Gazprom (C): The Ukrainian Crisis and Its Aftermath SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gazprom (C): The Ukrainian Crisis and Its Aftermath
The case describes the resolution to the January 2006 gas crisis, precipitated by the decision of Gazprom, the largest natural gas producer in the world, to cut off gas supply to Ukraine because of disagreement on the terms of future trade. The case also narrates the events that have followed: the adoption by Gazprom of a comprehensive policy to renegotiate prices with the rest of the former Soviet states; the erratic relationship with Ukraine, dependent on the internal political configuration in the latter at any given time; and a persistence of Gazprom's negative image in the world.
Authors :: Rawi Abdelal, Sogomon Tarontsi, Alexander Jorov
Swot Analysis of "Gazprom (C): The Ukrainian Crisis and Its Aftermath" written by Rawi Abdelal, Sogomon Tarontsi, Alexander Jorov includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gazprom Ukraine facing as an external strategic factors. Some of the topics covered in Gazprom (C): The Ukrainian Crisis and Its Aftermath case study are - Strategic Management Strategies, Global strategy, Globalization and Global Business.
Some of the macro environment factors that can be used to understand the Gazprom (C): The Ukrainian Crisis and Its Aftermath casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Gazprom (C): The Ukrainian Crisis and Its Aftermath
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gazprom (C): The Ukrainian Crisis and Its Aftermath case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gazprom Ukraine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gazprom Ukraine 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath can be done for the following purposes –
1. Strategic planning using facts provided in Gazprom (C): The Ukrainian Crisis and Its Aftermath case study
2. Improving business portfolio management of Gazprom Ukraine
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 Gazprom Ukraine
Strengths Gazprom (C): The Ukrainian Crisis and Its Aftermath | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gazprom Ukraine in Gazprom (C): The Ukrainian Crisis and Its Aftermath Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Gazprom (C): The Ukrainian Crisis and Its Aftermath 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.
Training and development
– Gazprom Ukraine has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gazprom (C): The Ukrainian Crisis and Its Aftermath 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.
Superior customer experience
– The customer experience strategy of Gazprom Ukraine in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Gazprom Ukraine is present in almost all the verticals within the industry. This has provided firm in Gazprom (C): The Ukrainian Crisis and Its Aftermath 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.
Sustainable margins compare to other players in Global Business industry
– Gazprom (C): The Ukrainian Crisis and Its Aftermath firm has clearly differentiated products in the market place. This has enabled Gazprom Ukraine to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Gazprom Ukraine to invest into research and development (R&D) and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Gazprom Ukraine digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gazprom Ukraine 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.
Innovation driven organization
– Gazprom Ukraine is one of the most innovative firm in sector. Manager in Gazprom (C): The Ukrainian Crisis and Its Aftermath Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Gazprom Ukraine are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Gazprom Ukraine 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 Rawi Abdelal, Sogomon Tarontsi, Alexander Jorov 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.
Learning organization
- Gazprom Ukraine 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 Gazprom Ukraine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gazprom (C): The Ukrainian Crisis and Its Aftermath Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Gazprom Ukraine 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 Gazprom Ukraine in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Gazprom Ukraine has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Gazprom (C): The Ukrainian Crisis and Its Aftermath - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Gazprom (C): The Ukrainian Crisis and Its Aftermath | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gazprom (C): The Ukrainian Crisis and Its Aftermath are -
High cash cycle compare to competitors
Gazprom Ukraine 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Gazprom Ukraine 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom Ukraine has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom Ukraine 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Gazprom Ukraine 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.
Slow to strategic competitive environment developments
– As Gazprom (C): The Ukrainian Crisis and Its Aftermath HBR case study mentions - Gazprom Ukraine 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.
Aligning sales with marketing
– It come across in the case study Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath can leverage the sales team experience to cultivate customer relationships as Gazprom Ukraine is planning to shift buying processes online.
Need for greater diversity
– Gazprom Ukraine 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.
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 Gazprom Ukraine supply chain. Even after few cautionary changes mentioned in the HBR case study - Gazprom (C): The Ukrainian Crisis and Its Aftermath, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gazprom Ukraine vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Gazprom Ukraine is dominated by functional specialists. It is not different from other players in the Global Business segment. Gazprom Ukraine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gazprom Ukraine to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Gazprom Ukraine, firm in the HBR case study Gazprom (C): The Ukrainian Crisis and Its Aftermath needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Gazprom (C): The Ukrainian Crisis and Its Aftermath | 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath are -
Learning at scale
– Online learning technologies has now opened space for Gazprom Ukraine 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.
Building a culture of innovation
– managers at Gazprom Ukraine 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.
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. Gazprom Ukraine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Gazprom Ukraine 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.
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 Gazprom Ukraine in the consumer business. Now Gazprom Ukraine can target international markets with far fewer capital restrictions requirements than the existing system.
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. Gazprom Ukraine can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Gazprom Ukraine 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.
Developing new processes and practices
– Gazprom Ukraine 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gazprom Ukraine is facing challenges because of the dominance of functional experts in the organization. Gazprom (C): The Ukrainian Crisis and Its Aftermath 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gazprom Ukraine 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gazprom Ukraine 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, Gazprom (C): The Ukrainian Crisis and Its Aftermath, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Gazprom Ukraine can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gazprom (C): The Ukrainian Crisis and Its Aftermath 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gazprom Ukraine 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 Gazprom Ukraine to hire the very best people irrespective of their geographical location.
Threats Gazprom (C): The Ukrainian Crisis and Its Aftermath External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gazprom (C): The Ukrainian Crisis and Its Aftermath are -
Technology acceleration in Forth Industrial Revolution
– Gazprom Ukraine has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Gazprom Ukraine 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gazprom Ukraine 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath .
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 Gazprom Ukraine business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Gazprom Ukraine 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.
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 Gazprom Ukraine.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gazprom Ukraine 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.
Stagnating economy with rate increase
– Gazprom Ukraine 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.
Regulatory challenges
– Gazprom Ukraine 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
– Gazprom Ukraine 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. Gazprom Ukraine 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.
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 Gazprom Ukraine in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Gazprom Ukraine is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gazprom (C): The Ukrainian Crisis and Its Aftermath, Gazprom Ukraine 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 .
Weighted SWOT Analysis of Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom (C): The Ukrainian Crisis and Its Aftermath 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 Gazprom Ukraine needs to make to build a sustainable competitive advantage.
