Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)
Aubrey McClendon, founder and CEO of Chesapeake Energy, was, according to Fortune Magazine, the highest paid U.S. CEO in 2008 receiving over $100 million in total compensation. McClendon received this compensation despite a significant drop in the company's stock price and financial performance during the year. The (A) case addresses the specifics of the compensation and the rationale for the compensation from the perspective of Chesapeake's board and its compensation committee including McClendon's role in consummating several joint ventures, which the board and committee believed positioned the company for future growth in the relatively young industry of unconventional natural gas exploration and extraction. In addition, the (A) case describes the role of the compensation committee and the company's executive performance measurement factors.
Authors :: Paul M. Healy, Clayton Rose, Aldo Sesia
Swot Analysis of "Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)" written by Paul M. Healy, Clayton Rose, Aldo Sesia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Compensation Mcclendon facing as an external strategic factors. Some of the topics covered in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) case study are - Strategic Management Strategies, Compensation, Corporate governance, Ethics, Financial analysis, Financial management, Growth strategy, Joint ventures, Leadership and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , geopolitical disruptions, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Compensation Mcclendon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Compensation Mcclendon 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) can be done for the following purposes –
1. Strategic planning using facts provided in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) case study
2. Improving business portfolio management of Compensation Mcclendon
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 Compensation Mcclendon
Strengths Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Compensation Mcclendon in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) Harvard Business Review case study are -
Ability to recruit top talent
– Compensation Mcclendon is one of the leading recruiters in the industry. Managers in the Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Compensation Mcclendon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Compensation Mcclendon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Compensation Mcclendon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Compensation Mcclendon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Compensation Mcclendon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Compensation Mcclendon is one of the most innovative firm in sector. Manager in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Compensation Mcclendon 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Compensation Mcclendon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Compensation Mcclendon in the sector have low bargaining power. Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Compensation Mcclendon to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Compensation Mcclendon 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 Paul M. Healy, Clayton Rose, Aldo Sesia 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.
Cross disciplinary teams
– Horizontal connected teams at the Compensation Mcclendon 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.
Diverse revenue streams
– Compensation Mcclendon is present in almost all the verticals within the industry. This has provided firm in Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) firm has clearly differentiated products in the market place. This has enabled Compensation Mcclendon to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Compensation Mcclendon to invest into research and development (R&D) and innovation.
Weaknesses Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Compensation Mcclendon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), in the dynamic environment Compensation Mcclendon has struggled to respond to the nimble upstart competition. Compensation Mcclendon has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), 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.
Increasing silos among functional specialists
– The organizational structure of Compensation Mcclendon is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Compensation Mcclendon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Compensation Mcclendon to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Compensation Mcclendon 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Compensation Mcclendon 's lucrative customers.
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 Compensation Mcclendon supply chain. Even after few cautionary changes mentioned in the HBR case study - Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Compensation Mcclendon vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul M. Healy, Clayton Rose, Aldo Sesia suggests that, Compensation Mcclendon is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, Compensation Mcclendon 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.
Low market penetration in new markets
– Outside its home market of Compensation Mcclendon, firm in the HBR case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), it seems that the employees of Compensation Mcclendon 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.
Opportunities Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) | 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) are -
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. Compensation Mcclendon 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. Compensation Mcclendon 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Compensation Mcclendon 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 Compensation Mcclendon to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Compensation Mcclendon 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.
Developing new processes and practices
– Compensation Mcclendon can develop new processes and procedures in Finance & Accounting 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Compensation Mcclendon 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, Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Compensation Mcclendon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Compensation Mcclendon has opened avenues for new revenue streams for the organization in the industry. This can help Compensation Mcclendon to build a more holistic ecosystem as suggested in the Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) case study. Compensation Mcclendon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Compensation Mcclendon 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.
Learning at scale
– Online learning technologies has now opened space for Compensation Mcclendon 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.
Buying journey improvements
– Compensation Mcclendon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Compensation Mcclendon is facing challenges because of the dominance of functional experts in the organization. Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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.
Better consumer reach
– The expansion of the 5G network will help Compensation Mcclendon to increase its market reach. Compensation Mcclendon 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Compensation Mcclendon 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.
Threats Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) are -
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. Compensation Mcclendon needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Compensation Mcclendon has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Compensation Mcclendon 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.
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 Compensation Mcclendon in the Finance & Accounting sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Compensation Mcclendon 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Compensation Mcclendon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Compensation Mcclendon
– 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 Compensation Mcclendon.
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. Compensation Mcclendon can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A), Compensation Mcclendon 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 .
Shortening product life cycle
– it is one of the major threat that Compensation Mcclendon is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Compensation Mcclendon 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Compensation Mcclendon 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.
Stagnating economy with rate increase
– Compensation Mcclendon can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Aubrey McClendon's Special Incentive Compensation at Chesapeake Energy (A) 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 Compensation Mcclendon needs to make to build a sustainable competitive advantage.