Tenaris: Creating a Global Leader from an Emerging Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tenaris: Creating a Global Leader from an Emerging Market
In December 2003, Paolo Rocca, chairman and CEO of Tenaris S.A., could look back on a momentous first year for the company. Much had been accomplished since the formation of this leading global supplier of seamless steel pipe and related services in December 2002 via an exchange of the shares and American Depository Receipts of three separately listed pipe companies--Siderca in Argentina, Tamsa in Mexico, and Dalmine in Italy--for shares in the new company. The new company had eight manufacturing facilities variously located in South and North America, Europe, and Asia and distribution and sales centers present in over 20 countries. It enjoyed annual sales of $3.1 billion to the oil and gas, energy, and mechanical industries, a market-leading 19% share globally in seamless OCTG pipes (sold to the oil and gas industry), with particularly strong market shares in a number of national OCTG markets where it had local manufacturing. Despite these accomplishments, Tenaris faced challenges ahead as it sought to transform itself strategically and organizationally. Faced with a mature seamless steel pipe market, Rocca looked to further geographic expansion and a move into service provision to maintain growth and consolidate its market position. Both of these would require new skills and new ways of managing, especially on the human resources side. Building on the legal unification to transform Tenaris' 14,500 employees from eight heritage companies into one centrally aligned, unified operation was also proving to be a major managerial challenge as the company sought to realize the potential advantages of a sophisticated new organizational design. Further, the new organization needed to generate significant cost savings from the consolidation. What should Rocca expect from himself and his managers in the face of these changes? How would they need to manage differently in a unified global organization?
Swot Analysis of "Tenaris: Creating a Global Leader from an Emerging Market" written by John Roberts, Charlie Catalano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tenaris Rocca facing as an external strategic factors. Some of the topics covered in Tenaris: Creating a Global Leader from an Emerging Market case study are - Strategic Management Strategies, Cross-cultural management, Globalization, Growth strategy, Organizational structure, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tenaris: Creating a Global Leader from an Emerging Market casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Tenaris: Creating a Global Leader from an Emerging Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tenaris: Creating a Global Leader from an Emerging Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tenaris Rocca, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market can be done for the following purposes –
1. Strategic planning using facts provided in Tenaris: Creating a Global Leader from an Emerging Market case study
2. Improving business portfolio management of Tenaris Rocca
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 Tenaris Rocca
Strengths Tenaris: Creating a Global Leader from an Emerging Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tenaris Rocca in Tenaris: Creating a Global Leader from an Emerging Market Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Tenaris: Creating a Global Leader from an Emerging Market firm has clearly differentiated products in the market place. This has enabled Tenaris Rocca to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tenaris Rocca to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tenaris Rocca in the sector have low bargaining power. Tenaris: Creating a Global Leader from an Emerging Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tenaris Rocca to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Tenaris Rocca is one of the leading recruiters in the industry. Managers in the Tenaris: Creating a Global Leader from an Emerging Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Tenaris Rocca 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 Tenaris Rocca digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tenaris Rocca 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.
Training and development
– Tenaris Rocca has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tenaris: Creating a Global Leader from an Emerging Market 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
- Tenaris Rocca 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 Tenaris Rocca is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tenaris: Creating a Global Leader from an Emerging Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Tenaris Rocca is present in almost all the verticals within the industry. This has provided firm in Tenaris: Creating a Global Leader from an Emerging Market 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.
Cross disciplinary teams
– Horizontal connected teams at the Tenaris Rocca 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.
Analytics focus
– Tenaris Rocca 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 John Roberts, Charlie Catalano 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.
Effective Research and Development (R&D)
– Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Tenaris Rocca 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.
Weaknesses Tenaris: Creating a Global Leader from an Emerging Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tenaris: Creating a Global Leader from an Emerging Market are -
Capital Spending Reduction
– Even during the low interest decade, Tenaris Rocca 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.
Aligning sales with marketing
– It come across in the case study Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market can leverage the sales team experience to cultivate customer relationships as Tenaris Rocca is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Tenaris: Creating a Global Leader from an Emerging Market, in the dynamic environment Tenaris Rocca has struggled to respond to the nimble upstart competition. Tenaris Rocca has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Tenaris Rocca 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris Rocca 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Tenaris Rocca, firm in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris Rocca has relatively successful track record of launching new products.
Lack of clear differentiation of Tenaris Rocca products
– To increase the profitability and margins on the products, Tenaris Rocca needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tenaris Rocca is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tenaris: Creating a Global Leader from an Emerging Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market, it seems that the employees of Tenaris Rocca 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, Tenaris Rocca 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.
Opportunities Tenaris: Creating a Global Leader from an Emerging Market | 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 Tenaris: Creating a Global Leader from an Emerging Market are -
Better consumer reach
– The expansion of the 5G network will help Tenaris Rocca to increase its market reach. Tenaris Rocca 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.
Creating value in data economy
– The success of analytics program of Tenaris Rocca has opened avenues for new revenue streams for the organization in the industry. This can help Tenaris Rocca to build a more holistic ecosystem as suggested in the Tenaris: Creating a Global Leader from an Emerging Market case study. Tenaris Rocca can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tenaris Rocca 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
– Tenaris Rocca 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.
Buying journey improvements
– Tenaris Rocca can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tenaris: Creating a Global Leader from an Emerging Market 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.
Developing new processes and practices
– Tenaris Rocca 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.
Loyalty marketing
– Tenaris Rocca 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tenaris Rocca can use these opportunities to build new business models that can help the communities that Tenaris Rocca operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tenaris Rocca to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Tenaris Rocca can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tenaris Rocca is facing challenges because of the dominance of functional experts in the organization. Tenaris: Creating a Global Leader from an Emerging Market 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.
Learning at scale
– Online learning technologies has now opened space for Tenaris Rocca to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tenaris Rocca 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.
Threats Tenaris: Creating a Global Leader from an Emerging Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tenaris: Creating a Global Leader from an Emerging Market are -
Regulatory challenges
– Tenaris Rocca 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.
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.
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.
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 Tenaris Rocca in the Strategy & Execution sector and impact the bottomline of the organization.
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. Tenaris Rocca 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 Tenaris Rocca 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.
Stagnating economy with rate increase
– Tenaris Rocca 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.
High dependence on third party suppliers
– Tenaris Rocca 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.
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. Tenaris Rocca needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tenaris Rocca with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Tenaris Rocca 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. Tenaris Rocca can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Tenaris Rocca can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tenaris Rocca 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 Tenaris: Creating a Global Leader from an Emerging Market .
Weighted SWOT Analysis of Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris: Creating a Global Leader from an Emerging Market 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 Tenaris Rocca needs to make to build a sustainable competitive advantage.