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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, there is backlash against globalization, geopolitical disruptions, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
increasing government debt because of Covid-19 spendings, technology disruption, 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 -
Analytics focus
– Ypf Repsol 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 Michael Y. Yoshino, Carin-Isabel Knoop, Cate Reavis 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.
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.
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.
Training and development
– Ypf Repsol has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Argentina's YPF Sociedad Anonima (E): A New Era 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
– Ypf Repsol 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 Argentina's YPF Sociedad Anonima (E): A New Era HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Successful track record of launching new products
– Ypf Repsol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ypf Repsol 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.
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.
Ability to recruit top talent
– Ypf Repsol is one of the leading recruiters in the industry. Managers in the Argentina's YPF Sociedad Anonima (E): A New Era are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Ypf Repsol 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 Argentina's YPF Sociedad Anonima (E): A New Era - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era, 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era, it seems that the employees of Ypf Repsol 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Argentina's YPF Sociedad Anonima (E): A New Era, is just above the industry average. Ypf Repsol 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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael Y. Yoshino, Carin-Isabel Knoop, Cate Reavis suggests that, Ypf Repsol 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.
Need for greater diversity
– Ypf Repsol 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.
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.
Interest costs
– Compare to the competition, Ypf Repsol has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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 -
Developing new processes and practices
– Ypf Repsol 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 Ypf Repsol in the consumer business. Now Ypf Repsol can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Ypf Repsol has opened avenues for new revenue streams for the organization in the industry. This can help Ypf Repsol to build a more holistic ecosystem as suggested in the Argentina's YPF Sociedad Anonima (E): A New Era case study. Ypf Repsol can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
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.
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.
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.
Buying journey improvements
– Ypf Repsol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Argentina's YPF Sociedad Anonima (E): A New Era 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ypf Repsol is facing challenges because of the dominance of functional experts in the organization. Argentina's YPF Sociedad Anonima (E): A New Era 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.
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 -
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.
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.
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.
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. Ypf Repsol can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
Environmental challenges
– Ypf Repsol 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. Ypf Repsol can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Regulatory challenges
– Ypf Repsol needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
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 .
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.