Case Study Description of ICI-Nobel's Explosives Co. (Abridged)
Anticipates an Australian innovation (not mentioned here) that Nobel's Explosives later considers. This is an abridged version of ICI--Nobel's Explosive Co. (IMD028), which considers the Australian innovation.
Authors :: Robert S. Collins, Michael L. Gibbs, Roger W. Schmenner, Henning Von Spreckelsen
Swot Analysis of "ICI-Nobel's Explosives Co. (Abridged)" written by Robert S. Collins, Michael L. Gibbs, Roger W. Schmenner, Henning Von Spreckelsen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nobel's Explosives facing as an external strategic factors. Some of the topics covered in ICI-Nobel's Explosives Co. (Abridged) case study are - Strategic Management Strategies, Financial markets, Productivity, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the ICI-Nobel's Explosives Co. (Abridged) casestudy better are - – increasing transportation and logistics costs, wage bills are increasing, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of ICI-Nobel's Explosives Co. (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ICI-Nobel's Explosives Co. (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nobel's Explosives, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nobel's Explosives 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 ICI-Nobel's Explosives Co. (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in ICI-Nobel's Explosives Co. (Abridged) case study
2. Improving business portfolio management of Nobel's Explosives
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 Nobel's Explosives
Strengths ICI-Nobel's Explosives Co. (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nobel's Explosives in ICI-Nobel's Explosives Co. (Abridged) Harvard Business Review case study are -
Successful track record of launching new products
– Nobel's Explosives has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nobel's Explosives 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.
Low bargaining power of suppliers
– Suppliers of Nobel's Explosives in the sector have low bargaining power. ICI-Nobel's Explosives Co. (Abridged) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nobel's Explosives to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Nobel's Explosives is one of the most innovative firm in sector. Manager in ICI-Nobel's Explosives Co. (Abridged) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Nobel's Explosives in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Nobel's Explosives is present in almost all the verticals within the industry. This has provided firm in ICI-Nobel's Explosives Co. (Abridged) 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.
Analytics focus
– Nobel's Explosives 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 Robert S. Collins, Michael L. Gibbs, Roger W. Schmenner, Henning Von Spreckelsen 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.
High switching costs
– The high switching costs that Nobel's Explosives 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 recruit top talent
– Nobel's Explosives is one of the leading recruiters in the industry. Managers in the ICI-Nobel's Explosives Co. (Abridged) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Nobel's Explosives 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.
Highly skilled collaborators
– Nobel's Explosives 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 ICI-Nobel's Explosives Co. (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Nobel's Explosives 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 Nobel's Explosives is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ICI-Nobel's Explosives Co. (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Technology & Operations industry
– ICI-Nobel's Explosives Co. (Abridged) firm has clearly differentiated products in the market place. This has enabled Nobel's Explosives to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Nobel's Explosives to invest into research and development (R&D) and innovation.
Weaknesses ICI-Nobel's Explosives Co. (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ICI-Nobel's Explosives Co. (Abridged) are -
High operating costs
– Compare to the competitors, firm in the HBR case study ICI-Nobel's Explosives Co. (Abridged) 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 Nobel's Explosives 's lucrative customers.
Interest costs
– Compare to the competition, Nobel's Explosives 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ICI-Nobel's Explosives Co. (Abridged), it seems that the employees of Nobel's Explosives 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ICI-Nobel's Explosives Co. (Abridged), is just above the industry average. Nobel's Explosives 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.
Products dominated business model
– Even though Nobel's Explosives 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 - ICI-Nobel's Explosives Co. (Abridged) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Nobel's Explosives, firm in the HBR case study ICI-Nobel's Explosives Co. (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Nobel's Explosives supply chain. Even after few cautionary changes mentioned in the HBR case study - ICI-Nobel's Explosives Co. (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nobel's Explosives vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Nobel's Explosives has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nobel's Explosives even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Nobel's Explosives 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ICI-Nobel's Explosives Co. (Abridged), in the dynamic environment Nobel's Explosives has struggled to respond to the nimble upstart competition. Nobel's Explosives has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Nobel's Explosives products
– To increase the profitability and margins on the products, Nobel's Explosives needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities ICI-Nobel's Explosives Co. (Abridged) | 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 ICI-Nobel's Explosives Co. (Abridged) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nobel's Explosives 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, ICI-Nobel's Explosives Co. (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Nobel's Explosives 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nobel's Explosives to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nobel's Explosives to hire the very best people irrespective of their geographical location.
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. Nobel's Explosives can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Nobel's Explosives can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Nobel's Explosives in the consumer business. Now Nobel's Explosives 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 Nobel's Explosives 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
– Nobel's Explosives 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.
Building a culture of innovation
– managers at Nobel's Explosives 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.
Leveraging digital technologies
– Nobel's Explosives 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nobel's Explosives is facing challenges because of the dominance of functional experts in the organization. ICI-Nobel's Explosives Co. (Abridged) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nobel's Explosives in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Nobel's Explosives to increase its market reach. Nobel's Explosives 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.
Threats ICI-Nobel's Explosives Co. (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ICI-Nobel's Explosives Co. (Abridged) are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nobel's Explosives 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.
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. Nobel's Explosives needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on Nobel's Explosives 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.
Technology acceleration in Forth Industrial Revolution
– Nobel's Explosives has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Nobel's Explosives needs to keep up with the evolution of technology in the Technology & Operations 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.
High dependence on third party suppliers
– Nobel's Explosives 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.
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. Nobel's Explosives 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.
Shortening product life cycle
– it is one of the major threat that Nobel's Explosives is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nobel's Explosives with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nobel's Explosives 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 ICI-Nobel's Explosives Co. (Abridged) .
Increasing wage structure of Nobel's Explosives
– 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 Nobel's Explosives.
Regulatory challenges
– Nobel's Explosives 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.
Weighted SWOT Analysis of ICI-Nobel's Explosives Co. (Abridged) 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 ICI-Nobel's Explosives Co. (Abridged) 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 ICI-Nobel's Explosives Co. (Abridged) 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 ICI-Nobel's Explosives Co. (Abridged) 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 ICI-Nobel's Explosives Co. (Abridged) 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 Nobel's Explosives needs to make to build a sustainable competitive advantage.