Cosan: Thinking Outside the Barrel, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cosan: Thinking Outside the Barrel, Chinese Version
To maximize their effectiveness, color cases should be printed in color.The Cosan case introduces students and executive education participants to political economy and business strategy in the biofuels industry. Cosan, based in Brazil, is the largest grower and processor of sugarcane in the world, and the largest sugar and ethanol producer in Brazil; it is also the world's largest exporter of ethanol for vehicle fuels. Rubens Ometto, Cosan's CEO, has staked out a leading position in the Brazilian ethanol and sugar industries by virtue of his efficiencies in agricultural production and in downstream logistics. He now needs to consider whether, and how aggressively, to expand abroad, either with production facilities or by exporting Brazilian output. He also needs to decide the appropriate vertical structure for the firm: whether he should be involved more extensively in agriculture, processing, distribution, or retail. The answers to these questions depend on his views of the future of the industry, and on the governmental institutions that will affect the distribution of value along the value chain.
Authors :: Forest Reinhardt, Noel Maurer, Ricardo Reisen de Pinho
Swot Analysis of "Cosan: Thinking Outside the Barrel, Chinese Version" written by Forest Reinhardt, Noel Maurer, Ricardo Reisen de Pinho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cosan Ethanol facing as an external strategic factors. Some of the topics covered in Cosan: Thinking Outside the Barrel, Chinese Version case study are - Strategic Management Strategies, Government, International business, Sustainability and Global Business.
Some of the macro environment factors that can be used to understand the Cosan: Thinking Outside the Barrel, Chinese Version casestudy better are - – increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of Cosan: Thinking Outside the Barrel, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cosan: Thinking Outside the Barrel, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cosan Ethanol, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cosan Ethanol 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 Cosan: Thinking Outside the Barrel, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Cosan: Thinking Outside the Barrel, Chinese Version case study
2. Improving business portfolio management of Cosan Ethanol
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 Cosan Ethanol
Strengths Cosan: Thinking Outside the Barrel, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cosan Ethanol in Cosan: Thinking Outside the Barrel, Chinese Version Harvard Business Review case study are -
Successful track record of launching new products
– Cosan Ethanol has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cosan Ethanol 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.
Diverse revenue streams
– Cosan Ethanol is present in almost all the verticals within the industry. This has provided firm in Cosan: Thinking Outside the Barrel, Chinese Version 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.
Sustainable margins compare to other players in Global Business industry
– Cosan: Thinking Outside the Barrel, Chinese Version firm has clearly differentiated products in the market place. This has enabled Cosan Ethanol to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Cosan Ethanol to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Cosan Ethanol is one of the leading recruiters in the industry. Managers in the Cosan: Thinking Outside the Barrel, Chinese Version 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)
– Cosan Ethanol 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 Cosan: Thinking Outside the Barrel, Chinese Version - 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
– Cosan Ethanol 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 Cosan Ethanol 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 Cosan: Thinking Outside the Barrel, Chinese Version 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.
Strong track record of project management
– Cosan Ethanol is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Cosan Ethanol 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 Forest Reinhardt, Noel Maurer, Ricardo Reisen de Pinho 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.
Learning organization
- Cosan Ethanol 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 Cosan Ethanol is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cosan: Thinking Outside the Barrel, Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Cosan Ethanol is one of the most innovative firm in sector. Manager in Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan Ethanol in the sector have low bargaining power. Cosan: Thinking Outside the Barrel, Chinese Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cosan Ethanol to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Cosan: Thinking Outside the Barrel, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cosan: Thinking Outside the Barrel, Chinese Version are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cosan Ethanol is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cosan: Thinking Outside the Barrel, Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Cosan: Thinking Outside the Barrel, Chinese Version HBR case study mentions - Cosan Ethanol 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.
Need for greater diversity
– Cosan Ethanol 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cosan: Thinking Outside the Barrel, Chinese Version, is just above the industry average. Cosan Ethanol 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Forest Reinhardt, Noel Maurer, Ricardo Reisen de Pinho suggests that, Cosan Ethanol 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 Cosan Ethanol supply chain. Even after few cautionary changes mentioned in the HBR case study - Cosan: Thinking Outside the Barrel, Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cosan Ethanol vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Cosan: Thinking Outside the Barrel, Chinese Version, 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.
Products dominated business model
– Even though Cosan Ethanol 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 - Cosan: Thinking Outside the Barrel, Chinese Version should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Cosan Ethanol 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.
Low market penetration in new markets
– Outside its home market of Cosan Ethanol, firm in the HBR case study Cosan: Thinking Outside the Barrel, Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Cosan Ethanol 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.
Opportunities Cosan: Thinking Outside the Barrel, Chinese Version | 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 Cosan: Thinking Outside the Barrel, Chinese Version are -
Manufacturing automation
– Cosan Ethanol can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Cosan Ethanol 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cosan Ethanol 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.
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. Cosan Ethanol 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. Cosan Ethanol 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.
Developing new processes and practices
– Cosan Ethanol 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cosan Ethanol can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Cosan Ethanol has opened avenues for new revenue streams for the organization in the industry. This can help Cosan Ethanol to build a more holistic ecosystem as suggested in the Cosan: Thinking Outside the Barrel, Chinese Version case study. Cosan Ethanol can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Cosan Ethanol to increase its market reach. Cosan Ethanol 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.
Buying journey improvements
– Cosan Ethanol can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cosan: Thinking Outside the Barrel, Chinese Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cosan Ethanol 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, Cosan: Thinking Outside the Barrel, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Cosan Ethanol in the consumer business. Now Cosan Ethanol can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Cosan Ethanol can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cosan Ethanol 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.
Threats Cosan: Thinking Outside the Barrel, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cosan: Thinking Outside the Barrel, Chinese Version are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cosan Ethanol 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 Cosan: Thinking Outside the Barrel, Chinese Version .
Technology acceleration in Forth Industrial Revolution
– Cosan Ethanol has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Cosan Ethanol 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.
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 Cosan Ethanol in the Global Business sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cosan: Thinking Outside the Barrel, Chinese Version, Cosan Ethanol 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cosan Ethanol with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Cosan Ethanol can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Cosan Ethanol 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.
High dependence on third party suppliers
– Cosan Ethanol high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cosan Ethanol.
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 Cosan Ethanol business can come under increasing regulations regarding data privacy, data security, 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. Cosan Ethanol 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.
Increasing wage structure of Cosan Ethanol
– 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 Cosan Ethanol.
Weighted SWOT Analysis of Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan: Thinking Outside the Barrel, Chinese Version 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 Cosan Ethanol needs to make to build a sustainable competitive advantage.