Argentina's YPF Sociedad Anonima (E): A New Era SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Argentina's YPF Sociedad Anonima (E): A New Era
In June 1999, Spain's former state-owned oil giant Repsol, acquired 97% of YPF, despite opposition from YPF management. The case describes the status of the two companies at the time of the acquisition and highlights concerns expressed by industry analysts on the deal.
Authors :: Michael Y. Yoshino, Carin-Isabel Knoop, Cate Reavis
Swot Analysis of "Argentina's YPF Sociedad Anonima (E): A New Era" written by Michael Y. Yoshino, Carin-Isabel Knoop, Cate Reavis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ypf Repsol facing as an external strategic factors. Some of the topics covered in Argentina's YPF Sociedad Anonima (E): A New Era case study are - Strategic Management Strategies, Economy, Globalization, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Argentina's YPF Sociedad Anonima (E): A New Era casestudy better are - – increasing energy prices, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Argentina's YPF Sociedad Anonima (E): A New Era
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Argentina's YPF Sociedad Anonima (E): A New Era case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ypf Repsol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ypf Repsol 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 Argentina's YPF Sociedad Anonima (E): A New Era can be done for the following purposes –
1. Strategic planning using facts provided in Argentina's YPF Sociedad Anonima (E): A New Era case study
2. Improving business portfolio management of Ypf Repsol
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 Ypf Repsol
Strengths Argentina's YPF Sociedad Anonima (E): A New Era | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ypf Repsol in Argentina's YPF Sociedad Anonima (E): A New Era Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Argentina's YPF Sociedad Anonima (E): A New Era 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
– Ypf Repsol is one of the most innovative firm in sector. Manager in Argentina's YPF Sociedad Anonima (E): A New Era Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Ypf Repsol is present in almost all the verticals within the industry. This has provided firm in Argentina's YPF Sociedad Anonima (E): A New Era 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.
Organizational Resilience of Ypf Repsol
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ypf Repsol does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ypf Repsol digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ypf Repsol 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.
High brand equity
– Ypf Repsol has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ypf Repsol to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Ypf Repsol 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 Ypf Repsol is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Argentina's YPF Sociedad Anonima (E): A New Era Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Ypf Repsol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Ypf Repsol 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.
Low bargaining power of suppliers
– Suppliers of Ypf Repsol in the sector have low bargaining power. Argentina's YPF Sociedad Anonima (E): A New Era has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ypf Repsol to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Ypf Repsol 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 Ypf Repsol in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Ypf Repsol 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.
Weaknesses Argentina's YPF Sociedad Anonima (E): A New Era | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Argentina's YPF Sociedad Anonima (E): A New Era are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Argentina's YPF Sociedad Anonima (E): A New Era, in the dynamic environment Ypf Repsol has struggled to respond to the nimble upstart competition. Ypf Repsol has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ypf Repsol is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Argentina's YPF Sociedad Anonima (E): A New Era can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Ypf Repsol products
– To increase the profitability and margins on the products, Ypf Repsol needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Ypf Repsol needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Argentina's YPF Sociedad Anonima (E): A New Era 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 Ypf Repsol has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Argentina's YPF Sociedad Anonima (E): A New Era HBR case study mentions - Ypf Repsol takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Ypf Repsol, firm in the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Ypf Repsol 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 cash cycle compare to competitors
Ypf Repsol 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.
Capital Spending Reduction
– Even during the low interest decade, Ypf Repsol 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era 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 Ypf Repsol 's lucrative customers.
Opportunities Argentina's YPF Sociedad Anonima (E): A New Era | 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 Argentina's YPF Sociedad Anonima (E): A New Era are -
Learning at scale
– Online learning technologies has now opened space for Ypf Repsol 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ypf Repsol 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.
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. Ypf Repsol can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Ypf Repsol 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.
Leveraging digital technologies
– Ypf Repsol 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.
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 Ypf Repsol 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.
Better consumer reach
– The expansion of the 5G network will help Ypf Repsol to increase its market reach. Ypf Repsol 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ypf Repsol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Ypf Repsol 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ypf Repsol 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 Ypf Repsol to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ypf Repsol can use these opportunities to build new business models that can help the communities that Ypf Repsol operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ypf Repsol 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ypf Repsol 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, Argentina's YPF Sociedad Anonima (E): A New Era, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Argentina's YPF Sociedad Anonima (E): A New Era External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era are -
Increasing wage structure of Ypf Repsol
– 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 Ypf Repsol.
High dependence on third party suppliers
– Ypf Repsol high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ypf Repsol.
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. Ypf Repsol needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ypf Repsol 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.
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 Argentina's YPF Sociedad Anonima (E): A New Era, Ypf Repsol 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 .
Consumer confidence and its impact on Ypf Repsol 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.
Stagnating economy with rate increase
– Ypf Repsol 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ypf Repsol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ypf Repsol 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 Argentina's YPF Sociedad Anonima (E): A New Era .
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. Ypf Repsol 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.
Shortening product life cycle
– it is one of the major threat that Ypf Repsol is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Argentina's YPF Sociedad Anonima (E): A New Era 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 Argentina's YPF Sociedad Anonima (E): A New Era 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 Argentina's YPF Sociedad Anonima (E): A New Era 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 Argentina's YPF Sociedad Anonima (E): A New Era 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 Argentina's YPF Sociedad Anonima (E): A New Era 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 Ypf Repsol needs to make to build a sustainable competitive advantage.
