Case Study Description of Note on Master Limited Partnerships
Master limited partnerships (MLPs) are limited partnerships that trade on public exchanges in the form of units, similar to common stock. MLPs have several advantages relative to traditional C corporations (C-corps) that have resulted in their frequent use to finance energy-infrastructure assets. The general partners (GPs) retain control of the assets placed in the MLP, can drop down assets to the MLP, often at advantageous prices, and receive incentive distribution rights (IDRs). IDRs increase the GPs' share of the distributions over time, which in turn affects the MLPs' cost of capital. MLPs do not pay taxes at the entity level, which increases the amount of cash that can be paid to GPs and unitholders. MLPs trade on the basis of their yield and the stability and growth of their distributions. This technical note provides a brief history of MLPs, a description of their key features and terms, and several approaches to valuing them.
Authors :: Susan Chaplinsky, Betty J. Simkins, Sheridan Titman
Swot Analysis of "Note on Master Limited Partnerships" written by Susan Chaplinsky, Betty J. Simkins, Sheridan Titman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mlps Gps facing as an external strategic factors. Some of the topics covered in Note on Master Limited Partnerships case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Note on Master Limited Partnerships casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Note on Master Limited Partnerships
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Note on Master Limited Partnerships case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mlps Gps, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mlps Gps 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 Note on Master Limited Partnerships can be done for the following purposes –
1. Strategic planning using facts provided in Note on Master Limited Partnerships case study
2. Improving business portfolio management of Mlps Gps
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 Mlps Gps
Strengths Note on Master Limited Partnerships | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mlps Gps in Note on Master Limited Partnerships Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Note on Master Limited Partnerships firm has clearly differentiated products in the market place. This has enabled Mlps Gps to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Mlps Gps to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Mlps Gps 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 Note on Master Limited Partnerships HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Mlps Gps has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Note on Master Limited Partnerships - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Mlps Gps is present in almost all the verticals within the industry. This has provided firm in Note on Master Limited Partnerships 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.
Ability to lead change in Finance & Accounting field
– Mlps Gps 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 Mlps Gps in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Mlps Gps has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mlps Gps 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.
Analytics focus
– Mlps Gps 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 Susan Chaplinsky, Betty J. Simkins, Sheridan Titman 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.
Organizational Resilience of Mlps Gps
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mlps Gps does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Mlps Gps 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.
Low bargaining power of suppliers
– Suppliers of Mlps Gps in the sector have low bargaining power. Note on Master Limited Partnerships has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mlps Gps to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Mlps Gps 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 Mlps Gps is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Note on Master Limited Partnerships Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Mlps Gps has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Note on Master Limited Partnerships 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 Note on Master Limited Partnerships | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Note on Master Limited Partnerships are -
Slow decision making process
– As mentioned earlier in the report, Mlps Gps 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. Mlps Gps 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 star products
– The top 2 products and services of the firm as mentioned in the Note on Master Limited Partnerships 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 Mlps Gps has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Note on Master Limited Partnerships, is just above the industry average. Mlps Gps 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.
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 Mlps Gps supply chain. Even after few cautionary changes mentioned in the HBR case study - Note on Master Limited Partnerships, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mlps Gps vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Mlps Gps 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.
Lack of clear differentiation of Mlps Gps products
– To increase the profitability and margins on the products, Mlps Gps needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Mlps Gps 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
– Mlps Gps 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.
Increasing silos among functional specialists
– The organizational structure of Mlps Gps is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Mlps Gps needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mlps Gps to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Note on Master Limited Partnerships 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 Mlps Gps 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Note on Master Limited Partnerships, in the dynamic environment Mlps Gps has struggled to respond to the nimble upstart competition. Mlps Gps has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Note on Master Limited Partnerships | 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 Note on Master Limited Partnerships are -
Loyalty marketing
– Mlps Gps 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.
Better consumer reach
– The expansion of the 5G network will help Mlps Gps to increase its market reach. Mlps Gps 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.
Using analytics as competitive advantage
– Mlps Gps 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 Note on Master Limited Partnerships - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mlps Gps to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mlps Gps can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Mlps Gps 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mlps Gps 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.
Creating value in data economy
– The success of analytics program of Mlps Gps has opened avenues for new revenue streams for the organization in the industry. This can help Mlps Gps to build a more holistic ecosystem as suggested in the Note on Master Limited Partnerships case study. Mlps Gps can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mlps Gps in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Mlps Gps in the consumer business. Now Mlps Gps can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Mlps Gps 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mlps Gps is facing challenges because of the dominance of functional experts in the organization. Note on Master Limited Partnerships 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mlps Gps can use these opportunities to build new business models that can help the communities that Mlps Gps operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Mlps Gps 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.
Threats Note on Master Limited Partnerships External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Note on Master Limited Partnerships are -
Environmental challenges
– Mlps Gps 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. Mlps Gps can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High dependence on third party suppliers
– Mlps Gps high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mlps Gps can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mlps Gps 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 Note on Master Limited Partnerships .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mlps Gps will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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 Mlps Gps.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mlps Gps 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. Mlps Gps needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Mlps Gps business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mlps Gps 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.
Consumer confidence and its impact on Mlps Gps 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.
Increasing wage structure of Mlps Gps
– 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 Mlps Gps.
Technology acceleration in Forth Industrial Revolution
– Mlps Gps has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Mlps Gps needs to keep up with the evolution of technology in the Finance & Accounting 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.
Weighted SWOT Analysis of Note on Master Limited Partnerships 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 Note on Master Limited Partnerships 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 Note on Master Limited Partnerships 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 Note on Master Limited Partnerships 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 Note on Master Limited Partnerships 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 Mlps Gps needs to make to build a sustainable competitive advantage.
