Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B)
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B)" 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) case study are - Strategic Management Strategies, Managing uncertainty, Project management, Research & development, 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) casestudy better are - – geopolitical disruptions, there is backlash against globalization, wage bills are increasing, there is increasing trade war between United States & China, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing energy prices,
challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B)
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) can be done for the following purposes –
1. Strategic planning using facts provided in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) | 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) Harvard Business Review case study are -
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.
Effective Research and Development (R&D)
– Iron Ore 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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Iron Ore 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.
Diverse revenue streams
– Iron Ore is present in almost all the verticals within the industry. This has provided firm in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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
– Iron Ore 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 Christoph H. Loch, Christian Terwiesch 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.
Operational resilience
– The operational resilience strategy in the Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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.
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.
Successful track record of launching new products
– Iron Ore has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Iron Ore 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 Iron Ore in the sector have low bargaining power. Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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.
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.
Training and development
– Iron Ore has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Iron Ore 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 Iron Ore is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) | 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) are -
Slow to strategic competitive environment developments
– As Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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.
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 Iron Ore supply chain. Even after few cautionary changes mentioned in the HBR case study - Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Iron Ore vulnerable to further global disruptions in South East Asia.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Iron Ore 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 - Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Iron Ore 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), in the dynamic environment Iron Ore has struggled to respond to the nimble upstart competition. Iron Ore has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), 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.
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.
Opportunities Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) | 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Iron Ore 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.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Iron Ore 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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Using analytics as competitive advantage
– Iron Ore 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 Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Iron Ore to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Iron Ore to increase its market reach. Iron Ore 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.
Buying journey improvements
– Iron Ore can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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.
Threats Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) are -
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 Iron Ore in the Technology & Operations sector and impact the bottomline of the organization.
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.
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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) .
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.
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. Iron Ore 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.
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.
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.
Consumer confidence and its impact on Iron Ore 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
– Iron Ore has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Iron Ore 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Iron Ore with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing wage structure of Iron Ore
– 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 Iron Ore.
Weighted SWOT Analysis of Cleveland Cliffs Inc. and Lurgi Metallurgie GmbH - The Circored Project: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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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