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, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is backlash against globalization, cloud computing is disrupting traditional business models, 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 -
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.
Analytics focus
– Ethanol Corn 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 Michele Holbrook, James Weber, Karla Sartor 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
- Ethanol Corn 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 Ethanol Corn is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mid-Missouri Energy: Ethanol from Corn Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Sustainable margins compare to other players in Global Business industry
– Mid-Missouri Energy: Ethanol from Corn firm has clearly differentiated products in the market place. This has enabled Ethanol Corn to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ethanol Corn to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Ethanol Corn has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
Strong track record of project management
– Ethanol Corn 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
– Ethanol Corn has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ethanol Corn 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.
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 -
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Ethanol Corn 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. Ethanol Corn 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mid-Missouri Energy: Ethanol from Corn, in the dynamic environment Ethanol Corn has struggled to respond to the nimble upstart competition. Ethanol Corn has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Mid-Missouri Energy: Ethanol from Corn has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ethanol Corn 's lucrative customers.
Need for greater diversity
– Ethanol Corn 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.
No frontier risks strategy
– After analyzing the HBR case study Mid-Missouri Energy: Ethanol from Corn, 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.
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.
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.
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 -
Manufacturing automation
– Ethanol Corn 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ethanol Corn is facing challenges because of the dominance of functional experts in the organization. Mid-Missouri Energy: Ethanol from Corn 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ethanol Corn 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 Ethanol Corn to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ethanol Corn 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, Mid-Missouri Energy: Ethanol from Corn, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Ethanol Corn to increase its market reach. Ethanol Corn 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ethanol Corn can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Ethanol Corn in the consumer business. Now Ethanol Corn can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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 -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ethanol Corn with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ethanol Corn 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 Mid-Missouri Energy: Ethanol from Corn .
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. Ethanol Corn will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ethanol Corn in the Global Business sector and impact the bottomline of the organization.
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.
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.
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.
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 .
High dependence on third party suppliers
– Ethanol Corn 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.
Increasing wage structure of Ethanol Corn
– 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 Ethanol Corn.
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.
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.
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.