Phillips 66: Controlling a Company Through Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Phillips 66: Controlling a Company Through Crisis
The downstream operations subsidiary of a major U.S. petroleum company is faced with major restructuring decisions and responds by developing an Executive Information System (EIS) which allows for increased responsiveness, wider span of control, and higher levels of effective communication among senior managers. The case examines how the EIS was developed, what business needs it serves, how it is currently used, and how its developers are approaching managing its growth.
Swot Analysis of "Phillips 66: Controlling a Company Through Crisis" written by Lynda M. Applegate, Charles Osborn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Eis Phillips facing as an external strategic factors. Some of the topics covered in Phillips 66: Controlling a Company Through Crisis case study are - Strategic Management Strategies, Corporate governance, Crisis management, IT, Organizational structure, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the Phillips 66: Controlling a Company Through Crisis casestudy better are - – increasing commodity prices, geopolitical disruptions, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Phillips 66: Controlling a Company Through Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Phillips 66: Controlling a Company Through Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Eis Phillips, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Eis Phillips 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 Phillips 66: Controlling a Company Through Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Phillips 66: Controlling a Company Through Crisis case study
2. Improving business portfolio management of Eis Phillips
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Eis Phillips
Strengths Phillips 66: Controlling a Company Through Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Eis Phillips in Phillips 66: Controlling a Company Through Crisis Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Phillips 66: Controlling a Company Through Crisis 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.
Diverse revenue streams
– Eis Phillips is present in almost all the verticals within the industry. This has provided firm in Phillips 66: Controlling a Company Through Crisis case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Eis Phillips
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Eis Phillips does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Technology & Operations field
– Eis Phillips 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 Eis Phillips in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Eis Phillips 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 Eis Phillips is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Phillips 66: Controlling a Company Through Crisis Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Eis Phillips is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Eis Phillips 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Eis Phillips digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Eis Phillips 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.
Innovation driven organization
– Eis Phillips is one of the most innovative firm in sector. Manager in Phillips 66: Controlling a Company Through Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– Phillips 66: Controlling a Company Through Crisis firm has clearly differentiated products in the market place. This has enabled Eis Phillips to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Eis Phillips to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Eis Phillips is one of the leading recruiters in the industry. Managers in the Phillips 66: Controlling a Company Through Crisis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Eis Phillips in the sector have low bargaining power. Phillips 66: Controlling a Company Through Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Eis Phillips to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Phillips 66: Controlling a Company Through Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Phillips 66: Controlling a Company Through Crisis are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Phillips 66: Controlling a Company Through Crisis 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 Eis Phillips has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Eis Phillips is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Eis Phillips needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Eis Phillips to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Phillips 66: Controlling a Company Through Crisis, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Eis Phillips is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Phillips 66: Controlling a Company Through Crisis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Phillips 66: Controlling a Company Through Crisis, in the dynamic environment Eis Phillips has struggled to respond to the nimble upstart competition. Eis Phillips has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Eis Phillips 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 bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Charles Osborn suggests that, Eis Phillips 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.
Products dominated business model
– Even though Eis Phillips 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 - Phillips 66: Controlling a Company Through Crisis should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Eis Phillips 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.
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 Eis Phillips supply chain. Even after few cautionary changes mentioned in the HBR case study - Phillips 66: Controlling a Company Through Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Eis Phillips vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Eis Phillips 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.
Opportunities Phillips 66: Controlling a Company Through Crisis | 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 Phillips 66: Controlling a Company Through Crisis are -
Buying journey improvements
– Eis Phillips can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Phillips 66: Controlling a Company Through Crisis 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.
Learning at scale
– Online learning technologies has now opened space for Eis Phillips 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Eis Phillips can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Eis Phillips 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.
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 Eis Phillips 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.
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. Eis Phillips can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Eis Phillips can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Eis Phillips 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 Phillips 66: Controlling a Company Through Crisis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Eis Phillips to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Eis Phillips can use these opportunities to build new business models that can help the communities that Eis Phillips operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Building a culture of innovation
– managers at Eis Phillips 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 Technology & Operations segment.
Manufacturing automation
– Eis Phillips can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Eis Phillips 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. Eis Phillips 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.
Loyalty marketing
– Eis Phillips 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.
Threats Phillips 66: Controlling a Company Through Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Phillips 66: Controlling a Company Through Crisis are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Eis Phillips in the Technology & Operations industry. The Technology & Operations 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.
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. Eis Phillips will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Eis Phillips.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Phillips 66: Controlling a Company Through Crisis, Eis Phillips may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Eis Phillips with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Eis Phillips 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.
Environmental challenges
– Eis Phillips 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. Eis Phillips can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Shortening product life cycle
– it is one of the major threat that Eis Phillips is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Eis Phillips 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 Technology & Operations industry regulations.
Increasing wage structure of Eis Phillips
– 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 Eis Phillips.
High dependence on third party suppliers
– Eis Phillips 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. Eis Phillips needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Eis Phillips business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Phillips 66: Controlling a Company Through Crisis 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 Phillips 66: Controlling a Company Through Crisis 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 Phillips 66: Controlling a Company Through Crisis 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 Phillips 66: Controlling a Company Through Crisis 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 Phillips 66: Controlling a Company Through Crisis 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 Eis Phillips needs to make to build a sustainable competitive advantage.