Case Study Description of Maersk: Betting on Blockchain
In March 2018, international shipping giant Maersk is getting ready to debut a trade digitization platform. Maersk hopes the platform will help streamline global trade since shipping goods internationally is an extraordinarily complicated and inefficient process. Maersk intends for stakeholders throughout the supply chain to utilize the platform, including its competitors. Blockchain, made famous through cryptocurrency, will power part of the project. Executives at Maersk believe that Blockchain technology can provide much needed transparency to the global supply chain. Maersk plans to launch the blockchain trade platform as an independent joint venture with IBM. The team at Maersk wonders if this joint venture is the right organization to operate the blockchain project. What challenges will the project face?
Swot Analysis of "Maersk: Betting on Blockchain" written by Rajiv Lal, Scott Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Maersk Blockchain facing as an external strategic factors. Some of the topics covered in Maersk: Betting on Blockchain case study are - Strategic Management Strategies, Joint ventures and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Maersk: Betting on Blockchain casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing commodity prices, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Maersk: Betting on Blockchain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Maersk: Betting on Blockchain case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Maersk Blockchain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Maersk Blockchain 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 Maersk: Betting on Blockchain can be done for the following purposes –
1. Strategic planning using facts provided in Maersk: Betting on Blockchain case study
2. Improving business portfolio management of Maersk Blockchain
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 Maersk Blockchain
Strengths Maersk: Betting on Blockchain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Maersk Blockchain in Maersk: Betting on Blockchain Harvard Business Review case study are -
Ability to recruit top talent
– Maersk Blockchain is one of the leading recruiters in the industry. Managers in the Maersk: Betting on Blockchain are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Maersk Blockchain 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.
High brand equity
– Maersk Blockchain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Maersk Blockchain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Maersk Blockchain in the sector have low bargaining power. Maersk: Betting on Blockchain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Maersk Blockchain to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Maersk Blockchain has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Maersk: Betting on Blockchain 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.
Highly skilled collaborators
– Maersk Blockchain 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 Maersk: Betting on Blockchain HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Maersk Blockchain is present in almost all the verticals within the industry. This has provided firm in Maersk: Betting on Blockchain 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.
Successful track record of launching new products
– Maersk Blockchain has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Maersk Blockchain 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.
Strong track record of project management
– Maersk Blockchain is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Maersk: Betting on Blockchain 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.
High switching costs
– The high switching costs that Maersk Blockchain 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.
Superior customer experience
– The customer experience strategy of Maersk Blockchain in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Maersk: Betting on Blockchain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Maersk: Betting on Blockchain are -
Skills based hiring
– The stress on hiring functional specialists at Maersk Blockchain 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.
Aligning sales with marketing
– It come across in the case study Maersk: Betting on Blockchain 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 Maersk: Betting on Blockchain can leverage the sales team experience to cultivate customer relationships as Maersk Blockchain is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Maersk: Betting on Blockchain, 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.
Lack of clear differentiation of Maersk Blockchain products
– To increase the profitability and margins on the products, Maersk Blockchain needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Maersk Blockchain is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Maersk Blockchain needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Maersk Blockchain to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Maersk Blockchain 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 - Maersk: Betting on Blockchain should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Maersk Blockchain has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Maersk: Betting on Blockchain, is just above the industry average. Maersk Blockchain 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Maersk Blockchain 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Maersk: Betting on Blockchain, in the dynamic environment Maersk Blockchain has struggled to respond to the nimble upstart competition. Maersk Blockchain 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 Maersk Blockchain, firm in the HBR case study Maersk: Betting on Blockchain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Maersk: Betting on Blockchain | 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 Maersk: Betting on Blockchain are -
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. Maersk Blockchain 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. Maersk Blockchain 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.
Buying journey improvements
– Maersk Blockchain can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Maersk: Betting on Blockchain 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.
Leveraging digital technologies
– Maersk Blockchain 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 Maersk Blockchain 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Maersk Blockchain 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.
Manufacturing automation
– Maersk Blockchain 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Maersk Blockchain is facing challenges because of the dominance of functional experts in the organization. Maersk: Betting on Blockchain 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.
Using analytics as competitive advantage
– Maersk Blockchain 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 Maersk: Betting on Blockchain - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Maersk Blockchain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Maersk Blockchain can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Maersk Blockchain 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.
Better consumer reach
– The expansion of the 5G network will help Maersk Blockchain to increase its market reach. Maersk Blockchain 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Maersk Blockchain can use these opportunities to build new business models that can help the communities that Maersk Blockchain operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Developing new processes and practices
– Maersk Blockchain can develop new processes and procedures in Leadership & Managing People 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.
Threats Maersk: Betting on Blockchain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Maersk: Betting on Blockchain are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Maersk Blockchain 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 Maersk: Betting on Blockchain .
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
– Maersk Blockchain has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Maersk Blockchain 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Maersk Blockchain 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 Maersk Blockchain with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Maersk Blockchain 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. Maersk Blockchain can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Maersk Blockchain business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Maersk Blockchain 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.
Shortening product life cycle
– it is one of the major threat that Maersk Blockchain is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Maersk Blockchain 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Maersk Blockchain can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Maersk Blockchain 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.
Weighted SWOT Analysis of Maersk: Betting on Blockchain 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 Maersk: Betting on Blockchain 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 Maersk: Betting on Blockchain 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 Maersk: Betting on Blockchain 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 Maersk: Betting on Blockchain 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 Maersk Blockchain needs to make to build a sustainable competitive advantage.
