In 1996, Unocal Corp. joined forces with the French Total company to construct an ambitious natural gas pipeline from the Andaman Sea across the southern tip of Burma and into Thailand. At an estimated cost of $1.2 billion, the pipeline was designed to bring sorely needed energy supplies into both Thailand and Burma, and to serve as a linchpin for Unocal's expanding Asian strategy. Soon after the deal is launched, however, officials from Unocal find themselves entangled with far-sweeping political forces and activist groups that span national borders. Because of its involvement with the SLORC, Burma's military leadership, Unocal is being accused of complicity in a whole series of human rights abuses, including slavery and possible genocide. Chairman John Imle must decide how to respond to these accusations, and whether Unocal needs to rethink or restructure its operations in the face of growing international pressures.
Authors :: Lane La Mure, Debora L. Spar
Topics :: Global Business
Tags :: Global strategy, Risk management, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Burma Pipeline" written by Lane La Mure, Debora L. Spar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Unocal Burma facing as an external strategic factors. Some of the topics covered in Burma Pipeline case study are - Strategic Management Strategies, Global strategy, Risk management, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Burma Pipeline casestudy better are - – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing commodity prices,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Burma Pipeline case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Unocal Burma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Unocal Burma 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 Burma Pipeline can be done for the following purposes –
1. Strategic planning using facts provided in Burma Pipeline case study
2. Improving business portfolio management of Unocal Burma
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 Unocal Burma
Strengths Burma Pipeline | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Unocal Burma in Burma Pipeline Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Unocal Burma 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.
Strong track record of project management
– Unocal Burma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Unocal Burma 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 Burma Pipeline - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Unocal Burma in the sector have low bargaining power. Burma Pipeline has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Unocal Burma to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Unocal Burma has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Burma Pipeline 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.
Diverse revenue streams
– Unocal Burma is present in almost all the verticals within the industry. This has provided firm in Burma Pipeline 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
- Unocal Burma 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 Unocal Burma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Burma Pipeline Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Unocal Burma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Unocal Burma 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.
Operational resilience
– The operational resilience strategy in the Burma Pipeline 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.
Ability to recruit top talent
– Unocal Burma is one of the leading recruiters in the industry. Managers in the Burma Pipeline are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Unocal Burma has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Global Business field
– Unocal Burma 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 Unocal Burma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Burma Pipeline | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Burma Pipeline are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Burma Pipeline 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 Unocal Burma has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Burma Pipeline 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 Unocal Burma 's lucrative customers.
Need for greater diversity
– Unocal Burma 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.
Aligning sales with marketing
– It come across in the case study Burma Pipeline 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 Burma Pipeline can leverage the sales team experience to cultivate customer relationships as Unocal Burma is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Unocal Burma is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Burma Pipeline 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 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 Unocal Burma supply chain. Even after few cautionary changes mentioned in the HBR case study - Burma Pipeline, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Unocal Burma vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Unocal Burma, firm in the HBR case study Burma Pipeline needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Unocal Burma products
– To increase the profitability and margins on the products, Unocal Burma needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Unocal Burma 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Burma Pipeline, is just above the industry average. Unocal Burma needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Unocal Burma is dominated by functional specialists. It is not different from other players in the Global Business segment. Unocal Burma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Unocal Burma to focus more on services rather than just following the product oriented approach.
Opportunities Burma Pipeline | 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 Burma Pipeline are -
Leveraging digital technologies
– Unocal Burma 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Unocal Burma can use these opportunities to build new business models that can help the communities that Unocal Burma operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Unocal Burma 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.
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 Unocal Burma in the consumer business. Now Unocal Burma can target international markets with far fewer capital restrictions requirements than the existing system.
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. Unocal Burma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Unocal Burma 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, Burma Pipeline, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Unocal Burma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Unocal Burma can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Burma Pipeline 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, Unocal Burma 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.
Creating value in data economy
– The success of analytics program of Unocal Burma has opened avenues for new revenue streams for the organization in the industry. This can help Unocal Burma to build a more holistic ecosystem as suggested in the Burma Pipeline case study. Unocal Burma can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Unocal Burma 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.
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 Unocal Burma 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.
Loyalty marketing
– Unocal Burma 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 Burma Pipeline External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Burma Pipeline 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. Unocal Burma 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Unocal Burma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Unocal Burma.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Burma Pipeline, Unocal Burma 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Unocal Burma 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 Burma Pipeline .
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 Unocal Burma in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Unocal Burma
– 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 Unocal Burma.
Stagnating economy with rate increase
– Unocal Burma 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.
High dependence on third party suppliers
– Unocal Burma 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.
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.
Consumer confidence and its impact on Unocal Burma 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.
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.
Technology acceleration in Forth Industrial Revolution
– Unocal Burma has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Unocal Burma 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.
Weighted SWOT Analysis of Burma Pipeline 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 Burma Pipeline 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 Burma Pipeline 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 Burma Pipeline 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 Burma Pipeline 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 Unocal Burma needs to make to build a sustainable competitive advantage.