Negotiation Exercise on Tradeable Pollution Allowances: General Background Information SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Negotiation Exercise on Tradeable Pollution Allowances: General Background Information
Designed to teach students about the trade-offs faced by firms exploring alternative approaches to complying with pollution control regulations. The setting is the U.S. electric utility industry in 1993. In accordance with the provisions of the 1990 Clean Air Act, coal-burning utilities must lower their emissions of SO2 (sulfur dioxide) significantly by 1995, and then reduce their emissions by an additional 50% by the year 2000. In this stylized negotiation each utility has the option of complying with the regulations through one of three methods: 1) by installing pollution control equipment ("scrubbers"); 2) by substituting high-sulfur coal; and/or 3) by purchasing tradeable SO2 allowances from other firms that overcomply with the emission control legislation. Not only must each utility reduce its emissions by a different amount, but the costs faced by each firm with respect to scrubbing and fuel switching differ as well. Also, assumptions relating to the state regulatory environment differ across negotiating groups. Negotiations take place in groups of four utilities, and separate scenarios are available for three distinct groups. (See Supplements.)
Swot Analysis of "Negotiation Exercise on Tradeable Pollution Allowances: General Background Information" written by Willis Emmons includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that So2 Pollution facing as an external strategic factors. Some of the topics covered in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information case study are - Strategic Management Strategies, Negotiations, Regulation, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Negotiation Exercise on Tradeable Pollution Allowances: General Background Information casestudy better are - – technology disruption, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing commodity prices, there is increasing trade war between United States & China,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Negotiation Exercise on Tradeable Pollution Allowances: General Background Information
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the So2 Pollution, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which So2 Pollution 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information can be done for the following purposes –
1. Strategic planning using facts provided in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information case study
2. Improving business portfolio management of So2 Pollution
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 So2 Pollution
Strengths Negotiation Exercise on Tradeable Pollution Allowances: General Background Information | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of So2 Pollution in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information Harvard Business Review case study are -
Training and development
– So2 Pollution has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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.
Highly skilled collaborators
– So2 Pollution 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– So2 Pollution is present in almost all the verticals within the industry. This has provided firm in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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.
High brand equity
– So2 Pollution has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled So2 Pollution to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of So2 Pollution in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of So2 Pollution in the sector have low bargaining power. Negotiation Exercise on Tradeable Pollution Allowances: General Background Information has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps So2 Pollution to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the So2 Pollution 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.
Ability to recruit top talent
– So2 Pollution is one of the leading recruiters in the industry. Managers in the Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 So2 Pollution 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.
Learning organization
- So2 Pollution 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 So2 Pollution is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Negotiation Exercise on Tradeable Pollution Allowances: General Background Information Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– So2 Pollution 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 So2 Pollution in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– So2 Pollution has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. So2 Pollution 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.
Weaknesses Negotiation Exercise on Tradeable Pollution Allowances: General Background Information | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Negotiation Exercise on Tradeable Pollution Allowances: General Background Information are -
Products dominated business model
– Even though So2 Pollution 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 - Negotiation Exercise on Tradeable Pollution Allowances: General Background Information should strive to include more intangible value offerings along with its core products and services.
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 So2 Pollution supply chain. Even after few cautionary changes mentioned in the HBR case study - Negotiation Exercise on Tradeable Pollution Allowances: General Background Information, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left So2 Pollution vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, So2 Pollution is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 So2 Pollution 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 So2 Pollution has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Willis Emmons suggests that, So2 Pollution 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.
No frontier risks strategy
– After analyzing the HBR case study Negotiation Exercise on Tradeable Pollution Allowances: General Background Information, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
So2 Pollution 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.
Need for greater diversity
– So2 Pollution 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.
Skills based hiring
– The stress on hiring functional specialists at So2 Pollution 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 decision making process
– As mentioned earlier in the report, So2 Pollution 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. So2 Pollution 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.
Opportunities Negotiation Exercise on Tradeable Pollution Allowances: General Background Information | 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information are -
Buying journey improvements
– So2 Pollution can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Negotiation Exercise on Tradeable Pollution Allowances: General Background Information suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help So2 Pollution 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.
Manufacturing automation
– So2 Pollution 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for So2 Pollution 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.
Leveraging digital technologies
– So2 Pollution 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, So2 Pollution is facing challenges because of the dominance of functional experts in the organization. Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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.
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. So2 Pollution 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, So2 Pollution 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, Negotiation Exercise on Tradeable Pollution Allowances: General Background Information, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for So2 Pollution 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.
Developing new processes and practices
– So2 Pollution 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, So2 Pollution can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– So2 Pollution 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.
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 So2 Pollution in the consumer business. Now So2 Pollution can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Negotiation Exercise on Tradeable Pollution Allowances: General Background Information External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Negotiation Exercise on Tradeable Pollution Allowances: General Background Information are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for So2 Pollution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Negotiation Exercise on Tradeable Pollution Allowances: General Background Information, So2 Pollution 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents So2 Pollution with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– So2 Pollution 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 So2 Pollution.
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. So2 Pollution needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of So2 Pollution
– 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 So2 Pollution.
High dependence on third party suppliers
– So2 Pollution 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.
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. So2 Pollution can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– So2 Pollution has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, So2 Pollution 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.
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.
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.
Environmental challenges
– So2 Pollution 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. So2 Pollution can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 Negotiation Exercise on Tradeable Pollution Allowances: General Background Information 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 So2 Pollution needs to make to build a sustainable competitive advantage.
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