Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan
Uralkali, the giant Russian potash producer, decided to stop export sales through the Belarusian Potash Company - an export cartel it had formed with Belaruskali. Uralkali planned to increase potash production and export it independently through its own trading company. This move threatened to reduce global potash prices by up to 25 per cent. Immediately, the stock prices of major potash producers around the world plummeted. This set of three cases looks at the potential competitive strategies of three key players in the industry: PotashCorp, the firm with the world's largest potash reserves; Agrium, a firm in the midst of a large potash mine expansion; and BHP Billiton, the world's largest mining company planning huge potash mine development. See B case 9B14M031B and C case 9B14M031C.
Swot Analysis of "Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan" written by Mark Vandenbosch, Amit Jethani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Potash Uralkali facing as an external strategic factors. Some of the topics covered in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan case study are - Strategic Management Strategies, Competitive strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan casestudy better are - – increasing energy prices, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Potash Uralkali, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Potash Uralkali 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan can be done for the following purposes –
1. Strategic planning using facts provided in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan case study
2. Improving business portfolio management of Potash Uralkali
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 Potash Uralkali
Strengths Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Potash Uralkali in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan Harvard Business Review case study are -
Highly skilled collaborators
– Potash Uralkali 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Potash Uralkali in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Potash Uralkali in the sector have low bargaining power. Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Potash Uralkali to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Potash Uralkali is one of the leading recruiters in the industry. Managers in the Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Leadership & Managing People field
– Potash Uralkali 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 Potash Uralkali in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Potash Uralkali is present in almost all the verticals within the industry. This has provided firm in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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.
Analytics focus
– Potash Uralkali 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 Mark Vandenbosch, Amit Jethani 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.
Innovation driven organization
– Potash Uralkali is one of the most innovative firm in sector. Manager in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Potash Uralkali has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Potash Uralkali to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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.
Learning organization
- Potash Uralkali 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 Potash Uralkali is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Potash Uralkali digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Potash Uralkali 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.
Weaknesses Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan are -
Skills based hiring
– The stress on hiring functional specialists at Potash Uralkali 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan, it seems that the employees of Potash Uralkali 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Potash Uralkali has relatively successful track record of launching new products.
Lack of clear differentiation of Potash Uralkali products
– To increase the profitability and margins on the products, Potash Uralkali needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Vandenbosch, Amit Jethani suggests that, Potash Uralkali 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.
High cash cycle compare to competitors
Potash Uralkali 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.
Capital Spending Reduction
– Even during the low interest decade, Potash Uralkali 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.
Interest costs
– Compare to the competition, Potash Uralkali 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.
Need for greater diversity
– Potash Uralkali has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan, is just above the industry average. Potash Uralkali 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.
Low market penetration in new markets
– Outside its home market of Potash Uralkali, firm in the HBR case study Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan | 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan are -
Leveraging digital technologies
– Potash Uralkali 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.
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 Potash Uralkali in the consumer business. Now Potash Uralkali can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Potash Uralkali 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, Potash Uralkali can use these opportunities to build new business models that can help the communities that Potash Uralkali operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Potash Uralkali has opened avenues for new revenue streams for the organization in the industry. This can help Potash Uralkali to build a more holistic ecosystem as suggested in the Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan case study. Potash Uralkali can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Potash Uralkali 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, Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Potash Uralkali 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.
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. Potash Uralkali can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Potash Uralkali can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Potash Uralkali is facing challenges because of the dominance of functional experts in the organization. Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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.
Better consumer reach
– The expansion of the 5G network will help Potash Uralkali to increase its market reach. Potash Uralkali 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.
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. Potash Uralkali can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Potash Uralkali 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.
Threats Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan are -
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 Potash Uralkali.
Environmental challenges
– Potash Uralkali 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. Potash Uralkali can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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
– Potash Uralkali 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 Potash Uralkali 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 Potash Uralkali 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 Potash Uralkali is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan, Potash Uralkali 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 wage structure of Potash Uralkali
– 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 Potash Uralkali.
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.
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. Potash Uralkali 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
– Potash Uralkali 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 Potash Uralkali with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Punch Up In the Potash Industry (A): Agrium Inc. - The Fertilizer Hits the Fan 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 Potash Uralkali needs to make to build a sustainable competitive advantage.
