Case Study Description of Mid-Missouri Energy: Ethanol from Corn
To maximize their effectiveness, color cases should be printed in color.MME is a farmer-owned cooperative that produces ethanol from corn. The cooperative has performed well in comparison to other producers but margins in the industry had declined as industry production levels neared market demand limits. MME farmers needed to decide whether to take advantage of their success and expand through acquisitions, whether they should sell the plant, or whether they should continue current operations. MME must consider ongoing regulatory changes that impacted the industry, the possible impact of imported ethanol, the power of the petroleum industry which bought its product, and ongoing uncertainty about corn and ethanol price swings.
Authors :: Forest Reinhardt, Noel Michele Holbrook, James Weber, Karla Sartor
Swot Analysis of "Mid-Missouri Energy: Ethanol from Corn" written by Forest Reinhardt, Noel Michele Holbrook, James Weber, Karla Sartor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ethanol Corn facing as an external strategic factors. Some of the topics covered in Mid-Missouri Energy: Ethanol from Corn case study are - Strategic Management Strategies, Strategy and Global Business.
Some of the macro environment factors that can be used to understand the Mid-Missouri Energy: Ethanol from Corn casestudy better are - – increasing commodity prices, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Mid-Missouri Energy: Ethanol from Corn
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mid-Missouri Energy: Ethanol from Corn case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ethanol Corn, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn can be done for the following purposes –
1. Strategic planning using facts provided in Mid-Missouri Energy: Ethanol from Corn case study
2. Improving business portfolio management of Ethanol Corn
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 Ethanol Corn
Strengths Mid-Missouri Energy: Ethanol from Corn | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ethanol Corn in Mid-Missouri Energy: Ethanol from Corn Harvard Business Review case study are -
Innovation driven organization
– Ethanol Corn is one of the most innovative firm in sector. Manager in Mid-Missouri Energy: Ethanol from Corn Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Global Business field
– Ethanol Corn 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 Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn 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.
Superior customer experience
– The customer experience strategy of Ethanol Corn in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Ethanol Corn 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 Ethanol Corn
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ethanol Corn does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Ethanol Corn has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ethanol Corn to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Ethanol Corn is one of the leading recruiters in the industry. Managers in the Mid-Missouri Energy: Ethanol from Corn are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ethanol Corn digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ethanol Corn 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
– Ethanol Corn is present in almost all the verticals within the industry. This has provided firm in Mid-Missouri Energy: Ethanol from Corn 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.
Low bargaining power of suppliers
– Suppliers of Ethanol Corn in the sector have low bargaining power. Mid-Missouri Energy: Ethanol from Corn has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ethanol Corn to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Mid-Missouri Energy: Ethanol from Corn | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mid-Missouri Energy: Ethanol from Corn are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ethanol Corn is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mid-Missouri Energy: Ethanol from Corn can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Ethanol Corn 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.
Increasing silos among functional specialists
– The organizational structure of Ethanol Corn is dominated by functional specialists. It is not different from other players in the Global Business segment. Ethanol Corn needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ethanol Corn to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Ethanol Corn 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mid-Missouri Energy: Ethanol from Corn, it seems that the employees of Ethanol Corn 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.
Skills based hiring
– The stress on hiring functional specialists at Ethanol Corn 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Forest Reinhardt, Noel Michele Holbrook, James Weber, Karla Sartor suggests that, Ethanol Corn 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 Ethanol Corn supply chain. Even after few cautionary changes mentioned in the HBR case study - Mid-Missouri Energy: Ethanol from Corn, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ethanol Corn vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Ethanol Corn 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.
Low market penetration in new markets
– Outside its home market of Ethanol Corn, firm in the HBR case study Mid-Missouri Energy: Ethanol from Corn needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn | 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 Mid-Missouri Energy: Ethanol from Corn are -
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. Ethanol Corn can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Ethanol Corn 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. Ethanol Corn 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.
Loyalty marketing
– Ethanol Corn 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.
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. Ethanol Corn can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Ethanol Corn 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ethanol Corn 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.
Building a culture of innovation
– managers at Ethanol Corn 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ethanol Corn can use these opportunities to build new business models that can help the communities that Ethanol Corn operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Ethanol Corn can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mid-Missouri Energy: Ethanol from Corn 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.
Using analytics as competitive advantage
– Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ethanol Corn to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Ethanol Corn 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 Ethanol Corn 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ethanol Corn can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Mid-Missouri Energy: Ethanol from Corn External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mid-Missouri Energy: Ethanol from Corn are -
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 Ethanol Corn.
Stagnating economy with rate increase
– Ethanol Corn 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.
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 Ethanol Corn business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Ethanol Corn 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mid-Missouri Energy: Ethanol from Corn, Ethanol Corn 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ethanol Corn in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Ethanol Corn is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Ethanol Corn 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. Ethanol Corn can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Ethanol Corn needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ethanol Corn 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.
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. Ethanol Corn can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Ethanol Corn has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ethanol Corn 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.
Weighted SWOT Analysis of Mid-Missouri Energy: Ethanol from Corn 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 Mid-Missouri Energy: Ethanol from Corn 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 Mid-Missouri Energy: Ethanol from Corn 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 Mid-Missouri Energy: Ethanol from Corn 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 Mid-Missouri Energy: Ethanol from Corn 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 Ethanol Corn needs to make to build a sustainable competitive advantage.