Case Study Description of Conoco's "Green" Oil Strategy (A)
Conoco faces challenges in formulating a proactive environmental strategy for its proposed oil development in Ecuador's pristine tropical rain forest region. The case outlines the innovative process in which Conoco collaborated with a wide range of often conflicting constituency groups to define and implement its policies, along with Conoco's successes and failures in reaching constituency consensus.
Authors :: Malcolm S. Salter, Joseph L. Badaracco Jr., Susan E.A. Hall
Swot Analysis of "Conoco's "Green" Oil Strategy (A)" written by Malcolm S. Salter, Joseph L. Badaracco Jr., Susan E.A. Hall includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Constituency Conoco facing as an external strategic factors. Some of the topics covered in Conoco's "Green" Oil Strategy (A) case study are - Strategic Management Strategies, Corporate governance, Decision making, Ethics, Policy, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Conoco's "Green" Oil Strategy (A) casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, wage bills are increasing, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Conoco's "Green" Oil Strategy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Conoco's "Green" Oil Strategy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Constituency Conoco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Constituency Conoco 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 Conoco's "Green" Oil Strategy (A) can be done for the following purposes –
1. Strategic planning using facts provided in Conoco's "Green" Oil Strategy (A) case study
2. Improving business portfolio management of Constituency Conoco
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 Constituency Conoco
Strengths Conoco's "Green" Oil Strategy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Constituency Conoco in Conoco's "Green" Oil Strategy (A) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Constituency Conoco 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.
Innovation driven organization
– Constituency Conoco is one of the most innovative firm in sector. Manager in Conoco's "Green" Oil Strategy (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Constituency Conoco 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 Malcolm S. Salter, Joseph L. Badaracco Jr., Susan E.A. Hall 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.
Strong track record of project management
– Constituency Conoco is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Constituency Conoco is one of the leading recruiters in the industry. Managers in the Conoco's "Green" Oil Strategy (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Constituency Conoco in the sector have low bargaining power. Conoco's "Green" Oil Strategy (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Constituency Conoco to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– Conoco's "Green" Oil Strategy (A) firm has clearly differentiated products in the market place. This has enabled Constituency Conoco to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Constituency Conoco to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Constituency Conoco has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Constituency Conoco 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.
High switching costs
– The high switching costs that Constituency Conoco 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.
High brand equity
– Constituency Conoco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Constituency Conoco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Constituency Conoco has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Conoco's "Green" Oil Strategy (A) 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.
Superior customer experience
– The customer experience strategy of Constituency Conoco in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Conoco's "Green" Oil Strategy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Conoco's "Green" Oil Strategy (A) are -
Lack of clear differentiation of Constituency Conoco products
– To increase the profitability and margins on the products, Constituency Conoco needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Conoco's "Green" Oil Strategy (A) 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 Conoco's "Green" Oil Strategy (A) can leverage the sales team experience to cultivate customer relationships as Constituency Conoco is planning to shift buying processes online.
Products dominated business model
– Even though Constituency Conoco 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 - Conoco's "Green" Oil Strategy (A) should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Constituency Conoco is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Constituency Conoco needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Constituency Conoco to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Conoco's "Green" Oil Strategy (A), it seems that the employees of Constituency Conoco 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.
Low market penetration in new markets
– Outside its home market of Constituency Conoco, firm in the HBR case study Conoco's "Green" Oil Strategy (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Constituency Conoco is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Conoco's "Green" Oil Strategy (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Conoco's "Green" Oil Strategy (A) HBR case study mentions - Constituency Conoco takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Conoco's "Green" Oil Strategy (A) 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 Constituency Conoco 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Conoco's "Green" Oil Strategy (A), is just above the industry average. Constituency Conoco 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.
No frontier risks strategy
– After analyzing the HBR case study Conoco's "Green" Oil Strategy (A), 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.
Opportunities Conoco's "Green" Oil Strategy (A) | 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 Conoco's "Green" Oil Strategy (A) are -
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. Constituency Conoco 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 Constituency Conoco 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 Constituency Conoco to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Constituency Conoco 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Constituency Conoco 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.
Buying journey improvements
– Constituency Conoco can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Conoco's "Green" Oil Strategy (A) 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.
Manufacturing automation
– Constituency Conoco can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
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. Constituency Conoco 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. Constituency Conoco 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.
Building a culture of innovation
– managers at Constituency Conoco 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 Leadership & Managing People segment.
Using analytics as competitive advantage
– Constituency Conoco 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 Conoco's "Green" Oil Strategy (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Constituency Conoco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Constituency Conoco can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Constituency Conoco 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Constituency Conoco is facing challenges because of the dominance of functional experts in the organization. Conoco's "Green" Oil Strategy (A) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Constituency Conoco 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, Conoco's "Green" Oil Strategy (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Conoco's "Green" Oil Strategy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Conoco's "Green" Oil Strategy (A) are -
Regulatory challenges
– Constituency Conoco 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.
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 Constituency Conoco in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Constituency Conoco is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Constituency Conoco business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Constituency Conoco high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Constituency Conoco.
Stagnating economy with rate increase
– Constituency Conoco 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Constituency Conoco with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Constituency Conoco in the Leadership & Managing People industry. The Leadership & Managing People 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
– Constituency Conoco has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Constituency Conoco 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.
Environmental challenges
– Constituency Conoco 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. Constituency Conoco can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Constituency Conoco
– 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 Constituency Conoco.
Weighted SWOT Analysis of Conoco's "Green" Oil Strategy (A) 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 Conoco's "Green" Oil Strategy (A) 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 Conoco's "Green" Oil Strategy (A) 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 Conoco's "Green" Oil Strategy (A) 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 Conoco's "Green" Oil Strategy (A) 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 Constituency Conoco needs to make to build a sustainable competitive advantage.
