Closing the Capability Gap: Strategic Planning for the Infrastructure Sector SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Closing the Capability Gap: Strategic Planning for the Infrastructure Sector
In order to cope with arising challenges in infrastructure sectors, utility organizations must develop new strategic, organizational, and technological capabilities. Public utility service providers have often been seen as lacking the capacity to identify and/or implement the needed transformation processes. Instead, privatization has been proposed as a panacea to remedy this deficit. However, privatization projects are often not realized because they encounter strong political opposition. This article presents the results of strategic planning projects in three public wastewater organizations in Switzerland. This study suggests that if appropriate processes are implemented, public utility organizations are able to overcome their limitations in identifying the relevant capability deficits and select adequate strategies to compensate for the deficits. While these strategies may deviate substantially across utilities due to differences in the goals pursued, the widespread adoption of strategic planning methods by public utilities represents a viable alternative to privatization.
Authors :: Damian Dominguez, Hagen Worch, Jochen Markard, Bernhard Truffer
Swot Analysis of "Closing the Capability Gap: Strategic Planning for the Infrastructure Sector" written by Damian Dominguez, Hagen Worch, Jochen Markard, Bernhard Truffer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Privatization Utility facing as an external strategic factors. Some of the topics covered in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study are - Strategic Management Strategies, International business, Organizational structure, Strategic planning and Organizational Development.
Some of the macro environment factors that can be used to understand the Closing the Capability Gap: Strategic Planning for the Infrastructure Sector casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Closing the Capability Gap: Strategic Planning for the Infrastructure Sector
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Privatization Utility, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Privatization Utility 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector can be done for the following purposes –
1. Strategic planning using facts provided in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study
2. Improving business portfolio management of Privatization Utility
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Privatization Utility
Strengths Closing the Capability Gap: Strategic Planning for the Infrastructure Sector | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Privatization Utility in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector Harvard Business Review case study are -
Training and development
– Privatization Utility has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Organizational Development field
– Privatization Utility 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 Privatization Utility in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Privatization Utility digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Privatization Utility 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.
Operational resilience
– The operational resilience strategy in the Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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.
Sustainable margins compare to other players in Organizational Development industry
– Closing the Capability Gap: Strategic Planning for the Infrastructure Sector firm has clearly differentiated products in the market place. This has enabled Privatization Utility to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Privatization Utility to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Privatization Utility in the sector have low bargaining power. Closing the Capability Gap: Strategic Planning for the Infrastructure Sector has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Privatization Utility to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Privatization Utility 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.
Organizational Resilience of Privatization Utility
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Privatization Utility does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Privatization Utility is present in almost all the verticals within the industry. This has provided firm in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Superior customer experience
– The customer experience strategy of Privatization Utility in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Privatization Utility is one of the leading recruiters in the industry. Managers in the Closing the Capability Gap: Strategic Planning for the Infrastructure Sector are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Privatization Utility 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Closing the Capability Gap: Strategic Planning for the Infrastructure Sector | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Closing the Capability Gap: Strategic Planning for the Infrastructure Sector are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, it seems that the employees of Privatization Utility 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.
Products dominated business model
– Even though Privatization Utility 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 - Closing the Capability Gap: Strategic Planning for the Infrastructure Sector should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Privatization Utility 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.
High cash cycle compare to competitors
Privatization Utility 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 operating costs
– Compare to the competitors, firm in the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Privatization Utility 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Privatization Utility is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Privatization Utility needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Privatization Utility to focus more on services rather than just following the product oriented approach.
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 Privatization Utility supply chain. Even after few cautionary changes mentioned in the HBR case study - Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Privatization Utility vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, is just above the industry average. Privatization Utility needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
Capital Spending Reduction
– Even during the low interest decade, Privatization Utility 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, in the dynamic environment Privatization Utility has struggled to respond to the nimble upstart competition. Privatization Utility has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Closing the Capability Gap: Strategic Planning for the Infrastructure Sector | 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector are -
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. Privatization Utility can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Privatization Utility can use these opportunities to build new business models that can help the communities that Privatization Utility operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Privatization Utility 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, Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Privatization Utility 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 Privatization Utility to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Privatization Utility 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.
Buying journey improvements
– Privatization Utility can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Privatization Utility is facing challenges because of the dominance of functional experts in the organization. Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Privatization Utility 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Privatization Utility to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Privatization Utility has opened avenues for new revenue streams for the organization in the industry. This can help Privatization Utility to build a more holistic ecosystem as suggested in the Closing the Capability Gap: Strategic Planning for the Infrastructure Sector case study. Privatization Utility can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Privatization Utility 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Privatization Utility can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Privatization Utility to increase its market reach. Privatization Utility 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Privatization Utility can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Closing the Capability Gap: Strategic Planning for the Infrastructure Sector External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector are -
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 Privatization Utility.
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.
Consumer confidence and its impact on Privatization Utility 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.
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. Privatization Utility needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
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 Privatization Utility in the Organizational Development sector and impact the bottomline of the organization.
Environmental challenges
– Privatization Utility 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. Privatization Utility can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Stagnating economy with rate increase
– Privatization Utility 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector, Privatization Utility may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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. Privatization Utility 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.
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 Privatization Utility 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 Privatization Utility with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Privatization Utility in the Organizational Development industry. The Organizational Development 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Privatization Utility needs to make to build a sustainable competitive advantage.