The October 2009 Petrobras Bond Issue (C) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The October 2009 Petrobras Bond Issue (C)
The Petrobras case explores the debt financing decisions of one of the largest oil companies in the world. The task is to decide on debt issues that are needed to finance growth investments of Petrobras. Learning objectives: The case gives the opportunity to price a corporate bond issue, and understand the mechanics behind bond markets. Some of the topics that can be covered are: expected costs (percentage yield) that Petrobras will incur, ratings and spreads, financial crisis, coupon rates and the value of the bonds, underwriter discount, all-in-cost of the bond.
Swot Analysis of "The October 2009 Petrobras Bond Issue (C)" written by Nuno Fernandes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Petrobras Bond facing as an external strategic factors. Some of the topics covered in The October 2009 Petrobras Bond Issue (C) case study are - Strategic Management Strategies, Financial management, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The October 2009 Petrobras Bond Issue (C) casestudy better are - – geopolitical disruptions, increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, technology disruption,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The October 2009 Petrobras Bond Issue (C)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The October 2009 Petrobras Bond Issue (C) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Petrobras Bond, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) can be done for the following purposes –
1. Strategic planning using facts provided in The October 2009 Petrobras Bond Issue (C) case study
2. Improving business portfolio management of Petrobras Bond
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 Petrobras Bond
Strengths The October 2009 Petrobras Bond Issue (C) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Petrobras Bond in The October 2009 Petrobras Bond Issue (C) Harvard Business Review case study are -
Successful track record of launching new products
– Petrobras Bond has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Petrobras Bond 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.
Training and development
– Petrobras Bond has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The October 2009 Petrobras Bond Issue (C) 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.
High brand equity
– Petrobras Bond has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Petrobras Bond to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Petrobras Bond 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 Petrobras Bond in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Petrobras Bond in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Petrobras Bond is one of the leading recruiters in the industry. Managers in the The October 2009 Petrobras Bond Issue (C) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Petrobras Bond 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 Nuno Fernandes 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.
Low bargaining power of suppliers
– Suppliers of Petrobras Bond in the sector have low bargaining power. The October 2009 Petrobras Bond Issue (C) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Petrobras Bond to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the The October 2009 Petrobras Bond Issue (C) 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.
Highly skilled collaborators
– Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Petrobras Bond is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The October 2009 Petrobras Bond Issue (C) are -
No frontier risks strategy
– After analyzing the HBR case study The October 2009 Petrobras Bond Issue (C), 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.
High cash cycle compare to competitors
Petrobras Bond has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The October 2009 Petrobras Bond Issue (C) 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 Petrobras Bond has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study The October 2009 Petrobras Bond Issue (C) 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 Petrobras Bond 's lucrative customers.
Aligning sales with marketing
– It come across in the case study The October 2009 Petrobras Bond Issue (C) 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 The October 2009 Petrobras Bond Issue (C) can leverage the sales team experience to cultivate customer relationships as Petrobras Bond is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The October 2009 Petrobras Bond Issue (C), in the dynamic environment Petrobras Bond has struggled to respond to the nimble upstart competition. Petrobras Bond has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The October 2009 Petrobras Bond Issue (C), is just above the industry average. Petrobras Bond 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Petrobras Bond is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The October 2009 Petrobras Bond Issue (C) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Petrobras Bond 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.
Products dominated business model
– Even though Petrobras Bond 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 - The October 2009 Petrobras Bond Issue (C) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Petrobras Bond is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Petrobras Bond needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Petrobras Bond to focus more on services rather than just following the product oriented approach.
Opportunities The October 2009 Petrobras Bond Issue (C) | 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 The October 2009 Petrobras Bond Issue (C) are -
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 Petrobras Bond to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Petrobras Bond to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Petrobras Bond 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 Petrobras Bond to hire the very best people irrespective of their geographical location.
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. Petrobras Bond can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Petrobras Bond 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Petrobras Bond 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.
Buying journey improvements
– Petrobras Bond can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The October 2009 Petrobras Bond Issue (C) 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.
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 Petrobras Bond in the consumer business. Now Petrobras Bond can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Petrobras Bond is facing challenges because of the dominance of functional experts in the organization. The October 2009 Petrobras Bond Issue (C) 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.
Creating value in data economy
– The success of analytics program of Petrobras Bond has opened avenues for new revenue streams for the organization in the industry. This can help Petrobras Bond to build a more holistic ecosystem as suggested in the The October 2009 Petrobras Bond Issue (C) case study. Petrobras Bond can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Petrobras Bond 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.
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. Petrobras Bond 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. Petrobras Bond 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.
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. Petrobras Bond can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats The October 2009 Petrobras Bond Issue (C) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The October 2009 Petrobras Bond Issue (C) are -
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. Petrobras Bond 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.
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 Petrobras Bond business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Petrobras Bond with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Petrobras Bond 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.
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.
Environmental challenges
– Petrobras Bond 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. Petrobras Bond can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Petrobras Bond
– 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 Petrobras Bond.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The October 2009 Petrobras Bond Issue (C), Petrobras Bond 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) .
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. Petrobras Bond 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
– Petrobras Bond has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Petrobras Bond 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.
Shortening product life cycle
– it is one of the major threat that Petrobras Bond is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Petrobras Bond 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 The October 2009 Petrobras Bond Issue (C) 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 The October 2009 Petrobras Bond Issue (C) 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 The October 2009 Petrobras Bond Issue (C) 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 The October 2009 Petrobras Bond Issue (C) 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 The October 2009 Petrobras Bond Issue (C) 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 Petrobras Bond needs to make to build a sustainable competitive advantage.