Revenue Flow and Human Rights: A Paradox for Shell Nigeria SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Revenue Flow and Human Rights: A Paradox for Shell Nigeria
The case describes Shell's evolution within the context of sensitive human rights issues related to oil exploration and exploitation in Nigeria. Given that much of the revenue from Nigerian oil resources was being "siphoned" off by corrupt state governors, the case focuses on issues relevant to government transparency and corruption. It describes Shell's involvement in the Extractive Industries Transparency Initiative (EITI) and its collaboration with the Nigerian Government to instigate a more transparent reporting on oil revenues. However, since two senior Shell executives involved in EITI and negotiations with the government are about to retire from the company, the prospect of briefing their successors on the complexity of the Nigerian situation brings a number of questions that still remain to be answered "to the table". Learning objective: Participants learn about the invasive nature of corruption and its effect on human rights, but more specifically about the role of a multinational versus the role of the government when trying to deal with such issues. Participants will also learn a great deal about the complexity of sustainability issues for corporations, particularly human rights, issues. There is also learning about the scope and limits of corporate responsibility, and the difficulties that all players face in tough market conditions and a on a "non-level playing field". Participants can develop new insights on ways of operating responsibly, creating valuable partnerships and interacting in a global, but socially responsible, context.
Swot Analysis of "Revenue Flow and Human Rights: A Paradox for Shell Nigeria" written by Ulrich Steger, Aileen Ionescu-Somers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nigerian Eiti facing as an external strategic factors. Some of the topics covered in Revenue Flow and Human Rights: A Paradox for Shell Nigeria case study are - Strategic Management Strategies, Social responsibility, Sustainability, Transparency and Global Business.
Some of the macro environment factors that can be used to understand the Revenue Flow and Human Rights: A Paradox for Shell Nigeria casestudy better are - – wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Revenue Flow and Human Rights: A Paradox for Shell Nigeria
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Revenue Flow and Human Rights: A Paradox for Shell Nigeria case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nigerian Eiti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nigerian Eiti 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria can be done for the following purposes –
1. Strategic planning using facts provided in Revenue Flow and Human Rights: A Paradox for Shell Nigeria case study
2. Improving business portfolio management of Nigerian Eiti
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nigerian Eiti
Strengths Revenue Flow and Human Rights: A Paradox for Shell Nigeria | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nigerian Eiti in Revenue Flow and Human Rights: A Paradox for Shell Nigeria Harvard Business Review case study are -
High switching costs
– The high switching costs that Nigerian Eiti 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.
Ability to lead change in Global Business field
– Nigerian Eiti 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 Nigerian Eiti in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– Revenue Flow and Human Rights: A Paradox for Shell Nigeria firm has clearly differentiated products in the market place. This has enabled Nigerian Eiti to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Nigerian Eiti to invest into research and development (R&D) and innovation.
Learning organization
- Nigerian Eiti 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 Nigerian Eiti is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Revenue Flow and Human Rights: A Paradox for Shell Nigeria Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Nigerian Eiti has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nigerian Eiti to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Nigerian Eiti in the sector have low bargaining power. Revenue Flow and Human Rights: A Paradox for Shell Nigeria has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nigerian Eiti to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Nigerian Eiti is one of the most innovative firm in sector. Manager in Revenue Flow and Human Rights: A Paradox for Shell Nigeria Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Nigerian Eiti 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Nigerian Eiti is one of the leading recruiters in the industry. Managers in the Revenue Flow and Human Rights: A Paradox for Shell Nigeria are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Nigerian Eiti has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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.
Operational resilience
– The operational resilience strategy in the Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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.
Successful track record of launching new products
– Nigerian Eiti has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nigerian Eiti 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.
Weaknesses Revenue Flow and Human Rights: A Paradox for Shell Nigeria | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Revenue Flow and Human Rights: A Paradox for Shell Nigeria are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Nigerian Eiti has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Revenue Flow and Human Rights: A Paradox for Shell Nigeria, in the dynamic environment Nigerian Eiti has struggled to respond to the nimble upstart competition. Nigerian Eiti has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Nigerian Eiti 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.
Skills based hiring
– The stress on hiring functional specialists at Nigerian Eiti 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Revenue Flow and Human Rights: A Paradox for Shell Nigeria, is just above the industry average. Nigerian Eiti 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, Nigerian Eiti is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Revenue Flow and Human Rights: A Paradox for Shell Nigeria can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Nigerian Eiti 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. Nigerian Eiti 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.
Slow to strategic competitive environment developments
– As Revenue Flow and Human Rights: A Paradox for Shell Nigeria HBR case study mentions - Nigerian Eiti takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 Nigerian Eiti supply chain. Even after few cautionary changes mentioned in the HBR case study - Revenue Flow and Human Rights: A Paradox for Shell Nigeria, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nigerian Eiti vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Nigerian Eiti products
– To increase the profitability and margins on the products, Nigerian Eiti needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Nigerian Eiti 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.
Opportunities Revenue Flow and Human Rights: A Paradox for Shell Nigeria | 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria are -
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. Nigerian Eiti can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Nigerian Eiti can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nigerian Eiti can use these opportunities to build new business models that can help the communities that Nigerian Eiti operates in. Secondly it can use opportunities from government spending in Global Business sector.
Leveraging digital technologies
– Nigerian Eiti 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.
Manufacturing automation
– Nigerian Eiti can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nigerian Eiti in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nigerian Eiti 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 Nigerian Eiti to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Nigerian Eiti to increase its market reach. Nigerian Eiti 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.
Creating value in data economy
– The success of analytics program of Nigerian Eiti has opened avenues for new revenue streams for the organization in the industry. This can help Nigerian Eiti to build a more holistic ecosystem as suggested in the Revenue Flow and Human Rights: A Paradox for Shell Nigeria case study. Nigerian Eiti can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nigerian Eiti is facing challenges because of the dominance of functional experts in the organization. Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nigerian Eiti can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nigerian Eiti 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.
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 Nigerian Eiti 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.
Threats Revenue Flow and Human Rights: A Paradox for Shell Nigeria External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Revenue Flow and Human Rights: A Paradox for Shell Nigeria are -
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 Nigerian Eiti in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Nigerian Eiti has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Nigerian Eiti needs to keep up with the evolution of technology in the Global Business 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.
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. Nigerian Eiti 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.
Stagnating economy with rate increase
– Nigerian Eiti 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nigerian Eiti can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Nigerian Eiti.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nigerian Eiti in the Global Business industry. The Global Business 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Nigerian Eiti 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 Global Business industry regulations.
Environmental challenges
– Nigerian Eiti 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. Nigerian Eiti can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Nigerian Eiti business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nigerian Eiti 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Revenue Flow and Human Rights: A Paradox for Shell Nigeria 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 Nigerian Eiti needs to make to build a sustainable competitive advantage.
