Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A)
The two companies started in 1995 to develop a new breakthrough technology for converting iron ore into pure iron. The project was extremely challenging because of complexity (a three-way joint venture involving three countries) and uncertainty (new technology posing unforeseeable complications). The case describes the difficulties to make the technology work.
Swot Analysis of "Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A)" written by Christoph H. Loch, Christian Terwiesch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Iron Ore facing as an external strategic factors. Some of the topics covered in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) case study are - Strategic Management Strategies, Innovation, Managing uncertainty, Project management, Risk management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) casestudy better are - – wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Iron Ore, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Iron Ore 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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) can be done for the following purposes –
1. Strategic planning using facts provided in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) case study
2. Improving business portfolio management of Iron Ore
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 Iron Ore
Strengths Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Iron Ore in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) Harvard Business Review case study are -
Highly skilled collaborators
– Iron Ore 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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Iron Ore is one of the leading recruiters in the industry. Managers in the Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Iron Ore in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Iron Ore in the sector have low bargaining power. Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Iron Ore to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Iron Ore digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Iron Ore 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.
Operational resilience
– The operational resilience strategy in the Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) 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.
Strong track record of project management
– Iron Ore is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Technology & Operations industry
– Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) firm has clearly differentiated products in the market place. This has enabled Iron Ore to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Iron Ore to invest into research and development (R&D) and innovation.
Organizational Resilience of Iron Ore
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Iron Ore does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Iron Ore is one of the most innovative firm in sector. Manager in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Iron Ore 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 Technology & Operations field
– Iron Ore 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 Iron Ore in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) are -
High operating costs
– Compare to the competitors, firm in the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) 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 Iron Ore 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Iron Ore 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.
Increasing silos among functional specialists
– The organizational structure of Iron Ore is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Iron Ore needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Iron Ore to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Iron Ore has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Iron Ore is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Iron Ore 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.
Slow to strategic competitive environment developments
– As Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) HBR case study mentions - Iron Ore 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A), it seems that the employees of Iron Ore 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.
Lack of clear differentiation of Iron Ore products
– To increase the profitability and margins on the products, Iron Ore needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Iron Ore 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A), is just above the industry average. Iron Ore 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.
Opportunities Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Iron Ore 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, Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Iron Ore is facing challenges because of the dominance of functional experts in the organization. Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Iron Ore can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Iron Ore 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.
Loyalty marketing
– Iron Ore 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.
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. Iron Ore can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Iron Ore can develop new processes and procedures in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Iron Ore has opened avenues for new revenue streams for the organization in the industry. This can help Iron Ore to build a more holistic ecosystem as suggested in the Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) case study. Iron Ore can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Iron Ore in the consumer business. Now Iron Ore can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Iron Ore 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 Iron Ore to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Iron Ore 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.
Learning at scale
– Online learning technologies has now opened space for Iron Ore 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.
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 Iron Ore 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.
Threats Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) are -
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 Iron Ore business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Iron Ore 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. Iron Ore needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A), Iron Ore 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 .
Environmental challenges
– Iron Ore 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. Iron Ore can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Iron Ore 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Iron Ore 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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (A) .
Stagnating economy with rate increase
– Iron Ore 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.
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 Iron Ore.
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.
Shortening product life cycle
– it is one of the major threat that Iron Ore is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Iron Ore 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.
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.
Weighted SWOT Analysis of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Building a First-of-Its-Kind Iron Ore Reduction Plant (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 Iron Ore needs to make to build a sustainable competitive advantage.
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