Royal Dutch/Shell in Transition (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal Dutch/Shell in Transition (A)
After the Brent Spar episode and the 1995 events in Nigeria, Shell undertakes an intensive review of its values and business principles. At the same time, it conducts the largest multi-stakeholder consultation in its history in an effort to better understand society's evolving expectations for companies like Shell. Based on its findings, the company launches an effort to change its culture and embed in the organization a revised set of business principles. The company is considering whether as part of the transformation effort to begin public reporting on its environmental and social as well as its financial performance. The issue is sharpened when Shell receives a challenge from a small group of shareholders in the form of an unusual (for a British company) shareholder resolution. Recommended for use with [399126], [399127], [399129], and [310038]. Supplemented by [300040].
Swot Analysis of "Royal Dutch/Shell in Transition (A)" written by Lynn Sharp Paine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shell Effort facing as an external strategic factors. Some of the topics covered in Royal Dutch/Shell in Transition (A) case study are - Strategic Management Strategies, Corporate governance, Performance measurement, Social responsibility, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Royal Dutch/Shell in Transition (A) casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Royal Dutch/Shell in Transition (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal Dutch/Shell in Transition (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shell Effort, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shell Effort 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 Royal Dutch/Shell in Transition (A) can be done for the following purposes –
1. Strategic planning using facts provided in Royal Dutch/Shell in Transition (A) case study
2. Improving business portfolio management of Shell Effort
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 Shell Effort
Strengths Royal Dutch/Shell in Transition (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shell Effort in Royal Dutch/Shell in Transition (A) Harvard Business Review case study are -
Diverse revenue streams
– Shell Effort is present in almost all the verticals within the industry. This has provided firm in Royal Dutch/Shell in Transition (A) 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.
Training and development
– Shell Effort has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal Dutch/Shell in Transition (A) 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 lead change in Global Business field
– Shell Effort 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 Shell Effort in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Shell Effort is one of the most innovative firm in sector. Manager in Royal Dutch/Shell in Transition (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Royal Dutch/Shell in Transition (A) firm has clearly differentiated products in the market place. This has enabled Shell Effort to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Shell Effort to invest into research and development (R&D) and innovation.
High brand equity
– Shell Effort has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shell Effort to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Shell Effort 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 Lynn Sharp Paine 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.
Cross disciplinary teams
– Horizontal connected teams at the Shell Effort 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.
Highly skilled collaborators
– Shell Effort 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 Royal Dutch/Shell in Transition (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Shell Effort is one of the leading recruiters in the industry. Managers in the Royal Dutch/Shell in Transition (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Shell Effort in the sector have low bargaining power. Royal Dutch/Shell in Transition (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shell Effort to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Shell Effort digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shell Effort 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.
Weaknesses Royal Dutch/Shell in Transition (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal Dutch/Shell in Transition (A) are -
Increasing silos among functional specialists
– The organizational structure of Shell Effort is dominated by functional specialists. It is not different from other players in the Global Business segment. Shell Effort needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shell Effort to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Royal Dutch/Shell in Transition (A), in the dynamic environment Shell Effort has struggled to respond to the nimble upstart competition. Shell Effort has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shell Effort is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal Dutch/Shell in Transition (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Royal Dutch/Shell in Transition (A) 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 Shell Effort 's lucrative customers.
Products dominated business model
– Even though Shell Effort 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 - Royal Dutch/Shell in Transition (A) should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Shell Effort products
– To increase the profitability and margins on the products, Shell Effort needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Shell Effort 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. Shell Effort 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.
Aligning sales with marketing
– It come across in the case study Royal Dutch/Shell in Transition (A) 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 Royal Dutch/Shell in Transition (A) can leverage the sales team experience to cultivate customer relationships as Shell Effort is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Shell Effort, firm in the HBR case study Royal Dutch/Shell in Transition (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Shell Effort 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, Lynn Sharp Paine suggests that, Shell Effort 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.
Opportunities Royal Dutch/Shell in Transition (A) | 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 Royal Dutch/Shell in Transition (A) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shell Effort 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 Shell Effort to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shell Effort can use these opportunities to build new business models that can help the communities that Shell Effort operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Shell Effort 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 Royal Dutch/Shell in Transition (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shell Effort to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Shell Effort 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.
Developing new processes and practices
– Shell Effort 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.
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. Shell Effort can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Shell Effort 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
– Shell Effort 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.
Better consumer reach
– The expansion of the 5G network will help Shell Effort to increase its market reach. Shell Effort 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.
Buying journey improvements
– Shell Effort can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Royal Dutch/Shell in Transition (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shell Effort 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, Royal Dutch/Shell in Transition (A), 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 Shell Effort in the consumer business. Now Shell Effort can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Shell Effort 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.
Threats Royal Dutch/Shell in Transition (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal Dutch/Shell in Transition (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shell Effort with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shell Effort 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.
Regulatory challenges
– Shell Effort 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.
Consumer confidence and its impact on Shell Effort 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.
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. Shell Effort 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.
Increasing wage structure of Shell Effort
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Shell Effort.
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. Shell Effort 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shell Effort 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 Royal Dutch/Shell in Transition (A) .
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. Shell Effort needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Shell Effort 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 Shell Effort.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal Dutch/Shell in Transition (A), Shell Effort 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 Royal Dutch/Shell in Transition (A) 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 Royal Dutch/Shell in Transition (A) 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 Royal Dutch/Shell in Transition (A) 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 Royal Dutch/Shell in Transition (A) 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 Royal Dutch/Shell in Transition (A) 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 Shell Effort needs to make to build a sustainable competitive advantage.
