Redefining Value Creation in Value Chains: The Social Side of Sustainability SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Redefining Value Creation in Value Chains: The Social Side of Sustainability
Although most cases on the sustainability of supply chains focus on environmental impacts, this case assesses the role of producers and the social impact of value chains by focusing on the argan oil sector. As scientific processes proved the significant health and beauty benefits of argan oil in the 1990s, demand stirred in European and North American Markets. Dr. Zoubida Charrouf founded the first argan oil cooperative in 1996 to provide jobs to the under-privileged female producers in rural Moroccan areas. While cooperatives paid three-times more than their private competitors, women still earned a fractional share of the final retail value of the oil they worked tirelessly to produce. The question addressed in this case is: how can producers gain a greater percentage of value in the argan oil sector? Is ethical labeling, such as Fair Trade, the solution? Alternatively, could the value chain be transformed more significantly by increasing the role of certain actors (such as producers) while eliminating some actors altogether? By investigating the current value chain of argan oil cooperatives, readers are called upon to contrast the value provided by actors with their economic costs to determine a more sustainable value chain.
Swot Analysis of "Redefining Value Creation in Value Chains: The Social Side of Sustainability" written by Francisco Szekely, Zahir Dossa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Argan Oil facing as an external strategic factors. Some of the topics covered in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study are - Strategic Management Strategies, Supply chain, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Redefining Value Creation in Value Chains: The Social Side of Sustainability casestudy better are - – technology disruption, there is increasing trade war between United States & China, increasing transportation and logistics costs, central banks are concerned over increasing inflation, geopolitical disruptions, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Argan Oil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Argan Oil operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability can be done for the following purposes –
1. Strategic planning using facts provided in Redefining Value Creation in Value Chains: The Social Side of Sustainability case study
2. Improving business portfolio management of Argan Oil
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Argan Oil
Strengths Redefining Value Creation in Value Chains: The Social Side of Sustainability | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Argan Oil in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study are -
Organizational Resilience of Argan Oil
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Argan Oil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Argan Oil has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Redefining Value Creation in Value Chains: The Social Side of Sustainability - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Argan Oil is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Argan Oil is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Argan Oil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Argan Oil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Argan Oil 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.
Low bargaining power of suppliers
– Suppliers of Argan Oil in the sector have low bargaining power. Redefining Value Creation in Value Chains: The Social Side of Sustainability has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Argan Oil to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Argan Oil is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Argan Oil digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Argan Oil 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.
Innovation driven organization
– Argan Oil is one of the most innovative firm in sector. Manager in Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Argan Oil is one of the leading recruiters in the industry. Managers in the Redefining Value Creation in Value Chains: The Social Side of Sustainability are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Redefining Value Creation in Value Chains: The Social Side of Sustainability Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Argan Oil has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Argan Oil 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.
Weaknesses Redefining Value Creation in Value Chains: The Social Side of Sustainability | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redefining Value Creation in Value Chains: The Social Side of Sustainability are -
Products dominated business model
– Even though Argan Oil has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Redefining Value Creation in Value Chains: The Social Side of Sustainability should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Redefining Value Creation in Value Chains: The Social Side of Sustainability HBR case study mentions - Argan Oil takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Argan Oil 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.
Increasing silos among functional specialists
– The organizational structure of Argan Oil is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Argan Oil needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Argan Oil to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Argan Oil 's lucrative customers.
High cash cycle compare to competitors
Argan Oil has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Argan Oil has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Argan Oil needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Argan Oil, firm in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Argan Oil is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Redefining Value Creation in Value Chains: The Social Side of Sustainability can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Redefining Value Creation in Value Chains: The Social Side of Sustainability are -
Buying journey improvements
– Argan Oil can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Redefining Value Creation in Value Chains: The Social Side of Sustainability suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Argan Oil 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Argan Oil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Argan Oil can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Argan Oil in the consumer business. Now Argan Oil can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Argan Oil 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 Redefining Value Creation in Value Chains: The Social Side of Sustainability - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Argan Oil to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Argan Oil can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Argan Oil can use these opportunities to build new business models that can help the communities that Argan Oil operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Argan Oil can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Argan Oil has opened avenues for new revenue streams for the organization in the industry. This can help Argan Oil to build a more holistic ecosystem as suggested in the Redefining Value Creation in Value Chains: The Social Side of Sustainability case study. Argan Oil can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Argan Oil can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Argan Oil 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.
Leveraging digital technologies
– Argan Oil can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Redefining Value Creation in Value Chains: The Social Side of Sustainability External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability are -
Technology acceleration in Forth Industrial Revolution
– Argan Oil has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Argan Oil needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Argan Oil is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Argan Oil business can come under increasing regulations regarding data privacy, data security, etc.
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.
Consumer confidence and its impact on Argan Oil demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Argan Oil needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Argan Oil can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Argan Oil will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Argan Oil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Argan Oil needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Argan Oil with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Redefining Value Creation in Value Chains: The Social Side of Sustainability, Argan Oil 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 .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Argan Oil.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Argan Oil 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.
Weighted SWOT Analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Redefining Value Creation in Value Chains: The Social Side of Sustainability needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Redefining Value Creation in Value Chains: The Social Side of Sustainability is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Redefining Value Creation in Value Chains: The Social Side of Sustainability is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Redefining Value Creation in Value Chains: The Social Side of Sustainability is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Argan Oil needs to make to build a sustainable competitive advantage.
