Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands
The chief executive officer of an oil and gas company must decide whether he wants to invest heavily in reducing greenhouse gases. Specifically, Suncor Energy must evaluate whether it should invest $425 million in carbon capture and storage or wait until there is greater certainty in the political, social and business environment. The case will help students develop skills of analyzing business decisions under higher environmental uncertainty, especially when the outcome is a long-term goal. Further, the issues presented in the case open up discussions about climate change and the interaction between business actions and societal expectations. There is also an opportunity to speak about the interaction between business and public policy.
Swot Analysis of "Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands" written by Pratima Bansal, Jijun Gao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suncor Interaction facing as an external strategic factors. Some of the topics covered in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands case study are - Strategic Management Strategies, Financial analysis, Financial management, Government, International business, Managing uncertainty, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands casestudy better are - – cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suncor Interaction, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suncor Interaction 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands can be done for the following purposes –
1. Strategic planning using facts provided in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands case study
2. Improving business portfolio management of Suncor Interaction
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suncor Interaction
Strengths Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suncor Interaction in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands Harvard Business Review case study are -
Training and development
– Suncor Interaction has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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.
Analytics focus
– Suncor Interaction 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 Pratima Bansal, Jijun Gao 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.
Effective Research and Development (R&D)
– Suncor Interaction 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands - 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
– Suncor Interaction has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suncor Interaction to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Suncor Interaction 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Suncor Interaction digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suncor Interaction 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.
Operational resilience
– The operational resilience strategy in the Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands firm has clearly differentiated products in the market place. This has enabled Suncor Interaction to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Suncor Interaction to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Suncor Interaction has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suncor Interaction 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.
Strong track record of project management
– Suncor Interaction is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Suncor Interaction 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.
Diverse revenue streams
– Suncor Interaction is present in almost all the verticals within the industry. This has provided firm in Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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.
Weaknesses Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands are -
Slow decision making process
– As mentioned earlier in the report, Suncor Interaction 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. Suncor Interaction 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands, it seems that the employees of Suncor Interaction 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.
High cash cycle compare to competitors
Suncor Interaction 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands, is just above the industry average. Suncor Interaction 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.
Capital Spending Reduction
– Even during the low interest decade, Suncor Interaction 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.
Aligning sales with marketing
– It come across in the case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands can leverage the sales team experience to cultivate customer relationships as Suncor Interaction is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 Suncor Interaction 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 - Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Suncor Interaction 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.
Skills based hiring
– The stress on hiring functional specialists at Suncor Interaction 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.
Increasing silos among functional specialists
– The organizational structure of Suncor Interaction is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Suncor Interaction needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Suncor Interaction to focus more on services rather than just following the product oriented approach.
Opportunities Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands | 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Suncor Interaction can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Suncor Interaction can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Suncor Interaction in the consumer business. Now Suncor Interaction can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Suncor Interaction 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Suncor Interaction 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, Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Suncor Interaction can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Suncor Interaction 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.
Leveraging digital technologies
– Suncor Interaction 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.
Using analytics as competitive advantage
– Suncor Interaction 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Suncor Interaction to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Suncor Interaction can develop new processes and procedures in Leadership & Managing People 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suncor Interaction 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. Suncor Interaction 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
– Suncor Interaction 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suncor Interaction can use these opportunities to build new business models that can help the communities that Suncor Interaction operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands are -
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 Suncor Interaction business can come under increasing regulations regarding data privacy, data security, etc.
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 Suncor Interaction in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Suncor Interaction needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands, Suncor Interaction may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suncor Interaction 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands .
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. Suncor Interaction 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.
Environmental challenges
– Suncor Interaction 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. Suncor Interaction can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Suncor Interaction has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Suncor Interaction needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Regulatory challenges
– Suncor Interaction 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 Leadership & Managing People industry regulations.
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.
Consumer confidence and its impact on Suncor Interaction 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.
Increasing wage structure of Suncor Interaction
– 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 Suncor Interaction.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suncor Interaction can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Adapting to Climate Change: The Case of Suncor Energy and the Alberta Oil Sands 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 Suncor Interaction needs to make to build a sustainable competitive advantage.