International Lobbying and The Dow Chemical Company (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of International Lobbying and The Dow Chemical Company (A)
This case explores company strategy, business-government relations, and collective action challenges associated with international and domestic lobbying regarding regulation of the chemical industry. In the fall of 2006, a five-year legislative process for a major new law regulating chemicals in the European Union appeared to be nearing its conclusion. REACH, the Registration, Evaluation, Authorization, and Restriction of Chemicals, would create a new European Chemicals Agency, require companies to submit testing data on existing and new compounds, and restrict the manufacture of hazardous substances. Andrew Liveris, CEO of the Dow Chemical Company, has to decide whether the company should engage in direct discussions with the European Parliament and Commission, with the implication that the company can influence the regulations but also would have to support the final outcome. The case summarizes Dow's history, competitive dynamics in the sector, and regulation of the chemical industry before describing the REACH legislative process and various approaches to lobbying used by chemical companies, trade groups, and environmental NGOs.
Authors :: Arthur A. Daemmrich
Topics :: Global Business
Tags :: International business, Product development, Public relations, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "International Lobbying and The Dow Chemical Company (A)" written by Arthur A. Daemmrich includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chemical Lobbying facing as an external strategic factors. Some of the topics covered in International Lobbying and The Dow Chemical Company (A) case study are - Strategic Management Strategies, International business, Product development, Public relations and Global Business.
Some of the macro environment factors that can be used to understand the International Lobbying and The Dow Chemical Company (A) casestudy better are - – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, geopolitical disruptions, increasing household debt because of falling income levels,
increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of International Lobbying and The Dow Chemical Company (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in International Lobbying and The Dow Chemical Company (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chemical Lobbying, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A) can be done for the following purposes –
1. Strategic planning using facts provided in International Lobbying and The Dow Chemical Company (A) case study
2. Improving business portfolio management of Chemical Lobbying
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 Chemical Lobbying
Strengths International Lobbying and The Dow Chemical Company (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chemical Lobbying in International Lobbying and The Dow Chemical Company (A) Harvard Business Review case study are -
Strong track record of project management
– Chemical Lobbying is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Global Business field
– Chemical Lobbying 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 Chemical Lobbying in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Chemical Lobbying has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in International Lobbying and The Dow Chemical Company (A) 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.
High brand equity
– Chemical Lobbying has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chemical Lobbying to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Chemical Lobbying in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Chemical Lobbying
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chemical Lobbying does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Chemical Lobbying is one of the most innovative firm in sector. Manager in International Lobbying and The Dow Chemical Company (A) 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 Chemical Lobbying in the sector have low bargaining power. International Lobbying and The Dow Chemical Company (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chemical Lobbying to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Chemical Lobbying 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 Arthur A. Daemmrich 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.
High switching costs
– The high switching costs that Chemical Lobbying 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.
Sustainable margins compare to other players in Global Business industry
– International Lobbying and The Dow Chemical Company (A) firm has clearly differentiated products in the market place. This has enabled Chemical Lobbying to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Chemical Lobbying to invest into research and development (R&D) and innovation.
Weaknesses International Lobbying and The Dow Chemical Company (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of International Lobbying and The Dow Chemical Company (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study International Lobbying and The Dow Chemical Company (A), it seems that the employees of Chemical Lobbying 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.
Slow to strategic competitive environment developments
– As International Lobbying and The Dow Chemical Company (A) HBR case study mentions - Chemical Lobbying 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study International Lobbying and The Dow Chemical Company (A), in the dynamic environment Chemical Lobbying has struggled to respond to the nimble upstart competition. Chemical Lobbying has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Chemical Lobbying 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.
Lack of clear differentiation of Chemical Lobbying products
– To increase the profitability and margins on the products, Chemical Lobbying 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, Chemical Lobbying 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.
Capital Spending Reduction
– Even during the low interest decade, Chemical Lobbying 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 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 Chemical Lobbying supply chain. Even after few cautionary changes mentioned in the HBR case study - International Lobbying and The Dow Chemical Company (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chemical Lobbying vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study International Lobbying and The Dow Chemical Company (A), is just above the industry average. Chemical Lobbying 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.
Aligning sales with marketing
– It come across in the case study International Lobbying and The Dow Chemical Company (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case International Lobbying and The Dow Chemical Company (A) can leverage the sales team experience to cultivate customer relationships as Chemical Lobbying is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Chemical Lobbying 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.
Opportunities International Lobbying and The Dow Chemical Company (A) | 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 International Lobbying and The Dow Chemical Company (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chemical Lobbying can use these opportunities to build new business models that can help the communities that Chemical Lobbying operates in. Secondly it can use opportunities from government spending in Global Business sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chemical Lobbying can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Chemical Lobbying can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chemical Lobbying 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 Chemical Lobbying to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Chemical Lobbying 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.
Using analytics as competitive advantage
– Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chemical Lobbying to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Chemical Lobbying 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.
Buying journey improvements
– Chemical Lobbying can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. International Lobbying and The Dow Chemical Company (A) 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 Chemical Lobbying 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.
Learning at scale
– Online learning technologies has now opened space for Chemical Lobbying 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.
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. Chemical Lobbying can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Chemical Lobbying can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chemical Lobbying is facing challenges because of the dominance of functional experts in the organization. International Lobbying and The Dow Chemical Company (A) 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.
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 Chemical Lobbying in the consumer business. Now Chemical Lobbying can target international markets with far fewer capital restrictions requirements than the existing system.
Threats International Lobbying and The Dow Chemical Company (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study International Lobbying and The Dow Chemical Company (A) are -
Shortening product life cycle
– it is one of the major threat that Chemical Lobbying is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Chemical Lobbying 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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Chemical Lobbying in the Global Business sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Chemical Lobbying has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Chemical Lobbying 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.
Consumer confidence and its impact on Chemical Lobbying 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.
High dependence on third party suppliers
– Chemical Lobbying 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.
Stagnating economy with rate increase
– Chemical Lobbying 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.
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. Chemical Lobbying can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A) .
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 Chemical Lobbying.
Regulatory challenges
– Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A), Chemical Lobbying 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 International Lobbying and The Dow Chemical Company (A) 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 International Lobbying and The Dow Chemical Company (A) 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 International Lobbying and The Dow Chemical Company (A) 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 International Lobbying and The Dow Chemical Company (A) 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 International Lobbying and The Dow Chemical Company (A) 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 Chemical Lobbying needs to make to build a sustainable competitive advantage.