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 - – central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, technology disruption,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, 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 -
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.
Strong track record of project management
– Oil Standard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Diverse revenue streams
– Oil Standard is present in almost all the verticals within the industry. This has provided firm in Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Oil Standard digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oil Standard 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.
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.
Analytics focus
– Oil Standard 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 Thomas K. McCraw 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.
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.
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.
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.
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.
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 -
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) 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 Oil Standard 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B), it seems that company is thinking about the frontier risks that can impact Global Business 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
Oil Standard 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.
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.
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.
Slow to strategic competitive environment developments
– As Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) HBR case study mentions - Oil Standard 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.
Capital Spending Reduction
– Even during the low interest decade, Oil Standard 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.
Lack of clear differentiation of Oil Standard products
– To increase the profitability and margins on the products, Oil Standard needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
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.
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.
Developing new processes and practices
– Oil Standard can develop new processes and procedures in Global Business 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.
Building a culture of innovation
– managers at Oil Standard 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 Global Business segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oil Standard 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 Standard to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Loyalty marketing
– Oil Standard 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.
Creating value in data economy
– The success of analytics program of Oil Standard has opened avenues for new revenue streams for the organization in the industry. This can help Oil Standard to build a more holistic ecosystem as suggested in the Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B) case study. Oil Standard can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Standard Oil Co.: Combination, Consolidation, and Integration (Abridged) (B), Oil Standard may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oil Standard 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Oil Standard is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
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.
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.
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.