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
Technology & Operations
Strategy / MBA Resources
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 - – central banks are concerned over increasing inflation, geopolitical disruptions, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
increasing commodity prices, increasing household debt because of falling income levels, 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.
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.
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.
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.
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.
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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
Sustainable margins compare to other players in Technology & Operations industry
– 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) 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.
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.
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: 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 -
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 dependence on star products
– The top 2 products and services of the firm as mentioned 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) 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 Iron Ore has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Iron Ore 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.
Compensation and incentives
– The revenue per employee as 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), 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.
Aligning sales with marketing
– It come across 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) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case 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 leverage the sales team experience to cultivate customer relationships as Iron Ore is planning to shift buying processes online.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Iron Ore, 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) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, 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) 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.
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.
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 -
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.
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.
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.
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.
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. Iron Ore 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. Iron Ore 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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) case study. Iron Ore can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) 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 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.
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.
Manufacturing automation
– Iron Ore 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.
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.
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.
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.
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 -
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.
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 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.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Iron Ore can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– 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.
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.
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.
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) .
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.
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.
Feel free to connect with us if you need business research.
You can download Excel Template of Case Study Solution & 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)