The Pipeline Company: Financing for China's MNGPP SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Pipeline Company: Financing for China's MNGPP
In 2008, the Multinational Natural Gas Pipeline Project was sponsored by China National Group Corporation to undertake a major international infrastructure project in Asia. The Pipeline Company, a wholly owned subsidiary of China National Group Corporation, established joint ventures with the host countries and took the lead in financing the project, which was required to be completed by the end of 2009. Initial investments and procurements were made, and payment would soon be due. However, there was a large gap between the estimated total investment and the funds available. Numerous banks expressed interest in the pipeline project, but most required the sponsor to provide a guarantee for the project's loan. Some banks also asked for an increase in the capital ratio from less than 1 per cent to 20 per cent. The treasurer responsible for the financing of the project was now tasked with the issue of arranging the most effective way to finance the project. Xiuqin Wang is affiliated with Tianjin University. Ming Jian is affiliated with Nanyang Technological University.
Swot Analysis of "The Pipeline Company: Financing for China's MNGPP" written by Xiuqin Wang, Ming Jian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pipeline Project facing as an external strategic factors. Some of the topics covered in The Pipeline Company: Financing for China's MNGPP case study are - Strategic Management Strategies, International business, Project management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Pipeline Company: Financing for China's MNGPP casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing energy prices, there is backlash against globalization,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of The Pipeline Company: Financing for China's MNGPP
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Pipeline Company: Financing for China's MNGPP case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pipeline Project, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pipeline Project 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 The Pipeline Company: Financing for China's MNGPP can be done for the following purposes –
1. Strategic planning using facts provided in The Pipeline Company: Financing for China's MNGPP case study
2. Improving business portfolio management of Pipeline Project
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pipeline Project
Strengths The Pipeline Company: Financing for China's MNGPP | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pipeline Project in The Pipeline Company: Financing for China's MNGPP Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Pipeline Project 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.
Analytics focus
– Pipeline Project 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 Xiuqin Wang, Ming Jian 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.
Ability to recruit top talent
– Pipeline Project is one of the leading recruiters in the industry. Managers in the The Pipeline Company: Financing for China's MNGPP are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the The Pipeline Company: Financing for China's MNGPP 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 Finance & Accounting field
– Pipeline Project 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 Pipeline Project in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Pipeline Project in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Pipeline Project 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 Pipeline Project is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Pipeline Company: Financing for China's MNGPP Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Pipeline Project has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pipeline Project to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Pipeline Project 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 Finance & Accounting industry
– The Pipeline Company: Financing for China's MNGPP firm has clearly differentiated products in the market place. This has enabled Pipeline Project to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Pipeline Project to invest into research and development (R&D) and innovation.
Training and development
– Pipeline Project has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Pipeline Company: Financing for China's MNGPP 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.
Strong track record of project management
– Pipeline Project is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The Pipeline Company: Financing for China's MNGPP | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Pipeline Company: Financing for China's MNGPP are -
Slow decision making process
– As mentioned earlier in the report, Pipeline Project 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. Pipeline Project 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 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 Pipeline Project supply chain. Even after few cautionary changes mentioned in the HBR case study - The Pipeline Company: Financing for China's MNGPP, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pipeline Project vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study The Pipeline Company: Financing for China's MNGPP, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Pipeline Company: Financing for China's MNGPP 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 Pipeline Project has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study The Pipeline Company: Financing for China's MNGPP 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 The Pipeline Company: Financing for China's MNGPP can leverage the sales team experience to cultivate customer relationships as Pipeline Project is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Pipeline Company: Financing for China's MNGPP, in the dynamic environment Pipeline Project has struggled to respond to the nimble upstart competition. Pipeline Project has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Pipeline Project, firm in the HBR case study The Pipeline Company: Financing for China's MNGPP needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Pipeline Company: Financing for China's MNGPP, it seems that the employees of Pipeline Project 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pipeline Project is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Pipeline Company: Financing for China's MNGPP can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As The Pipeline Company: Financing for China's MNGPP HBR case study mentions - Pipeline Project 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.
Need for greater diversity
– Pipeline Project 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.
Opportunities The Pipeline Company: Financing for China's MNGPP | 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 The Pipeline Company: Financing for China's MNGPP are -
Creating value in data economy
– The success of analytics program of Pipeline Project has opened avenues for new revenue streams for the organization in the industry. This can help Pipeline Project to build a more holistic ecosystem as suggested in the The Pipeline Company: Financing for China's MNGPP case study. Pipeline Project 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, Pipeline Project is facing challenges because of the dominance of functional experts in the organization. The Pipeline Company: Financing for China's MNGPP 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pipeline Project 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, The Pipeline Company: Financing for China's MNGPP, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Pipeline Project can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Pipeline Company: Financing for China's MNGPP 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pipeline Project 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. Pipeline Project 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.
Manufacturing automation
– Pipeline Project can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Using analytics as competitive advantage
– Pipeline Project 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 The Pipeline Company: Financing for China's MNGPP - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pipeline Project to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Pipeline Project 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 Finance & Accounting segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pipeline Project 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 Pipeline Project to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Pipeline Project 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.
Better consumer reach
– The expansion of the 5G network will help Pipeline Project to increase its market reach. Pipeline Project 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Pipeline Project can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pipeline Project can use these opportunities to build new business models that can help the communities that Pipeline Project operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats The Pipeline Company: Financing for China's MNGPP External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Pipeline Company: Financing for China's MNGPP 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 Pipeline Project in the Finance & Accounting sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pipeline Project in the Finance & Accounting industry. The Finance & Accounting 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, Pipeline Project 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 The Pipeline Company: Financing for China's MNGPP .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pipeline Project 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 The Pipeline Company: Financing for China's MNGPP, Pipeline Project may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Pipeline Project 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 Pipeline Project.
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.
Environmental challenges
– Pipeline Project 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. Pipeline Project can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pipeline Project can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Pipeline Project 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 Finance & Accounting industry regulations.
Consumer confidence and its impact on Pipeline Project 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.
Weighted SWOT Analysis of The Pipeline Company: Financing for China's MNGPP 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 The Pipeline Company: Financing for China's MNGPP 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 The Pipeline Company: Financing for China's MNGPP 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 The Pipeline Company: Financing for China's MNGPP 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 The Pipeline Company: Financing for China's MNGPP 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 Pipeline Project needs to make to build a sustainable competitive advantage.
