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 household debt because of falling income levels, increasing energy prices, technology disruption, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Operational resilience
– The operational resilience strategy in the Ashland Oil, Inc.: Trouble at Floreffe (B) 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
- 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.
Cross disciplinary teams
– Horizontal connected teams at the Ashland Floreffe are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Ashland Floreffe 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 Kenneth E. Goodpaster, Ashland Oil 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.
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.
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.
Effective Research and Development (R&D)
– Ashland Floreffe 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 Ashland Oil, Inc.: Trouble at Floreffe (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Highly skilled collaborators
– Ashland Floreffe 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 Ashland Oil, Inc.: Trouble at Floreffe (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of Ashland Floreffe is dominated by functional specialists. It is not different from other players in the Communication segment. Ashland Floreffe needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ashland Floreffe to focus more on services rather than just following the product oriented approach.
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.
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.
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 Ashland Floreffe supply chain. Even after few cautionary changes mentioned in the HBR case study - Ashland Oil, Inc.: Trouble at Floreffe (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ashland Floreffe vulnerable to further global disruptions in South East Asia.
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.
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.
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.
High cash cycle compare to competitors
Ashland Floreffe 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.
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.
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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ashland Floreffe in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communication 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. Ashland Floreffe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Buying journey improvements
– Ashland Floreffe can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ashland Oil, Inc.: Trouble at Floreffe (B) 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ashland Floreffe can use these opportunities to build new business models that can help the communities that Ashland Floreffe operates in. Secondly it can use opportunities from government spending in Communication sector.
Leveraging digital technologies
– Ashland Floreffe 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 Ashland Floreffe in the consumer business. Now Ashland Floreffe can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Ashland Floreffe 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 Communication segment.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communication industry, but it has also influenced the consumer preferences. Ashland Floreffe can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ashland Floreffe 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, Ashland Oil, Inc.: Trouble at Floreffe (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ashland Oil, Inc.: Trouble at Floreffe (B), Ashland Floreffe may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
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.
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.
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) .
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ashland Floreffe business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ashland Floreffe has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Ashland Floreffe needs to keep up with the evolution of technology in the Communication sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 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.
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.
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.