Case Study Description of Armco Inc.--The Bubble Policy
This is a Darden case study.This case considers the EPA's bubble policy, which allows pollution to be managed on a plantwide basis rather than stack by stack. A pollution constraint is added to a linear-programming model that may be used to plan production and the control of pollution.
Authors :: Samuel E Bodily, Sherwood C. Frey, H Landis Gabel, W. K. Sessoms
Swot Analysis of "Armco Inc.--The Bubble Policy" written by Samuel E Bodily, Sherwood C. Frey, H Landis Gabel, W. K. Sessoms includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pollution Stack facing as an external strategic factors. Some of the topics covered in Armco Inc.--The Bubble Policy case study are - Strategic Management Strategies, Competitive strategy, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Armco Inc.--The Bubble Policy casestudy better are - – wage bills are increasing, technology disruption, increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Armco Inc.--The Bubble Policy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Armco Inc.--The Bubble Policy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pollution Stack, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pollution Stack 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 Armco Inc.--The Bubble Policy can be done for the following purposes –
1. Strategic planning using facts provided in Armco Inc.--The Bubble Policy case study
2. Improving business portfolio management of Pollution Stack
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 Pollution Stack
Strengths Armco Inc.--The Bubble Policy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pollution Stack in Armco Inc.--The Bubble Policy Harvard Business Review case study are -
Learning organization
- Pollution Stack 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 Pollution Stack is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Armco Inc.--The Bubble Policy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Pollution Stack 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 Armco Inc.--The Bubble Policy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Armco Inc.--The Bubble Policy firm has clearly differentiated products in the market place. This has enabled Pollution Stack to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Pollution Stack to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Pollution Stack 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.
Ability to lead change in Leadership & Managing People field
– Pollution Stack 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 Pollution Stack in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Pollution Stack
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pollution Stack does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Pollution Stack is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Pollution Stack has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pollution Stack to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Pollution Stack in the sector have low bargaining power. Armco Inc.--The Bubble Policy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pollution Stack to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Pollution Stack has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Armco Inc.--The Bubble Policy 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.
Highly skilled collaborators
– Pollution Stack 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 Armco Inc.--The Bubble Policy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Pollution Stack 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.
Weaknesses Armco Inc.--The Bubble Policy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Armco Inc.--The Bubble Policy are -
Workers concerns about automation
– As automation is fast increasing in the segment, Pollution Stack 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Samuel E Bodily, Sherwood C. Frey, H Landis Gabel, W. K. Sessoms suggests that, Pollution Stack is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Armco Inc.--The Bubble Policy, it seems that the employees of Pollution Stack don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study Armco Inc.--The Bubble Policy 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 Pollution Stack 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Pollution Stack 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. Pollution Stack 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Armco Inc.--The Bubble Policy, in the dynamic environment Pollution Stack has struggled to respond to the nimble upstart competition. Pollution Stack 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 Pollution Stack products
– To increase the profitability and margins on the products, Pollution Stack needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Armco Inc.--The Bubble Policy HBR case study mentions - Pollution Stack 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.
Increasing silos among functional specialists
– The organizational structure of Pollution Stack is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Pollution Stack needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pollution Stack to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Armco Inc.--The Bubble Policy 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 Pollution Stack has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pollution Stack is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Armco Inc.--The Bubble Policy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Armco Inc.--The Bubble Policy | 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 Armco Inc.--The Bubble Policy are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pollution Stack 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 Pollution Stack to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Pollution Stack 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 Armco Inc.--The Bubble Policy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pollution Stack to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Pollution Stack 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.
Developing new processes and practices
– Pollution Stack 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.
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. Pollution Stack can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Pollution Stack can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Armco Inc.--The Bubble Policy 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
– Pollution Stack 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.
Creating value in data economy
– The success of analytics program of Pollution Stack has opened avenues for new revenue streams for the organization in the industry. This can help Pollution Stack to build a more holistic ecosystem as suggested in the Armco Inc.--The Bubble Policy case study. Pollution Stack can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Pollution Stack 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.
Loyalty marketing
– Pollution Stack 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Pollution Stack can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pollution Stack 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, Armco Inc.--The Bubble Policy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pollution Stack can use these opportunities to build new business models that can help the communities that Pollution Stack operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Armco Inc.--The Bubble Policy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Armco Inc.--The Bubble Policy are -
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. Pollution Stack 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 Pollution Stack.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pollution Stack 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 Armco Inc.--The Bubble Policy .
Consumer confidence and its impact on Pollution Stack 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.
Regulatory challenges
– Pollution Stack 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 Leadership & Managing People industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pollution Stack in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Pollution Stack
– 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 Pollution Stack.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Armco Inc.--The Bubble Policy, Pollution Stack may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pollution Stack can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Pollution Stack needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Pollution Stack business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pollution Stack 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 Armco Inc.--The Bubble Policy 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 Armco Inc.--The Bubble Policy 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 Armco Inc.--The Bubble Policy 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 Armco Inc.--The Bubble Policy 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 Armco Inc.--The Bubble Policy 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 Pollution Stack needs to make to build a sustainable competitive advantage.