Case Study Description of Union Carbide's Bhopal Plant (A)
In December 1984, a Union Carbide plant in Bhopal, India, sprung a leak, releasing thousands of gallons of highly toxic gas into the atmosphere. By the time the leak was sealed, over 2,000 people had died. In a series of three excerpts from published accounts, the case covers the events that led up to the tragedy and the aftermath--financial, legal, and emotional--for Union Carbide's management. The case is designed to allow students to explore the complex set of responsibilities that surround foreign direct investment. It enables them to discuss the extent to which Union Carbide's U.S.-based management was responsible for actions undertaken by Indians in India, and then to think of this responsibility in terms of its various components--financial, commercial, and moral.
Authors :: Suzanne Hull, Julia Kou, Debora L. Spar
Swot Analysis of "Union Carbide's Bhopal Plant (A)" written by Suzanne Hull, Julia Kou, Debora L. Spar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carbide's Union facing as an external strategic factors. Some of the topics covered in Union Carbide's Bhopal Plant (A) case study are - Strategic Management Strategies, Government, Personnel policies, Social responsibility, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Union Carbide's Bhopal Plant (A) casestudy better are - – wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, technology disruption,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Union Carbide's Bhopal Plant (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Union Carbide's Bhopal Plant (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carbide's Union, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carbide's Union 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 Union Carbide's Bhopal Plant (A) can be done for the following purposes –
1. Strategic planning using facts provided in Union Carbide's Bhopal Plant (A) case study
2. Improving business portfolio management of Carbide's Union
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 Carbide's Union
Strengths Union Carbide's Bhopal Plant (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carbide's Union in Union Carbide's Bhopal Plant (A) Harvard Business Review case study are -
Learning organization
- Carbide's Union 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 Carbide's Union is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Union Carbide's Bhopal Plant (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Carbide's Union has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Union Carbide's Bhopal Plant (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
– Carbide's Union has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Carbide's Union to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Global Business field
– Carbide's Union 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 Carbide's Union in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Carbide's Union 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 Suzanne Hull, Julia Kou, Debora L. Spar 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.
Operational resilience
– The operational resilience strategy in the Union Carbide's Bhopal Plant (A) 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.
Low bargaining power of suppliers
– Suppliers of Carbide's Union in the sector have low bargaining power. Union Carbide's Bhopal Plant (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Carbide's Union to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Carbide's Union in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Carbide's Union is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Carbide's Union has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Carbide's Union 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Carbide's Union digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Carbide's Union 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.
Diverse revenue streams
– Carbide's Union is present in almost all the verticals within the industry. This has provided firm in Union Carbide's Bhopal Plant (A) 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.
Weaknesses Union Carbide's Bhopal Plant (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Union Carbide's Bhopal Plant (A) are -
No frontier risks strategy
– After analyzing the HBR case study Union Carbide's Bhopal Plant (A), 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 decision making process
– As mentioned earlier in the report, Carbide's Union 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. Carbide's Union 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.
Increasing silos among functional specialists
– The organizational structure of Carbide's Union is dominated by functional specialists. It is not different from other players in the Global Business segment. Carbide's Union needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Carbide's Union to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Suzanne Hull, Julia Kou, Debora L. Spar suggests that, Carbide's Union 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
– Carbide's Union 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.
Interest costs
– Compare to the competition, Carbide's Union 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.
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 Carbide's Union supply chain. Even after few cautionary changes mentioned in the HBR case study - Union Carbide's Bhopal Plant (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Carbide's Union vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Carbide's Union 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Union Carbide's Bhopal Plant (A) 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 Carbide's Union has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carbide's Union is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Union Carbide's Bhopal Plant (A) 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 Carbide's Union products
– To increase the profitability and margins on the products, Carbide's Union needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Union Carbide's Bhopal Plant (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 Union Carbide's Bhopal Plant (A) are -
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 Carbide's Union in the consumer business. Now Carbide's Union can target international markets with far fewer capital restrictions requirements than the existing system.
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. Carbide's Union 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. Carbide's Union 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.
Using analytics as competitive advantage
– Carbide's Union 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 Union Carbide's Bhopal Plant (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carbide's Union to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Carbide's Union 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 Carbide's Union to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Carbide's Union to increase its market reach. Carbide's Union 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.
Loyalty marketing
– Carbide's Union 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.
Learning at scale
– Online learning technologies has now opened space for Carbide's Union 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.
Creating value in data economy
– The success of analytics program of Carbide's Union has opened avenues for new revenue streams for the organization in the industry. This can help Carbide's Union to build a more holistic ecosystem as suggested in the Union Carbide's Bhopal Plant (A) case study. Carbide's Union can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Carbide's Union can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Union Carbide's Bhopal Plant (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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Carbide's Union 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carbide's Union can use these opportunities to build new business models that can help the communities that Carbide's Union operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Carbide's Union 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.
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. Carbide's Union can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Union Carbide's Bhopal Plant (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Union Carbide's Bhopal Plant (A) are -
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. Carbide's Union 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
– Carbide's Union 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.
High dependence on third party suppliers
– Carbide's Union high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Carbide's Union 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 Carbide's Union
– 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 Carbide's Union.
Technology acceleration in Forth Industrial Revolution
– Carbide's Union has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Carbide's Union 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.
Shortening product life cycle
– it is one of the major threat that Carbide's Union is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Union Carbide's Bhopal Plant (A), Carbide's Union 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 .
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. Carbide's Union needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Carbide's Union in the Global Business sector and impact the bottomline of the organization.
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 Carbide's Union business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Carbide's Union 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Carbide's Union 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 Union Carbide's Bhopal Plant (A) .
Weighted SWOT Analysis of Union Carbide's Bhopal Plant (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 Union Carbide's Bhopal Plant (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 Union Carbide's Bhopal Plant (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 Union Carbide's Bhopal Plant (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 Union Carbide's Bhopal Plant (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 Carbide's Union needs to make to build a sustainable competitive advantage.
