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 - – increasing commodity prices, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
geopolitical disruptions, there is backlash against globalization, 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 -
Analytics focus
– Privatization Utility is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Damian Dominguez, Hagen Worch, Jochen Markard, Bernhard Truffer can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Privatization Utility 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.
Innovation driven organization
– Privatization Utility is one of the most innovative firm in sector. Manager in Closing the Capability Gap: Strategic Planning for the Infrastructure Sector Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Highly skilled collaborators
– Privatization Utility 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Privatization Utility is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Successful track record of launching new products
– Privatization Utility has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Privatization Utility 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.
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.
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.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Privatization Utility has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Closing the Capability Gap: Strategic Planning for the Infrastructure Sector 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 Privatization Utility has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Privatization Utility 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.
Lack of clear differentiation of Privatization Utility products
– To increase the profitability and margins on the products, Privatization Utility needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Privatization Utility, firm in the HBR case study Closing the Capability Gap: Strategic Planning for the Infrastructure Sector needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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 -
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.
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.
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 Privatization Utility 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.
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.
Learning at scale
– Online learning technologies has now opened space for Privatization Utility 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Privatization Utility in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Privatization Utility can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Privatization Utility can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Privatization Utility can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
Building a culture of innovation
– managers at Privatization Utility can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
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.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Privatization Utility 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 Closing the Capability Gap: Strategic Planning for the Infrastructure Sector .
High dependence on third party suppliers
– Privatization Utility 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.
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.
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.
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.
Regulatory challenges
– Privatization Utility 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 Organizational Development industry regulations.
Shortening product life cycle
– it is one of the major threat that Privatization Utility is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 .
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.
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.
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.
