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 - – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, wage bills are increasing, 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 -
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.
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.
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.
Ability to lead change in Communication field
– Ashland Floreffe 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 Ashland Floreffe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Communication industry
– Ashland Oil, Inc.: Trouble at Floreffe (B) firm has clearly differentiated products in the market place. This has enabled Ashland Floreffe to fetch slight price premium compare to the competitors in the Communication industry. The sustainable margins have also helped Ashland Floreffe to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
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 -
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.
Slow to strategic competitive environment developments
– As Ashland Oil, Inc.: Trouble at Floreffe (B) HBR case study mentions - Ashland Floreffe 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.
Products dominated business model
– Even though Ashland Floreffe 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 - Ashland Oil, Inc.: Trouble at Floreffe (B) should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Ashland Floreffe 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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth E. Goodpaster, Ashland Oil suggests that, Ashland Floreffe 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 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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Loyalty marketing
– Ashland Floreffe has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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 -
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.
Increasing wage structure of Ashland Floreffe
– 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 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.
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.
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.
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) .
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.
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.
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.
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.
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.
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.
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.
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.
