Note on Crude Oil and Crude Oil Derivatives Markets SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Note on Crude Oil and Crude Oil Derivatives Markets
Briefly describes the crude oil markets and common derivatives contracts written on oil. The contracts are oil forward and futures contracts, and over-the-counter oil price swaps.
Swot Analysis of "Note on Crude Oil and Crude Oil Derivatives Markets" written by Andre F. Perold, Kuljot Singh, Wai Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oil Crude facing as an external strategic factors. Some of the topics covered in Note on Crude Oil and Crude Oil Derivatives Markets case study are - Strategic Management Strategies, Negotiations and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Note on Crude Oil and Crude Oil Derivatives Markets casestudy better are - – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Note on Crude Oil and Crude Oil Derivatives Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Note on Crude Oil and Crude Oil Derivatives Markets case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oil Crude, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oil Crude 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 Crude Oil and Crude Oil Derivatives Markets can be done for the following purposes –
1. Strategic planning using facts provided in Note on Crude Oil and Crude Oil Derivatives Markets case study
2. Improving business portfolio management of Oil Crude
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 Oil Crude
Strengths Note on Crude Oil and Crude Oil Derivatives Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oil Crude in Note on Crude Oil and Crude Oil Derivatives Markets Harvard Business Review case study are -
Effective Research and Development (R&D)
– Oil Crude 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 Crude Oil and Crude Oil Derivatives Markets - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Note on Crude Oil and Crude Oil Derivatives Markets firm has clearly differentiated products in the market place. This has enabled Oil Crude to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Oil Crude to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Oil Crude 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 Crude Oil and Crude Oil Derivatives Markets HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Oil Crude is present in almost all the verticals within the industry. This has provided firm in Note on Crude Oil and Crude Oil Derivatives Markets 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 recruit top talent
– Oil Crude is one of the leading recruiters in the industry. Managers in the Note on Crude Oil and Crude Oil Derivatives Markets 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 brand equity
– Oil Crude has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oil Crude to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Oil Crude has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Note on Crude Oil and Crude Oil Derivatives Markets 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.
Low bargaining power of suppliers
– Suppliers of Oil Crude in the sector have low bargaining power. Note on Crude Oil and Crude Oil Derivatives Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oil Crude to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Oil Crude digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oil Crude has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Oil Crude 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 Oil Crude is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Note on Crude Oil and Crude Oil Derivatives Markets Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Oil Crude has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oil Crude 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.
High switching costs
– The high switching costs that Oil Crude 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.
Weaknesses Note on Crude Oil and Crude Oil Derivatives Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Note on Crude Oil and Crude Oil Derivatives Markets are -
Low market penetration in new markets
– Outside its home market of Oil Crude, firm in the HBR case study Note on Crude Oil and Crude Oil Derivatives Markets needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Note on Crude Oil and Crude Oil Derivatives Markets 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 Oil Crude 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 Crude Oil and Crude Oil Derivatives Markets, is just above the industry average. Oil Crude 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.
Increasing silos among functional specialists
– The organizational structure of Oil Crude is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Oil Crude needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oil Crude to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Oil Crude 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.
Skills based hiring
– The stress on hiring functional specialists at Oil Crude 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.
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 Oil Crude supply chain. Even after few cautionary changes mentioned in the HBR case study - Note on Crude Oil and Crude Oil Derivatives Markets, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Oil Crude vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Oil Crude products
– To increase the profitability and margins on the products, Oil Crude needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Note on Crude Oil and Crude Oil Derivatives Markets, it seems that the employees of Oil Crude 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.
No frontier risks strategy
– After analyzing the HBR case study Note on Crude Oil and Crude Oil Derivatives Markets, 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.
Interest costs
– Compare to the competition, Oil Crude 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.
Opportunities Note on Crude Oil and Crude Oil Derivatives Markets | 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 Crude Oil and Crude Oil Derivatives Markets are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oil Crude 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 Oil Crude to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Oil Crude has opened avenues for new revenue streams for the organization in the industry. This can help Oil Crude to build a more holistic ecosystem as suggested in the Note on Crude Oil and Crude Oil Derivatives Markets case study. Oil Crude can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Oil Crude 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.
Buying journey improvements
– Oil Crude can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Note on Crude Oil and Crude Oil Derivatives Markets 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Oil Crude can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oil Crude 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oil Crude can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Oil Crude can use these opportunities to build new business models that can help the communities that Oil Crude operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Oil Crude 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.
Leveraging digital technologies
– Oil Crude 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oil Crude 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.
Learning at scale
– Online learning technologies has now opened space for Oil Crude 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.
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. Oil Crude can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Note on Crude Oil and Crude Oil Derivatives Markets 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 Crude Oil and Crude Oil Derivatives Markets are -
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.
Increasing wage structure of Oil Crude
– 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 Oil Crude.
Technology acceleration in Forth Industrial Revolution
– Oil Crude has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Oil Crude 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Note on Crude Oil and Crude Oil Derivatives Markets, Oil Crude 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 .
High dependence on third party suppliers
– Oil Crude 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oil Crude in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oil Crude 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 Crude Oil and Crude Oil Derivatives Markets .
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.
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 Oil Crude business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Oil Crude 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. Oil Crude can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oil Crude with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Oil Crude is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Oil Crude 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.
Weighted SWOT Analysis of Note on Crude Oil and Crude Oil Derivatives Markets 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 Crude Oil and Crude Oil Derivatives Markets 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 Crude Oil and Crude Oil Derivatives Markets 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 Crude Oil and Crude Oil Derivatives Markets 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 Crude Oil and Crude Oil Derivatives Markets 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 Oil Crude needs to make to build a sustainable competitive advantage.
