Case Study Description of Creating Global Oil, 1900-1935
Taught in the elective MBA course entitled The Evolution of Global Business. Examines the development of an international cartel in the oil industry in the 1920s and 1930s. Focuses on the decisions and actions of the leading multinational oil companies--particularly Standard Oil of New Jersey, Royal Dutch/Shell, and Anglo-Persian (BP)--in acting together to try to stabilize prices and market shares beginning in the late 1920s through the Achnacarry or "As-is" Agreement. Set against the backdrop of the development of the global oil industry, it examines the causes of the change in firm strategy from competition to cooperation and offers an opportunity for readers to assess the success of efforts at inter-firm coordination and stabilization. Also explores the personal and professional relationships between the leading oil-industry executives who forged the cartel, including Henry Deterding, Walter Teagle, and John Cadman. Important subissues include the changing nature of the oil industry in the 1910s and 1920s, the rise of oil diplomacy, and the impact of U.S. antitrust laws on the global oil business.
Swot Analysis of "Creating Global Oil, 1900-1935" written by Geoffrey G. Jones, R. Daniel Wadhwani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oil 1920s facing as an external strategic factors. Some of the topics covered in Creating Global Oil, 1900-1935 case study are - Strategic Management Strategies, Business law, Collaboration, Competition, Economics, Entrepreneurship, Globalization, Government, Joint ventures and Global Business.
Some of the macro environment factors that can be used to understand the Creating Global Oil, 1900-1935 casestudy better are - – geopolitical disruptions, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Creating Global Oil, 1900-1935
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Creating Global Oil, 1900-1935 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oil 1920s, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oil 1920s 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 Creating Global Oil, 1900-1935 can be done for the following purposes –
1. Strategic planning using facts provided in Creating Global Oil, 1900-1935 case study
2. Improving business portfolio management of Oil 1920s
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 Oil 1920s
Strengths Creating Global Oil, 1900-1935 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oil 1920s in Creating Global Oil, 1900-1935 Harvard Business Review case study are -
Effective Research and Development (R&D)
– Oil 1920s 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 Creating Global Oil, 1900-1935 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Oil 1920s in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Oil 1920s 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.
Low bargaining power of suppliers
– Suppliers of Oil 1920s in the sector have low bargaining power. Creating Global Oil, 1900-1935 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oil 1920s to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Oil 1920s has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oil 1920s 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.
Analytics focus
– Oil 1920s 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 Geoffrey G. Jones, R. Daniel Wadhwani 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.
Ability to recruit top talent
– Oil 1920s is one of the leading recruiters in the industry. Managers in the Creating Global Oil, 1900-1935 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Creating Global Oil, 1900-1935 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.
Innovation driven organization
– Oil 1920s is one of the most innovative firm in sector. Manager in Creating Global Oil, 1900-1935 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Oil 1920s
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oil 1920s does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Oil 1920s is present in almost all the verticals within the industry. This has provided firm in Creating Global Oil, 1900-1935 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.
Strong track record of project management
– Oil 1920s is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Creating Global Oil, 1900-1935 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Creating Global Oil, 1900-1935 are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Creating Global Oil, 1900-1935, is just above the industry average. Oil 1920s 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oil 1920s is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Creating Global Oil, 1900-1935 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Oil 1920s, firm in the HBR case study Creating Global Oil, 1900-1935 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Oil 1920s 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Creating Global Oil, 1900-1935 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 Oil 1920s has relatively successful track record of launching new products.
Products dominated business model
– Even though Oil 1920s 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 - Creating Global Oil, 1900-1935 should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Geoffrey G. Jones, R. Daniel Wadhwani suggests that, Oil 1920s 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Creating Global Oil, 1900-1935, it seems that the employees of Oil 1920s 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.
No frontier risks strategy
– After analyzing the HBR case study Creating Global Oil, 1900-1935, 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.
Increasing silos among functional specialists
– The organizational structure of Oil 1920s is dominated by functional specialists. It is not different from other players in the Global Business segment. Oil 1920s needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oil 1920s to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Oil 1920s 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. Oil 1920s 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 Creating Global Oil, 1900-1935 | 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 Creating Global Oil, 1900-1935 are -
Creating value in data economy
– The success of analytics program of Oil 1920s has opened avenues for new revenue streams for the organization in the industry. This can help Oil 1920s to build a more holistic ecosystem as suggested in the Creating Global Oil, 1900-1935 case study. Oil 1920s can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Oil 1920s can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Creating Global Oil, 1900-1935 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.
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. Oil 1920s can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Oil 1920s 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.
Learning at scale
– Online learning technologies has now opened space for Oil 1920s 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oil 1920s 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 Oil 1920s to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oil 1920s 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.
Using analytics as competitive advantage
– Oil 1920s 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 Creating Global Oil, 1900-1935 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oil 1920s to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oil 1920s 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, Creating Global Oil, 1900-1935, 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
– Oil 1920s 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oil 1920s 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.
Better consumer reach
– The expansion of the 5G network will help Oil 1920s to increase its market reach. Oil 1920s 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.
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. Oil 1920s can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Creating Global Oil, 1900-1935 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Creating Global Oil, 1900-1935 are -
Consumer confidence and its impact on Oil 1920s 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.
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. Oil 1920s 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.
High dependence on third party suppliers
– Oil 1920s 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.
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. Oil 1920s needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Oil 1920s has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Oil 1920s needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oil 1920s 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 Creating Global Oil, 1900-1935 .
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 Oil 1920s business can come under increasing regulations regarding data privacy, data security, etc.
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. Oil 1920s can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oil 1920s 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 Oil 1920s.
Environmental challenges
– Oil 1920s 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. Oil 1920s can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Creating Global Oil, 1900-1935, Oil 1920s 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 Creating Global Oil, 1900-1935 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 Creating Global Oil, 1900-1935 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 Creating Global Oil, 1900-1935 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 Creating Global Oil, 1900-1935 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 Creating Global Oil, 1900-1935 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 Oil 1920s needs to make to build a sustainable competitive advantage.
