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 - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing energy prices,
talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, 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 -
High brand equity
– Iron Ore has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Iron Ore to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Iron Ore 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. Iron Ore 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 bargaining power of channel partners
– Because of the regulatory requirements, Christoph H. Loch, Christian Terwiesch suggests that, Iron Ore is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Iron Ore can use these opportunities to build new business models that can help the communities that Iron Ore operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
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 -
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.
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.
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: Turning a First-of-Its-Kind Iron Ore Reduction Plant into a Commercial Success (B), 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 .
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.
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.
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.
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.
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.
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) .
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 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.
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.
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.
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)
