John D. Rockefeller and the Creation of Standard Oil SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of John D. Rockefeller and the Creation of Standard Oil
Reconstructs the entrepreneurial journey of John D. Rockefeller, founder of Standard Oil and one of the most famous business figures in history. Traces his early career as a retailer in Cleveland through his decision to enter the oil industry in the early 1860s to his creation of Standard Oil. Pays particular attention to the critical decades of the 1870s and 1880s when Standard Oil and the larger oil business were growing at white-hot speed. Told through the words of both scholars and first-hand participants, examines Rockefeller's (controversial) strategy for securing and maintaining Standard Oil's market dominance, his organizational innovations within the company, and his responses to a myriad of competitive threats. Also, provides a close look at Rockefeller's life outside his office, including his role as a husband and father. Closes with a contemporary analysis of the ethics of Rockefeller's actions.
Swot Analysis of "John D. Rockefeller and the Creation of Standard Oil" written by Nancy F. Koehn, Katherine Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rockefeller's Oil facing as an external strategic factors. Some of the topics covered in John D. Rockefeller and the Creation of Standard Oil case study are - Strategic Management Strategies, Competitive strategy, Emerging markets, Ethics, Innovation, Leadership, Social enterprise and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the John D. Rockefeller and the Creation of Standard Oil casestudy better are - – increasing household debt because of falling income levels, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, technology disruption, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , there is backlash against globalization, etc
Introduction to SWOT Analysis of John D. Rockefeller and the Creation of Standard Oil
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in John D. Rockefeller and the Creation of Standard Oil case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rockefeller's Oil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rockefeller's Oil 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 John D. Rockefeller and the Creation of Standard Oil can be done for the following purposes –
1. Strategic planning using facts provided in John D. Rockefeller and the Creation of Standard Oil case study
2. Improving business portfolio management of Rockefeller's Oil
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rockefeller's Oil
Strengths John D. Rockefeller and the Creation of Standard Oil | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rockefeller's Oil in John D. Rockefeller and the Creation of Standard Oil Harvard Business Review case study are -
Training and development
– Rockefeller's Oil has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in John D. Rockefeller and the Creation of Standard Oil 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– John D. Rockefeller and the Creation of Standard Oil firm has clearly differentiated products in the market place. This has enabled Rockefeller's Oil to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Rockefeller's Oil to invest into research and development (R&D) and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Rockefeller's Oil digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rockefeller's Oil 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.
High switching costs
– The high switching costs that Rockefeller's Oil 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)
– Rockefeller's Oil 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 John D. Rockefeller and the Creation of Standard Oil - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Rockefeller's Oil 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 Rockefeller's Oil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in John D. Rockefeller and the Creation of Standard Oil Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Rockefeller's Oil 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 Nancy F. Koehn, Katherine Miller 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.
High brand equity
– Rockefeller's Oil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rockefeller's Oil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Rockefeller's Oil
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rockefeller's Oil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Innovation & Entrepreneurship field
– Rockefeller's Oil 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 Rockefeller's Oil in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Rockefeller's Oil has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in John D. Rockefeller and the Creation of Standard Oil HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Rockefeller's Oil is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses John D. Rockefeller and the Creation of Standard Oil | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of John D. Rockefeller and the Creation of Standard Oil are -
High cash cycle compare to competitors
Rockefeller's Oil 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, Rockefeller's Oil 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.
Capital Spending Reduction
– Even during the low interest decade, Rockefeller's Oil 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.
Lack of clear differentiation of Rockefeller's Oil products
– To increase the profitability and margins on the products, Rockefeller's Oil needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rockefeller's Oil is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study John D. Rockefeller and the Creation of Standard Oil can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study John D. Rockefeller and the Creation of Standard Oil, in the dynamic environment Rockefeller's Oil has struggled to respond to the nimble upstart competition. Rockefeller's Oil has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study John D. Rockefeller and the Creation of Standard Oil 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 John D. Rockefeller and the Creation of Standard Oil can leverage the sales team experience to cultivate customer relationships as Rockefeller's Oil is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Rockefeller's Oil 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, Nancy F. Koehn, Katherine Miller suggests that, Rockefeller's Oil 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.
Slow decision making process
– As mentioned earlier in the report, Rockefeller's Oil 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. Rockefeller's Oil 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.
High operating costs
– Compare to the competitors, firm in the HBR case study John D. Rockefeller and the Creation of Standard Oil 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 Rockefeller's Oil 's lucrative customers.
Opportunities John D. Rockefeller and the Creation of Standard Oil | 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 John D. Rockefeller and the Creation of Standard Oil are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rockefeller's Oil 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 Rockefeller's Oil to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Rockefeller's Oil is facing challenges because of the dominance of functional experts in the organization. John D. Rockefeller and the Creation of Standard Oil 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.
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 Rockefeller's Oil 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rockefeller's Oil 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. Rockefeller's Oil 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.
Buying journey improvements
– Rockefeller's Oil can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. John D. Rockefeller and the Creation of Standard Oil 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.
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. Rockefeller's Oil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rockefeller's Oil 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, John D. Rockefeller and the Creation of Standard Oil, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Rockefeller's Oil has opened avenues for new revenue streams for the organization in the industry. This can help Rockefeller's Oil to build a more holistic ecosystem as suggested in the John D. Rockefeller and the Creation of Standard Oil case study. Rockefeller's Oil can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rockefeller's Oil 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Rockefeller's Oil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Rockefeller's Oil 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 Innovation & Entrepreneurship segment.
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 Rockefeller's Oil in the consumer business. Now Rockefeller's Oil can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Rockefeller's Oil can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Threats John D. Rockefeller and the Creation of Standard Oil External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study John D. Rockefeller and the Creation of Standard Oil are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study John D. Rockefeller and the Creation of Standard Oil, Rockefeller's Oil may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Rockefeller's Oil business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Rockefeller's Oil 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.
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 Rockefeller's Oil.
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 Rockefeller's Oil in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Rockefeller's Oil 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 Innovation & Entrepreneurship industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Rockefeller's Oil 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 John D. Rockefeller and the Creation of Standard Oil .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rockefeller's Oil in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Technology acceleration in Forth Industrial Revolution
– Rockefeller's Oil has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Rockefeller's Oil needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Increasing wage structure of Rockefeller's Oil
– 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 Rockefeller's Oil.
Consumer confidence and its impact on Rockefeller's Oil 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.
Shortening product life cycle
– it is one of the major threat that Rockefeller's Oil is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of John D. Rockefeller and the Creation of Standard Oil 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 John D. Rockefeller and the Creation of Standard Oil 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 John D. Rockefeller and the Creation of Standard Oil 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 John D. Rockefeller and the Creation of Standard Oil 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 John D. Rockefeller and the Creation of Standard Oil 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 Rockefeller's Oil needs to make to build a sustainable competitive advantage.