Innovation Corrupted: The Rise and Fall of Enron (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Innovation Corrupted: The Rise and Fall of Enron (A)
Presents a brief historical overview of Enron's rise, its strategic successes and failures, the evolution of its business model, and the organizational processes relied upon by Enron's management to drive and monitor the business. A rewritten version of an earlier case.
Swot Analysis of "Innovation Corrupted: The Rise and Fall of Enron (A)" written by Malcolm S. Salter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Enron's Rise facing as an external strategic factors. Some of the topics covered in Innovation Corrupted: The Rise and Fall of Enron (A) case study are - Strategic Management Strategies, Corporate governance, Ethics, Leadership, Organizational structure and Organizational Development.
Some of the macro environment factors that can be used to understand the Innovation Corrupted: The Rise and Fall of Enron (A) casestudy better are - – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Innovation Corrupted: The Rise and Fall of Enron (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation Corrupted: The Rise and Fall of Enron (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Enron's Rise, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Enron's Rise 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 Innovation Corrupted: The Rise and Fall of Enron (A) can be done for the following purposes –
1. Strategic planning using facts provided in Innovation Corrupted: The Rise and Fall of Enron (A) case study
2. Improving business portfolio management of Enron's Rise
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 Enron's Rise
Strengths Innovation Corrupted: The Rise and Fall of Enron (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Enron's Rise in Innovation Corrupted: The Rise and Fall of Enron (A) Harvard Business Review case study are -
Training and development
– Enron's Rise has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovation Corrupted: The Rise and Fall of Enron (A) 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.
High brand equity
– Enron's Rise has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Enron's Rise to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Enron's Rise 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 Innovation Corrupted: The Rise and Fall of Enron (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Innovation Corrupted: The Rise and Fall of Enron (A) 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.
Low bargaining power of suppliers
– Suppliers of Enron's Rise in the sector have low bargaining power. Innovation Corrupted: The Rise and Fall of Enron (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Enron's Rise to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Enron's Rise in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Enron's Rise 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 Innovation Corrupted: The Rise and Fall of Enron (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Enron's Rise has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Enron's Rise 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
– Enron's Rise is present in almost all the verticals within the industry. This has provided firm in Innovation Corrupted: The Rise and Fall of Enron (A) 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.
Ability to lead change in Organizational Development field
– Enron's Rise 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 Enron's Rise in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Enron's Rise
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Enron's Rise does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Enron's Rise 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 Malcolm S. Salter 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.
Weaknesses Innovation Corrupted: The Rise and Fall of Enron (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation Corrupted: The Rise and Fall of Enron (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Enron's Rise is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation Corrupted: The Rise and Fall of Enron (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Innovation Corrupted: The Rise and Fall of Enron (A), it seems that the employees of Enron's Rise 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Innovation Corrupted: The Rise and Fall of Enron (A) 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 Enron's Rise has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Enron's Rise 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 bargaining power of channel partners
– Because of the regulatory requirements, Malcolm S. Salter suggests that, Enron's Rise 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.
Slow decision making process
– As mentioned earlier in the report, Enron's Rise 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. Enron's Rise even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Enron's Rise 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.
Skills based hiring
– The stress on hiring functional specialists at Enron's Rise 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Innovation Corrupted: The Rise and Fall of Enron (A), in the dynamic environment Enron's Rise has struggled to respond to the nimble upstart competition. Enron's Rise 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 Enron's Rise products
– To increase the profitability and margins on the products, Enron's Rise needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Enron's Rise 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 - Innovation Corrupted: The Rise and Fall of Enron (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Innovation Corrupted: The Rise and Fall of Enron (A) | 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 Innovation Corrupted: The Rise and Fall of Enron (A) are -
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. Enron's Rise 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 Enron's Rise to increase its market reach. Enron's Rise 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.
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. Enron's Rise can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Enron's Rise 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, Innovation Corrupted: The Rise and Fall of Enron (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Enron's Rise can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
Building a culture of innovation
– managers at Enron's Rise 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Enron's Rise 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. Enron's Rise 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. Enron's Rise 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.
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 Enron's Rise 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.
Creating value in data economy
– The success of analytics program of Enron's Rise has opened avenues for new revenue streams for the organization in the industry. This can help Enron's Rise to build a more holistic ecosystem as suggested in the Innovation Corrupted: The Rise and Fall of Enron (A) case study. Enron's Rise can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Enron's Rise can use these opportunities to build new business models that can help the communities that Enron's Rise operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Enron's Rise 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 Enron's Rise 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.
Threats Innovation Corrupted: The Rise and Fall of Enron (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation Corrupted: The Rise and Fall of Enron (A) are -
Consumer confidence and its impact on Enron's Rise 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Enron's Rise with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Enron's Rise has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Enron's Rise needs to keep up with the evolution of technology in the Organizational Development 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.
Increasing wage structure of Enron's Rise
– 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 Enron's Rise.
Stagnating economy with rate increase
– Enron's Rise 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.
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. Enron's Rise 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Enron's Rise 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.
High dependence on third party suppliers
– Enron's Rise 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.
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. Enron's Rise needs to understand the core reasons impacting the Organizational Development 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 Enron's Rise business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Enron's Rise is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Enron's Rise.
Regulatory challenges
– Enron's Rise 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.
Weighted SWOT Analysis of Innovation Corrupted: The Rise and Fall of Enron (A) 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 Innovation Corrupted: The Rise and Fall of Enron (A) 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 Innovation Corrupted: The Rise and Fall of Enron (A) 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 Innovation Corrupted: The Rise and Fall of Enron (A) 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 Innovation Corrupted: The Rise and Fall of Enron (A) 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 Enron's Rise needs to make to build a sustainable competitive advantage.