Talisman Energy Inc.: The Decision to Enter Iraq SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Talisman Energy Inc.: The Decision to Enter Iraq
In June 2008, the chief executive officer of Talisman Energy Inc. (Talisman) and his senior executive team met with the company's board of directors. The purpose of this meeting was to debate Talisman's proposed entry into the oil-rich Kurdistan region of Iraq. This move was potentially very lucrative for Talisman but was fraught with risks. These risks were exacerbated by Talisman's previous foray into Sudan; during that expansion Talisman had been accused of complicity in human-rights abuses, stemming from industry-accepted royalties and fees it had paid to the government. This payment of fees was held as an example by public interest groups to allege that Talisman was indirectly funding the Sudanese civil war. Talisman's reputation had suffered to the point where the ire of investors and U.S. and Canadian governments was sufficient for Talisman to exit Sudan in 2003. There were many questions about the proposed move to Iraq, including the political situation, the views of the U.S. and Canadian government, and especially the US$220 million fee payable to the Kurdistan Regional Government. Should Talisman enter Iraq, and if so, could they avoid experiencing the same outcome as Sudan?
Swot Analysis of "Talisman Energy Inc.: The Decision to Enter Iraq" written by Pratima Bansal, Natalie Slawinski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Talisman Talisman's facing as an external strategic factors. Some of the topics covered in Talisman Energy Inc.: The Decision to Enter Iraq case study are - Strategic Management Strategies, Ethics, Government, Risk management, Social responsibility, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Talisman Energy Inc.: The Decision to Enter Iraq casestudy better are - – increasing household debt because of falling income levels, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing energy prices,
increasing commodity prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Talisman Energy Inc.: The Decision to Enter Iraq
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Talisman Energy Inc.: The Decision to Enter Iraq case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Talisman Talisman's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Talisman Talisman's 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 Talisman Energy Inc.: The Decision to Enter Iraq can be done for the following purposes –
1. Strategic planning using facts provided in Talisman Energy Inc.: The Decision to Enter Iraq case study
2. Improving business portfolio management of Talisman Talisman's
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 Talisman Talisman's
Strengths Talisman Energy Inc.: The Decision to Enter Iraq | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Talisman Talisman's in Talisman Energy Inc.: The Decision to Enter Iraq Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Talisman Talisman's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Talisman Talisman's 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 Pratima Bansal, Natalie Slawinski 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.
Highly skilled collaborators
– Talisman Talisman's 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 Talisman Energy Inc.: The Decision to Enter Iraq HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Talisman Talisman's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Talisman Talisman's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Talisman Talisman's 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.
Operational resilience
– The operational resilience strategy in the Talisman Energy Inc.: The Decision to Enter Iraq 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.
Sustainable margins compare to other players in Global Business industry
– Talisman Energy Inc.: The Decision to Enter Iraq firm has clearly differentiated products in the market place. This has enabled Talisman Talisman's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Talisman Talisman's to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Talisman Talisman's 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 Talisman Energy Inc.: The Decision to Enter Iraq - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Talisman Talisman's is one of the most innovative firm in sector. Manager in Talisman Energy Inc.: The Decision to Enter Iraq Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Talisman Talisman's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Talisman Talisman's 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.
High brand equity
– Talisman Talisman's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Talisman Talisman's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Talisman Talisman's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Talisman Energy Inc.: The Decision to Enter Iraq 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.
Weaknesses Talisman Energy Inc.: The Decision to Enter Iraq | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Talisman Energy Inc.: The Decision to Enter Iraq are -
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 Talisman Talisman's supply chain. Even after few cautionary changes mentioned in the HBR case study - Talisman Energy Inc.: The Decision to Enter Iraq, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Talisman Talisman's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Talisman Energy Inc.: The Decision to Enter Iraq, is just above the industry average. Talisman Talisman's 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.
Slow decision making process
– As mentioned earlier in the report, Talisman Talisman's 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. Talisman Talisman's 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.
Products dominated business model
– Even though Talisman Talisman's 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 - Talisman Energy Inc.: The Decision to Enter Iraq should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Talisman Talisman's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Talisman Talisman's 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.
Lack of clear differentiation of Talisman Talisman's products
– To increase the profitability and margins on the products, Talisman Talisman's needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Talisman Energy Inc.: The Decision to Enter Iraq, it seems that the employees of Talisman Talisman's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Talisman Talisman's 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.
Need for greater diversity
– Talisman Talisman's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Talisman Energy Inc.: The Decision to Enter Iraq, in the dynamic environment Talisman Talisman's has struggled to respond to the nimble upstart competition. Talisman Talisman's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Talisman Energy Inc.: The Decision to Enter Iraq | 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 Talisman Energy Inc.: The Decision to Enter Iraq are -
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. Talisman Talisman's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Talisman Talisman's 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 Talisman Talisman's 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 Talisman Talisman's to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Talisman Talisman's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Talisman Talisman's is facing challenges because of the dominance of functional experts in the organization. Talisman Energy Inc.: The Decision to Enter Iraq 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Talisman Talisman's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Talisman Talisman's can use these opportunities to build new business models that can help the communities that Talisman Talisman's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Talisman Talisman's 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 Talisman Talisman's in the consumer business. Now Talisman Talisman's can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Talisman Talisman's 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, Talisman Energy Inc.: The Decision to Enter Iraq, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Talisman Talisman's 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.
Better consumer reach
– The expansion of the 5G network will help Talisman Talisman's to increase its market reach. Talisman Talisman's 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.
Creating value in data economy
– The success of analytics program of Talisman Talisman's has opened avenues for new revenue streams for the organization in the industry. This can help Talisman Talisman's to build a more holistic ecosystem as suggested in the Talisman Energy Inc.: The Decision to Enter Iraq case study. Talisman Talisman's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Talisman Energy Inc.: The Decision to Enter Iraq External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Talisman Energy Inc.: The Decision to Enter Iraq are -
Technology acceleration in Forth Industrial Revolution
– Talisman Talisman's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Talisman Talisman's 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.
Consumer confidence and its impact on Talisman Talisman's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Talisman Talisman's 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 Talisman Energy Inc.: The Decision to Enter Iraq .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Talisman Talisman's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Talisman Talisman's 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. Talisman Talisman's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Talisman Talisman's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Talisman Talisman's.
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 Talisman Talisman's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Talisman Talisman's in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Talisman Talisman's
– 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 Talisman Talisman's.
High dependence on third party suppliers
– Talisman Talisman's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Talisman Talisman's 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.
Weighted SWOT Analysis of Talisman Energy Inc.: The Decision to Enter Iraq 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 Talisman Energy Inc.: The Decision to Enter Iraq 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 Talisman Energy Inc.: The Decision to Enter Iraq 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 Talisman Energy Inc.: The Decision to Enter Iraq 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 Talisman Energy Inc.: The Decision to Enter Iraq 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 Talisman Talisman's needs to make to build a sustainable competitive advantage.