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 - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, increasing energy prices, 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 -
Diverse revenue streams
– Argan Oil is present in almost all the verticals within the industry. This has provided firm in Redefining Value Creation in Value Chains: The Social Side of Sustainability 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.
Learning organization
- Argan Oil 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 Argan Oil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Argan Oil is one of the most innovative firm in sector. Manager in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Ability to recruit top talent
– Argan Oil is one of the leading recruiters in the industry. Managers in the Redefining Value Creation in Value Chains: The Social Side of Sustainability are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Argan Oil supply chain. Even after few cautionary changes mentioned in the HBR case study - Redefining Value Creation in Value Chains: The Social Side of Sustainability, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Argan Oil vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability 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 Argan Oil 's lucrative customers.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, in the dynamic environment Argan Oil has struggled to respond to the nimble upstart competition. Argan Oil has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Slow to strategic competitive environment developments
– As Redefining Value Creation in Value Chains: The Social Side of Sustainability HBR case study mentions - Argan Oil 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.
Lack of clear differentiation of Argan Oil products
– To increase the profitability and margins on the products, Argan Oil needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Developing new processes and practices
– Argan Oil 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.
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.
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.
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.
Leveraging digital technologies
– Argan Oil 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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Argan Oil 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.
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.
Creating value in data economy
– The success of analytics program of Argan Oil has opened avenues for new revenue streams for the organization in the industry. This can help Argan Oil to build a more holistic ecosystem as suggested in the Redefining Value Creation in Value Chains: The Social Side of Sustainability case study. Argan Oil can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Argan Oil in the consumer business. Now Argan Oil can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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 Argan Oil.
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.
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.
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 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.
Environmental challenges
– Argan Oil 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. Argan Oil can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Stagnating economy with rate increase
– Argan Oil 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.
Increasing wage structure of Argan Oil
– 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 Argan Oil.
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.
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.
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.
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.