Case Study Description of Ashland Oil, Inc.: Trouble at Floreffe (B)
Presents the first public statement made by the CEO.
Authors :: Kenneth E. Goodpaster, Ashland Oil
Topics :: Communication
Tags :: Conflict, Crisis management, Ethics, Public relations, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Ashland Oil, Inc.: Trouble at Floreffe (B)" written by Kenneth E. Goodpaster, Ashland Oil includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ashland Floreffe facing as an external strategic factors. Some of the topics covered in Ashland Oil, Inc.: Trouble at Floreffe (B) case study are - Strategic Management Strategies, Conflict, Crisis management, Ethics, Public relations, Social responsibility and Communication.
Some of the macro environment factors that can be used to understand the Ashland Oil, Inc.: Trouble at Floreffe (B) casestudy better are - – increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Ashland Oil, Inc.: Trouble at Floreffe (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ashland Oil, Inc.: Trouble at Floreffe (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ashland Floreffe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ashland Floreffe 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 Ashland Oil, Inc.: Trouble at Floreffe (B) can be done for the following purposes –
1. Strategic planning using facts provided in Ashland Oil, Inc.: Trouble at Floreffe (B) case study
2. Improving business portfolio management of Ashland Floreffe
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ashland Floreffe
Strengths Ashland Oil, Inc.: Trouble at Floreffe (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ashland Floreffe in Ashland Oil, Inc.: Trouble at Floreffe (B) Harvard Business Review case study are -
Ability to recruit top talent
– Ashland Floreffe is one of the leading recruiters in the industry. Managers in the Ashland Oil, Inc.: Trouble at Floreffe (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Ashland Floreffe
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ashland Floreffe does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Ashland Floreffe is present in almost all the verticals within the industry. This has provided firm in Ashland Oil, Inc.: Trouble at Floreffe (B) 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.
Successful track record of launching new products
– Ashland Floreffe has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ashland Floreffe 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.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Ashland Floreffe digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ashland Floreffe 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.
Training and development
– Ashland Floreffe has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ashland Oil, Inc.: Trouble at Floreffe (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Ashland Floreffe in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Ashland Floreffe 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.
Learning organization
- Ashland Floreffe 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 Ashland Floreffe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ashland Oil, Inc.: Trouble at Floreffe (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Ashland Floreffe is one of the most innovative firm in sector. Manager in Ashland Oil, Inc.: Trouble at Floreffe (B) 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
– Ashland Floreffe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ashland Floreffe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Ashland Floreffe in the sector have low bargaining power. Ashland Oil, Inc.: Trouble at Floreffe (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ashland Floreffe to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Ashland Oil, Inc.: Trouble at Floreffe (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ashland Oil, Inc.: Trouble at Floreffe (B) are -
Lack of clear differentiation of Ashland Floreffe products
– To increase the profitability and margins on the products, Ashland Floreffe needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ashland Oil, Inc.: Trouble at Floreffe (B), it seems that the employees of Ashland Floreffe 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ashland Floreffe is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ashland Oil, Inc.: Trouble at Floreffe (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Ashland Floreffe 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. Ashland Floreffe 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.
Aligning sales with marketing
– It come across in the case study Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Oil, Inc.: Trouble at Floreffe (B) can leverage the sales team experience to cultivate customer relationships as Ashland Floreffe is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Ashland Floreffe, firm in the HBR case study Ashland Oil, Inc.: Trouble at Floreffe (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Ashland Oil, Inc.: Trouble at Floreffe (B), it seems that company is thinking about the frontier risks that can impact Communication 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ashland Oil, Inc.: Trouble at Floreffe (B), in the dynamic environment Ashland Floreffe has struggled to respond to the nimble upstart competition. Ashland Floreffe has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Ashland Floreffe 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.
Capital Spending Reduction
– Even during the low interest decade, Ashland Floreffe 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Floreffe has relatively successful track record of launching new products.
Opportunities Ashland Oil, Inc.: Trouble at Floreffe (B) | 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 Ashland Oil, Inc.: Trouble at Floreffe (B) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ashland Floreffe is facing challenges because of the dominance of functional experts in the organization. Ashland Oil, Inc.: Trouble at Floreffe (B) 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.
Creating value in data economy
– The success of analytics program of Ashland Floreffe has opened avenues for new revenue streams for the organization in the industry. This can help Ashland Floreffe to build a more holistic ecosystem as suggested in the Ashland Oil, Inc.: Trouble at Floreffe (B) case study. Ashland Floreffe can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Ashland Floreffe to increase its market reach. Ashland Floreffe 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ashland Floreffe to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Ashland Floreffe can develop new processes and procedures in Communication 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ashland Floreffe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Ashland Floreffe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Ashland Floreffe 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.
Using analytics as competitive advantage
– Ashland Floreffe 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 Ashland Oil, Inc.: Trouble at Floreffe (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ashland Floreffe to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Ashland Floreffe can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ashland Floreffe 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 Ashland Floreffe to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ashland Floreffe 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 Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ashland Floreffe 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. Ashland Floreffe 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.
Threats Ashland Oil, Inc.: Trouble at Floreffe (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ashland Oil, Inc.: Trouble at Floreffe (B) are -
High dependence on third party suppliers
– Ashland Floreffe 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.
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ashland Floreffe can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ashland Floreffe in the Communication industry. The Communication industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology 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.
Stagnating economy with rate increase
– Ashland Floreffe 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.
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 Ashland Floreffe.
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. Ashland Floreffe 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.
Regulatory challenges
– Ashland Floreffe 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 Communication industry regulations.
Environmental challenges
– Ashland Floreffe 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. Ashland Floreffe can take advantage of this fund but it will also bring new competitors in the Communication industry.
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 Ashland Floreffe in the Communication sector and impact the bottomline of the organization.
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. Ashland Floreffe needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ashland Floreffe 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 Ashland Oil, Inc.: Trouble at Floreffe (B) .
Consumer confidence and its impact on Ashland Floreffe 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.
Weighted SWOT Analysis of Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Oil, Inc.: Trouble at Floreffe (B) 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 Ashland Floreffe needs to make to build a sustainable competitive advantage.