"God is Brazilian": Turning Alcohol into Fuel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of "God is Brazilian": Turning Alcohol into Fuel
In September 1979, while Brazil is treading the uncertain and dangerous waters of an oil crisis that has exacerbated the country?s balance of payment, Mario Garnero, the president of the National Association of Automotive Vehicle Manufacturers (ANFAVEA), is desperately looking for an escape to avoid the imminent threat of gasoline rationing and to contain the oil dependency of his country. The idea of developing a local ethanol industry and to produce vehicles that run exclusively on ethanol takes shape step by step, between the different reactions, interests and concerns of five actors: the automakers, the sugar producers, the state owned petrol company, the Government and most importantly the Brazilian customers. This case provides the background for a debate on what were the reasons behind the decision of the government to embark on the ethanol plan, on what were the concerns of the main stakeholders and on how the government should address the requests and the conditions of each of them, in order to implement the right set of measures for the plan effectively takes off and for Brazil to emerge from the crisis and to end its long and painful external oil dependency. The case is a fictional story, although mainly inspired by the real facts, from the perspective of our main character, Mario Garnero, considered the "Father of the Ethanol Car in Brazil".
Authors :: Paola Giordano, Felix Sanchez, Ahmad Rahnema
Swot Analysis of ""God is Brazilian": Turning Alcohol into Fuel" written by Paola Giordano, Felix Sanchez, Ahmad Rahnema includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ethanol Garnero facing as an external strategic factors. Some of the topics covered in "God is Brazilian": Turning Alcohol into Fuel case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the "God is Brazilian": Turning Alcohol into Fuel casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, technology disruption,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of "God is Brazilian": Turning Alcohol into Fuel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in "God is Brazilian": Turning Alcohol into Fuel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ethanol Garnero, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ethanol Garnero 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 "God is Brazilian": Turning Alcohol into Fuel can be done for the following purposes –
1. Strategic planning using facts provided in "God is Brazilian": Turning Alcohol into Fuel case study
2. Improving business portfolio management of Ethanol Garnero
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ethanol Garnero
Strengths "God is Brazilian": Turning Alcohol into Fuel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ethanol Garnero in "God is Brazilian": Turning Alcohol into Fuel Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– "God is Brazilian": Turning Alcohol into Fuel firm has clearly differentiated products in the market place. This has enabled Ethanol Garnero to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ethanol Garnero to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Ethanol Garnero has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in "God is Brazilian": Turning Alcohol into Fuel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Leadership & Managing People field
– Ethanol Garnero 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 Ethanol Garnero in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Ethanol Garnero is one of the leading recruiters in the industry. Managers in the "God is Brazilian": Turning Alcohol into Fuel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Ethanol Garnero 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.
Learning organization
- Ethanol Garnero 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 Ethanol Garnero is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in "God is Brazilian": Turning Alcohol into Fuel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Ethanol Garnero is present in almost all the verticals within the industry. This has provided firm in "God is Brazilian": Turning Alcohol into Fuel 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.
Organizational Resilience of Ethanol Garnero
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ethanol Garnero does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Ethanol Garnero has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ethanol Garnero 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.
Innovation driven organization
– Ethanol Garnero is one of the most innovative firm in sector. Manager in "God is Brazilian": Turning Alcohol into Fuel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Ethanol Garnero is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Ethanol Garnero has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ethanol Garnero to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses "God is Brazilian": Turning Alcohol into Fuel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of "God is Brazilian": Turning Alcohol into Fuel are -
Slow decision making process
– As mentioned earlier in the report, Ethanol Garnero 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. Ethanol Garnero 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 Ethanol Garnero supply chain. Even after few cautionary changes mentioned in the HBR case study - "God is Brazilian": Turning Alcohol into Fuel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ethanol Garnero vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study "God is Brazilian": Turning Alcohol into Fuel 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 "God is Brazilian": Turning Alcohol into Fuel can leverage the sales team experience to cultivate customer relationships as Ethanol Garnero is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Ethanol Garnero is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ethanol Garnero needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ethanol Garnero to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As "God is Brazilian": Turning Alcohol into Fuel HBR case study mentions - Ethanol Garnero 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.
Interest costs
– Compare to the competition, Ethanol Garnero 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.
No frontier risks strategy
– After analyzing the HBR case study "God is Brazilian": Turning Alcohol into Fuel, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Skills based hiring
– The stress on hiring functional specialists at Ethanol Garnero 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ethanol Garnero 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study "God is Brazilian": Turning Alcohol into Fuel, is just above the industry average. Ethanol Garnero 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.
Need for greater diversity
– Ethanol Garnero 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 "God is Brazilian": Turning Alcohol into Fuel | 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 "God is Brazilian": Turning Alcohol into Fuel are -
Building a culture of innovation
– managers at Ethanol Garnero 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 Leadership & Managing People segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ethanol Garnero in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Ethanol Garnero 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.
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 Ethanol Garnero 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.
Using analytics as competitive advantage
– Ethanol Garnero 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 "God is Brazilian": Turning Alcohol into Fuel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ethanol Garnero 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 Ethanol Garnero to increase its market reach. Ethanol Garnero 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ethanol Garnero 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 Ethanol Garnero to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Ethanol Garnero can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ethanol Garnero 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.
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 Ethanol Garnero in the consumer business. Now Ethanol Garnero can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ethanol Garnero can use these opportunities to build new business models that can help the communities that Ethanol Garnero operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ethanol Garnero can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ethanol Garnero 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. Ethanol Garnero 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.
Threats "God is Brazilian": Turning Alcohol into Fuel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study "God is Brazilian": Turning Alcohol into Fuel are -
Environmental challenges
– Ethanol Garnero 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. Ethanol Garnero can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ethanol Garnero 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 "God is Brazilian": Turning Alcohol into Fuel .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ethanol Garnero in the Leadership & Managing People industry. The Leadership & Managing People 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ethanol Garnero with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ethanol Garnero needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Ethanol Garnero
– 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 Ethanol Garnero.
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.
Technology acceleration in Forth Industrial Revolution
– Ethanol Garnero has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ethanol Garnero needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study "God is Brazilian": Turning Alcohol into Fuel, Ethanol Garnero may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Regulatory challenges
– Ethanol Garnero 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 Leadership & Managing People industry regulations.
High dependence on third party suppliers
– Ethanol Garnero 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.
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 Ethanol Garnero in the Leadership & Managing People sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of "God is Brazilian": Turning Alcohol into Fuel 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 "God is Brazilian": Turning Alcohol into Fuel 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 "God is Brazilian": Turning Alcohol into Fuel 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 "God is Brazilian": Turning Alcohol into Fuel 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 "God is Brazilian": Turning Alcohol into Fuel 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 Ethanol Garnero needs to make to build a sustainable competitive advantage.