blender's Credit Be Eliminated? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Ethanol Blender's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ethanol Blender's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Ethanol Blender's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Should the Ethanol Blender's Credit Be Eliminated? 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.
Low bargaining power of suppliers
– Suppliers of Ethanol Blender's in the sector have low bargaining power. Should the Ethanol Blender's Credit Be Eliminated? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ethanol Blender's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Ethanol Blender's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Should the Ethanol Blender's Credit Be Eliminated? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Should the Ethanol Blender's Credit Be Eliminated? firm has clearly differentiated products in the market place. This has enabled Ethanol Blender's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ethanol Blender's to invest into research and development (R&D) and innovation.
Weaknesses Should the Ethanol Blender's Credit Be Eliminated? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Should the Ethanol Blender's Credit Be Eliminated? are -
High operating costs
– Compare to the competitors, firm in the HBR case study Should the Ethanol Blender's Credit Be Eliminated? 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 Ethanol Blender's 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Should the Ethanol Blender's Credit Be Eliminated?, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, David Besanko, Melissa Ulan suggests that, Ethanol Blender's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Should the Ethanol Blender's Credit Be Eliminated? HBR case study mentions - Ethanol Blender's 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.
Need for greater diversity
– Ethanol Blender's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Should the Ethanol Blender's Credit Be Eliminated?, is just above the industry average. Ethanol Blender's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Should the Ethanol Blender's Credit Be Eliminated?, it seems that the employees of Ethanol Blender's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ethanol Blender's 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 Should the Ethanol Blender's Credit Be Eliminated? 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 Ethanol Blender's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Ethanol Blender's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ethanol Blender's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Should the Ethanol Blender's Credit Be Eliminated? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Should the Ethanol Blender's Credit Be Eliminated? | 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 Should the Ethanol Blender's Credit Be Eliminated? are -
Building a culture of innovation
– managers at Ethanol Blender's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ethanol Blender's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Ethanol Blender's has opened avenues for new revenue streams for the organization in the industry. This can help Ethanol Blender's to build a more holistic ecosystem as suggested in the Should the Ethanol Blender's Credit Be Eliminated? case study. Ethanol Blender's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Ethanol Blender's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ethanol Blender's can use these opportunities to build new business models that can help the communities that Ethanol Blender's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Ethanol Blender's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Ethanol Blender's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Should the Ethanol Blender's Credit Be Eliminated? 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.
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 Ethanol Blender's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Ethanol Blender's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ethanol Blender's is facing challenges because of the dominance of functional experts in the organization. Should the Ethanol Blender's Credit Be Eliminated? 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.
Using analytics as competitive advantage
– Ethanol Blender's 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 Should the Ethanol Blender's Credit Be Eliminated? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ethanol Blender's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ethanol Blender's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Ethanol Blender's 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.
Threats Should the Ethanol Blender's Credit Be Eliminated? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Should the Ethanol Blender's Credit Be Eliminated? are -
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. Ethanol Blender's 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 Ethanol Blender's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Ethanol Blender's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ethanol Blender's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Ethanol Blender's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Ethanol Blender's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ethanol Blender's.
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 Ethanol Blender's in the Strategy & Execution sector and impact the bottomline of the organization.
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 Ethanol Blender's.
Technology acceleration in Forth Industrial Revolution
– Ethanol Blender's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ethanol Blender's 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.
Regulatory challenges
– Ethanol Blender's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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. Ethanol Blender's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Ethanol Blender's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Ethanol Blender's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Ethanol Blender's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Should the Ethanol Blender's Credit Be Eliminated? 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 Should the Ethanol Blender's Credit Be Eliminated? 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 Should the Ethanol Blender's Credit Be Eliminated? 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 Should the Ethanol Blender's Credit Be Eliminated? 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 Should the Ethanol Blender's Credit Be Eliminated? 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 Ethanol Blender's needs to make to build a sustainable competitive advantage.