Swot Analysis of "Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B)" written by Thomas K. McCraw includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oil Standard facing as an external strategic factors. Some of the topics covered in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) case study are - Strategic Management Strategies, Competition, Growth strategy, Organizational structure and Global Business.
Some of the macro environment factors that can be used to understand the Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing energy prices, increasing government debt because of Covid-19 spendings,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oil Standard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oil Standard 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) can be done for the following purposes –
1. Strategic planning using facts provided in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) case study
2. Improving business portfolio management of Oil Standard
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 Oil Standard
Strengths Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oil Standard in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) Harvard Business Review case study are -
Successful track record of launching new products
– Oil Standard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oil Standard 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
– Oil Standard has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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.
Ability to recruit top talent
– Oil Standard is one of the leading recruiters in the industry. Managers in the Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Oil Standard is one of the most innovative firm in sector. Manager in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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.
High brand equity
– Oil Standard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oil Standard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Oil Standard in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Oil Standard 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.
Learning organization
- Oil Standard 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 Standard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Oil Standard 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Oil Standard
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oil Standard does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Oil Standard in the sector have low bargaining power. Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oil Standard to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) are -
Workers concerns about automation
– As automation is fast increasing in the segment, Oil Standard 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 bargaining power of channel partners
– Because of the regulatory requirements, Thomas K. McCraw suggests that, Oil Standard 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.
Products dominated business model
– Even though Oil Standard 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 - Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oil Standard is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Oil Standard, firm in the HBR case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) can leverage the sales team experience to cultivate customer relationships as Oil Standard is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Oil Standard is dominated by functional specialists. It is not different from other players in the Global Business segment. Oil Standard needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oil Standard to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B), it seems that the employees of Oil Standard 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.
Skills based hiring
– The stress on hiring functional specialists at Oil Standard 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 Standard supply chain. Even after few cautionary changes mentioned in the HBR case study - Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Oil Standard vulnerable to further global disruptions in South East Asia.
Opportunities Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) | 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) are -
Learning at scale
– Online learning technologies has now opened space for Oil Standard 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.
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 Standard can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oil Standard 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, Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B), 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 Global Business industry, but it has also influenced the consumer preferences. Oil Standard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oil Standard 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.
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 Oil Standard 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oil Standard can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Oil Standard in the consumer business. Now Oil Standard can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Oil Standard 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.
Using analytics as competitive advantage
– Oil Standard 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oil Standard to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Standard can use these opportunities to build new business models that can help the communities that Oil Standard operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Oil Standard can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oil Standard 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.
Threats Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) are -
Technology acceleration in Forth Industrial Revolution
– Oil Standard has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Oil Standard 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.
Environmental challenges
– Oil Standard 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 Standard can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oil Standard 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) .
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 Oil Standard in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Oil Standard 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.
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.
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 Standard business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Oil Standard 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.
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 Oil Standard.
Consumer confidence and its impact on Oil Standard demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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. Oil Standard 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.
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. Oil Standard needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Standard needs to make to build a sustainable competitive advantage.
