Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom
This strategy case describes an initiative in the Western Cape province of South Africa to capitalize on an oil boom off the western coast of Africa by cultivating an industrial "cluster" of complementary businesses with the capacity to service, repair, and build components for oil and gas drilling vessels and equipment. The first half of the case lays out the initial thinking, planning, and strategizing. It includes the motive for launching the initiative, reasons to think the Western Cape was well-positioned to make a success of it, and anticipated obstacles. The second half summarizes the first ten years of the initiative, in which a string of difficulties-some foreseen, some not-severely limits the initiative's progress. This includes a shift in priorities in the National Ports Authority, a problematic deal for making port infrastructure improvements, and some features of local corporate culture. The case ends with reflections from two of the initiative's biggest advocates, predicting that new political developments and a possible shift in strategic approach will allow the effort better success in the coming years. Case Number 2002.0
Swot Analysis of "Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom" written by Ricardo Hausmann, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cape Western facing as an external strategic factors. Some of the topics covered in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom case study are - Strategic Management Strategies, International business and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cape Western, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cape Western 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom can be done for the following purposes –
1. Strategic planning using facts provided in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom case study
2. Improving business portfolio management of Cape Western
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 Cape Western
Strengths Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cape Western in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom firm has clearly differentiated products in the market place. This has enabled Cape Western to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Cape Western to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Cape Western 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.
Effective Research and Development (R&D)
– Cape Western 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom - 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
- Cape Western 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 Cape Western is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Cape Western is one of the leading recruiters in the industry. Managers in the Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Cape Western in the sector have low bargaining power. Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cape Western to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Cape Western 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Cape Western is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Cape Western 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 Ricardo Hausmann, Pamela Varley 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.
Diverse revenue streams
– Cape Western is present in almost all the verticals within the industry. This has provided firm in Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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.
Organizational Resilience of Cape Western
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cape Western does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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.
Weaknesses Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom are -
Increasing silos among functional specialists
– The organizational structure of Cape Western is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Cape Western needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cape Western to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Cape Western 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.
Products dominated business model
– Even though Cape Western 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 - Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom, is just above the industry average. Cape Western 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Cape Western 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom can leverage the sales team experience to cultivate customer relationships as Cape Western is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom HBR case study mentions - Cape Western 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom, it seems that the employees of Cape Western 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cape Western has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Cape Western 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cape Western is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom | 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cape Western in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Manufacturing automation
– Cape Western 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.
Better consumer reach
– The expansion of the 5G network will help Cape Western to increase its market reach. Cape Western 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.
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 Cape Western in the consumer business. Now Cape Western can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cape Western 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.
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. Cape Western 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. Cape Western 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.
Using analytics as competitive advantage
– Cape Western 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cape Western to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Cape Western can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cape Western is facing challenges because of the dominance of functional experts in the organization. Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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.
Loyalty marketing
– Cape Western 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.
Building a culture of innovation
– managers at Cape Western 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.
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. Cape Western can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Cape Western 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.
Threats Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom are -
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. Cape Western can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Cape Western 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.
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.
Technology acceleration in Forth Industrial Revolution
– Cape Western has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Cape Western 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.
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. Cape Western 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.
High dependence on third party suppliers
– Cape Western 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 Cape Western
– 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 Cape Western.
Regulatory challenges
– Cape Western 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.
Consumer confidence and its impact on Cape Western 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.
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 Cape Western in the Leadership & Managing People 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.
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 Cape Western business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cape Western 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom .
Weighted SWOT Analysis of Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Target of Opportunity: South Africa's Western Cape Seeks a Role in the African Oil Boom 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 Cape Western needs to make to build a sustainable competitive advantage.
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