The Exxon Valdez Revisited: The Untold Story (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Exxon Valdez Revisited: The Untold Story (A)
Being in charge of cleaning up the March 24, 1989 Exxon Valdez oil spill accident, meant that Otto Harrison, the general manager of Exxon International Alaskan Operations, was there when the storm clouds over the event were thick. Despite years of learning, wisdom, growth, and dealing with success and failure, Harrison had never faced a challenge of this magnitude. He was sure his experiences would be utilized in full force. The questions he thought about included whether three different governing bodies, the state of Alaska, the federal government, and Exxon, a publicly held corporation, could work together toward a common goal-to leave few signs of the biggest oil spill ever to occur in North America. What type of help was most needed now? Would Exxon's plan satisfy the numerous stakeholders? How would the plan be viewed publicly? What impact would the cleanup plan have on Exxon's business? In the (A) case, the Exxon Valdez accident and immediate challenges are described so students can put themselves in Harrison's place to lead through the crisis. The (B) case (epilogue) outlines more problems and includes actions taken to try to clean up the oil as quickly and effectively as they could. The tragedy changed the oil industry in many ways-some of which are described in the epilogue.
Swot Analysis of "The Exxon Valdez Revisited: The Untold Story (A)" written by Gerry Yemen, Erika H. James includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Exxon Valdez facing as an external strategic factors. Some of the topics covered in The Exxon Valdez Revisited: The Untold Story (A) case study are - Strategic Management Strategies, International business, Leadership, Regulation, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Exxon Valdez Revisited: The Untold Story (A) casestudy better are - – increasing transportation and logistics costs, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of The Exxon Valdez Revisited: The Untold Story (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Exxon Valdez Revisited: The Untold Story (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Exxon Valdez, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Exxon Valdez 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 The Exxon Valdez Revisited: The Untold Story (A) can be done for the following purposes –
1. Strategic planning using facts provided in The Exxon Valdez Revisited: The Untold Story (A) case study
2. Improving business portfolio management of Exxon Valdez
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 Exxon Valdez
Strengths The Exxon Valdez Revisited: The Untold Story (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Exxon Valdez in The Exxon Valdez Revisited: The Untold Story (A) Harvard Business Review case study are -
Diverse revenue streams
– Exxon Valdez is present in almost all the verticals within the industry. This has provided firm in The Exxon Valdez Revisited: The Untold Story (A) 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.
Innovation driven organization
– Exxon Valdez is one of the most innovative firm in sector. Manager in The Exxon Valdez Revisited: The Untold Story (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Exxon Valdez 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 Exxon Valdez in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Exxon Valdez 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 Gerry Yemen, Erika H. James 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.
Highly skilled collaborators
– Exxon Valdez 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 The Exxon Valdez Revisited: The Untold Story (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Exxon Valdez 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 The Exxon Valdez Revisited: The Untold Story (A) - 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 brand equity
– Exxon Valdez has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Exxon Valdez to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Exxon Valdez
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Exxon Valdez does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Exxon Valdez has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Exxon Valdez Revisited: The Untold Story (A) 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.
High switching costs
– The high switching costs that Exxon Valdez 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.
Ability to lead change in Strategy & Execution field
– Exxon Valdez is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Exxon Valdez in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses The Exxon Valdez Revisited: The Untold Story (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Exxon Valdez Revisited: The Untold Story (A) are -
High cash cycle compare to competitors
Exxon Valdez 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.
Lack of clear differentiation of Exxon Valdez products
– To increase the profitability and margins on the products, Exxon Valdez needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Exxon Valdez supply chain. Even after few cautionary changes mentioned in the HBR case study - The Exxon Valdez Revisited: The Untold Story (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Exxon Valdez vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Exxon Valdez has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Exxon Valdez has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Exxon Valdez Revisited: The Untold Story (A) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As The Exxon Valdez Revisited: The Untold Story (A) HBR case study mentions - Exxon Valdez 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.
Aligning sales with marketing
– It come across in the case study The Exxon Valdez Revisited: The Untold Story (A) 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 The Exxon Valdez Revisited: The Untold Story (A) can leverage the sales team experience to cultivate customer relationships as Exxon Valdez is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Exxon Valdez 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Exxon Valdez Revisited: The Untold Story (A), is just above the industry average. Exxon Valdez 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gerry Yemen, Erika H. James suggests that, Exxon Valdez 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.
Capital Spending Reduction
– Even during the low interest decade, Exxon Valdez 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.
Opportunities The Exxon Valdez Revisited: The Untold Story (A) | 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 The Exxon Valdez Revisited: The Untold Story (A) are -
Using analytics as competitive advantage
– Exxon Valdez 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 The Exxon Valdez Revisited: The Untold Story (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Exxon Valdez to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Exxon Valdez 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Exxon Valdez can use these opportunities to build new business models that can help the communities that Exxon Valdez operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Exxon Valdez 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.
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. Exxon Valdez 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. Exxon Valdez 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.
Developing new processes and practices
– Exxon Valdez 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.
Manufacturing automation
– Exxon Valdez 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.
Leveraging digital technologies
– Exxon Valdez 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Exxon Valdez in the consumer business. Now Exxon Valdez can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Exxon Valdez can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Exxon Valdez to increase its market reach. Exxon Valdez 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Exxon Valdez 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, The Exxon Valdez Revisited: The Untold Story (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Exxon Valdez can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The Exxon Valdez Revisited: The Untold Story (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Exxon Valdez Revisited: The Untold Story (A) 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. Exxon Valdez 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
– Exxon Valdez 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Exxon Valdez 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.
Environmental challenges
– Exxon Valdez 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. Exxon Valdez can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Exxon Valdez is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Exxon Valdez.
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 Exxon Valdez business can come under increasing regulations regarding data privacy, data security, etc.
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. Exxon Valdez 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.
Regulatory challenges
– Exxon Valdez 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.
Increasing wage structure of Exxon Valdez
– 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 Exxon Valdez.
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 Exxon Valdez in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of The Exxon Valdez Revisited: The Untold Story (A) 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 The Exxon Valdez Revisited: The Untold Story (A) 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 The Exxon Valdez Revisited: The Untold Story (A) 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 The Exxon Valdez Revisited: The Untold Story (A) 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 The Exxon Valdez Revisited: The Untold Story (A) 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 Exxon Valdez needs to make to build a sustainable competitive advantage.
