Redefining Value Creation in Value Chains: The Social Side of Sustainability SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Redefining Value Creation in Value Chains: The Social Side of Sustainability
Although most cases on the sustainability of supply chains focus on environmental impacts, this case assesses the role of producers and the social impact of value chains by focusing on the argan oil sector. As scientific processes proved the significant health and beauty benefits of argan oil in the 1990s, demand stirred in European and North American Markets. Dr. Zoubida Charrouf founded the first argan oil cooperative in 1996 to provide jobs to the under-privileged female producers in rural Moroccan areas. While cooperatives paid three-times more than their private competitors, women still earned a fractional share of the final retail value of the oil they worked tirelessly to produce. The question addressed in this case is: how can producers gain a greater percentage of value in the argan oil sector? Is ethical labeling, such as Fair Trade, the solution? Alternatively, could the value chain be transformed more significantly by increasing the role of certain actors (such as producers) while eliminating some actors altogether? By investigating the current value chain of argan oil cooperatives, readers are called upon to contrast the value provided by actors with their economic costs to determine a more sustainable value chain.
Swot Analysis of "Redefining Value Creation in Value Chains: The Social Side of Sustainability" written by Francisco Szekely, Zahir Dossa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Argan Oil facing as an external strategic factors. Some of the topics covered in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study are - Strategic Management Strategies, Supply chain, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Redefining Value Creation in Value Chains: The Social Side of Sustainability casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, wage bills are increasing, etc
Introduction to SWOT Analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Argan Oil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Argan Oil operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability can be done for the following purposes –
1. Strategic planning using facts provided in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study
2. Improving business portfolio management of Argan Oil
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 Argan Oil
Strengths Redefining Value Creation in Value Chains: The Social Side of Sustainability | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Argan Oil in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Redefining Value Creation in Value Chains: The Social Side of Sustainability 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.
Effective Research and Development (R&D)
– Argan Oil has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Redefining Value Creation in Value Chains: The Social Side of Sustainability - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Leadership & Managing People field
– Argan Oil is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Argan Oil in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Argan Oil in the sector have low bargaining power. Redefining Value Creation in Value Chains: The Social Side of Sustainability has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Argan Oil to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Argan Oil has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Redefining Value Creation in Value Chains: The Social Side of Sustainability HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Argan Oil has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Argan Oil 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.
Analytics focus
– Argan Oil is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Francisco Szekely, Zahir Dossa 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Redefining Value Creation in Value Chains: The Social Side of Sustainability firm has clearly differentiated products in the market place. This has enabled Argan Oil to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Argan Oil to invest into research and development (R&D) and innovation.
Training and development
– Argan Oil has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Redefining Value Creation in Value Chains: The Social Side of Sustainability 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.
High switching costs
– The high switching costs that Argan Oil has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Argan Oil
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Argan Oil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Argan Oil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Argan Oil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Redefining Value Creation in Value Chains: The Social Side of Sustainability | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redefining Value Creation in Value Chains: The Social Side of Sustainability are -
Slow decision making process
– As mentioned earlier in the report, Argan Oil has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Argan Oil even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– After analyzing the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Argan Oil needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Argan Oil is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Redefining Value Creation in Value Chains: The Social Side of Sustainability can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, is just above the industry average. Argan Oil 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.
Products dominated business model
– Even though Argan Oil 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 - Redefining Value Creation in Value Chains: The Social Side of Sustainability should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Argan Oil, firm in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Argan Oil 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Francisco Szekely, Zahir Dossa suggests that, Argan Oil is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, it seems that the employees of Argan Oil 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
Argan Oil has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Redefining Value Creation in Value Chains: The Social Side of Sustainability | 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability are -
Buying journey improvements
– Argan Oil can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Redefining Value Creation in Value Chains: The Social Side of Sustainability 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Argan Oil can use these opportunities to build new business models that can help the communities that Argan Oil operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Argan Oil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Argan Oil to increase its market reach. Argan Oil 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Argan Oil to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Argan Oil to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Argan Oil 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.
Building a culture of innovation
– managers at Argan Oil can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Argan Oil can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Redefining Value Creation in Value Chains: The Social Side of Sustainability, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Argan Oil can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Argan Oil can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Argan Oil can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Argan Oil in the consumer business. Now Argan Oil can target international markets with far fewer capital restrictions requirements than the existing system.
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. Argan Oil 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, Argan Oil is facing challenges because of the dominance of functional experts in the organization. Redefining Value Creation in Value Chains: The Social Side of Sustainability 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.
Threats Redefining Value Creation in Value Chains: The Social Side of Sustainability External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability 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. Argan Oil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Argan Oil 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Argan Oil can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability .
Shortening product life cycle
– it is one of the major threat that Argan Oil is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Argan Oil 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.
Consumer confidence and its impact on Argan Oil demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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 Argan Oil in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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. Argan Oil 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.
Technology acceleration in Forth Industrial Revolution
– Argan Oil has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Argan Oil 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Argan Oil with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Argan Oil needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Argan Oil needs to make to build a sustainable competitive advantage.
