Case Study Description of Engro Chemicals Pakistan Limited - Business Disaster Overcome
Engro Chemicals Pakistan Limited (Engro) was a very large manufacturer and marketer of fertilizer in Pakistan. It had a number of subsidiaries and joint ventures in a variety of businesses. The company was listed on the Karachi Stock Exchange (KSE) and was among the top companies as ranked by the KSE. In August 2007, the company's head office was completely destroyed by a fire. The office was located in Karachi and the fire destroyed all the equipment as well as the hardcopies of the accounting records. The company was suddenly faced with a catastrophic loss as the records were critical to Engro's day to day operations. The information technology (IT) department had developed a disaster recovery plan (DRP) in 2005 that was exclusively related to reestablishing the IT facilities after any event that could make the business systems inoperable. The company invoked the DRP as soon as the news of the complete destruction of the office facilities was received. The IT and finance staff had to use the backup equipment and data files to restart the transaction processing.The case includes a description of various business systems used by Engro and the data security processes that had enabled the company to restore the accounting and other systems needed at its head office. The main teaching objective is to focus on minimizing the business risks arising due to the destruction of the IT facilities. The case also has details of the DRP, which can be analysed as to its contents, and details of the management processes of Engro, which allows for a discussion on corporate governance within the company.
Swot Analysis of "Engro Chemicals Pakistan Limited - Business Disaster Overcome" written by Muntazar B. Ahmed includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Engro Drp facing as an external strategic factors. Some of the topics covered in Engro Chemicals Pakistan Limited - Business Disaster Overcome case study are - Strategic Management Strategies, IT, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the Engro Chemicals Pakistan Limited - Business Disaster Overcome casestudy better are - – there is backlash against globalization, geopolitical disruptions, increasing transportation and logistics costs, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Engro Chemicals Pakistan Limited - Business Disaster Overcome
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Engro Chemicals Pakistan Limited - Business Disaster Overcome case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Engro Drp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Engro Drp 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome can be done for the following purposes –
1. Strategic planning using facts provided in Engro Chemicals Pakistan Limited - Business Disaster Overcome case study
2. Improving business portfolio management of Engro Drp
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 Engro Drp
Strengths Engro Chemicals Pakistan Limited - Business Disaster Overcome | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Engro Drp in Engro Chemicals Pakistan Limited - Business Disaster Overcome Harvard Business Review case study are -
Ability to lead change in Global Business field
– Engro Drp 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 Engro Drp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Engro Chemicals Pakistan Limited - Business Disaster Overcome 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.
Training and development
– Engro Drp has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Engro Chemicals Pakistan Limited - Business Disaster Overcome 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.
Strong track record of project management
– Engro Drp is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Engro Drp in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Engro Drp 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Engro Drp 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 Muntazar B. Ahmed 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
– Engro Drp is one of the most innovative firm in sector. Manager in Engro Chemicals Pakistan Limited - Business Disaster Overcome Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Engro Drp 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 Engro Drp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Engro Chemicals Pakistan Limited - Business Disaster Overcome Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Engro Drp 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.
Organizational Resilience of Engro Drp
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Engro Drp 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 Engro Drp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Engro Drp 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.
Weaknesses Engro Chemicals Pakistan Limited - Business Disaster Overcome | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Engro Chemicals Pakistan Limited - Business Disaster Overcome are -
Skills based hiring
– The stress on hiring functional specialists at Engro Drp 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.
Products dominated business model
– Even though Engro Drp has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Engro Chemicals Pakistan Limited - Business Disaster Overcome should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Muntazar B. Ahmed suggests that, Engro Drp 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.
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 Engro Drp supply chain. Even after few cautionary changes mentioned in the HBR case study - Engro Chemicals Pakistan Limited - Business Disaster Overcome, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Engro Drp vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Engro Drp is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 cash cycle compare to competitors
Engro Drp 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Engro Drp 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.
Aligning sales with marketing
– It come across in the case study Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome can leverage the sales team experience to cultivate customer relationships as Engro Drp is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Engro Chemicals Pakistan Limited - Business Disaster Overcome, in the dynamic environment Engro Drp has struggled to respond to the nimble upstart competition. Engro Drp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Engro Drp products
– To increase the profitability and margins on the products, Engro Drp needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Engro Chemicals Pakistan Limited - Business Disaster Overcome, it seems that the employees of Engro Drp 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.
Opportunities Engro Chemicals Pakistan Limited - Business Disaster Overcome | 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome are -
Better consumer reach
– The expansion of the 5G network will help Engro Drp to increase its market reach. Engro Drp 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Engro Drp 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 Engro Drp to hire the very best people irrespective of their geographical location.
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 Engro Drp in the consumer business. Now Engro Drp can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Engro Drp can use these opportunities to build new business models that can help the communities that Engro Drp operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Engro Drp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Engro Drp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Engro Drp 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.
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. Engro Drp 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. Engro Drp 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Engro Drp is facing challenges because of the dominance of functional experts in the organization. Engro Chemicals Pakistan Limited - Business Disaster Overcome 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.
Using analytics as competitive advantage
– Engro Drp 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Engro Drp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Engro Drp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Engro Drp 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. Engro Drp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Engro Chemicals Pakistan Limited - Business Disaster Overcome External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Engro Chemicals Pakistan Limited - Business Disaster Overcome are -
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.
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 Engro Drp in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Engro Drp 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. Engro Drp can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Consumer confidence and its impact on Engro Drp 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.
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 Engro Drp business can come under increasing regulations regarding data privacy, data security, etc.
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 Engro Drp.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Engro Chemicals Pakistan Limited - Business Disaster Overcome, Engro Drp 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. Engro Drp 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. Engro Drp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Engro Drp 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Engro Drp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Engro Drp is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Engro Drp 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome .
Weighted SWOT Analysis of Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Chemicals Pakistan Limited - Business Disaster Overcome 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 Engro Drp needs to make to build a sustainable competitive advantage.