Schneider Electric: Becoming the Global Specialist in Energy Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Schneider Electric: Becoming the Global Specialist in Energy Management
Global electrical products company assesses growth and market demands in India. Company must decide between a products acquisition or developing a service business. Students need to be aware of different country conditions, demands on implementation of different strategies, impact on culture. Also discusses energy performance contracting in the context of making India energy generation capability more efficient.
Swot Analysis of "Schneider Electric: Becoming the Global Specialist in Energy Management" written by John D. Macomber, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Energy Demands facing as an external strategic factors. Some of the topics covered in Schneider Electric: Becoming the Global Specialist in Energy Management case study are - Strategic Management Strategies, Collaboration, Globalization, Marketing, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Schneider Electric: Becoming the Global Specialist in Energy Management casestudy better are - – central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of Schneider Electric: Becoming the Global Specialist in Energy Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Schneider Electric: Becoming the Global Specialist in Energy Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Energy Demands, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management can be done for the following purposes –
1. Strategic planning using facts provided in Schneider Electric: Becoming the Global Specialist in Energy Management case study
2. Improving business portfolio management of Energy Demands
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Energy Demands
Strengths Schneider Electric: Becoming the Global Specialist in Energy Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Energy Demands in Schneider Electric: Becoming the Global Specialist in Energy Management Harvard Business Review case study are -
High brand equity
– Energy Demands has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Energy Demands to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Innovation driven organization
– Energy Demands is one of the most innovative firm in sector. Manager in Schneider Electric: Becoming the Global Specialist in Energy Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Energy Demands is present in almost all the verticals within the industry. This has provided firm in Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Effective Research and Development (R&D)
– Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Energy Demands has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Schneider Electric: Becoming the Global Specialist in Energy Management 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 Finance & Accounting field
– Energy Demands 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 Energy Demands in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Energy Demands 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Schneider Electric: Becoming the Global Specialist in Energy Management firm has clearly differentiated products in the market place. This has enabled Energy Demands to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Energy Demands to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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
– Energy Demands has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Energy Demands 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.
Superior customer experience
– The customer experience strategy of Energy Demands in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Schneider Electric: Becoming the Global Specialist in Energy Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Schneider Electric: Becoming the Global Specialist in Energy Management are -
Lack of clear differentiation of Energy Demands products
– To increase the profitability and margins on the products, Energy Demands needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management, is just above the industry average. Energy Demands 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.
High cash cycle compare to competitors
Energy Demands 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.
Products dominated business model
– Even though Energy Demands 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 - Schneider Electric: Becoming the Global Specialist in Energy Management should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Schneider Electric: Becoming the Global Specialist in Energy Management, in the dynamic environment Energy Demands has struggled to respond to the nimble upstart competition. Energy Demands has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, John D. Macomber, Rachna Tahilyani suggests that, Energy Demands 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.
Low market penetration in new markets
– Outside its home market of Energy Demands, firm in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Schneider Electric: Becoming the Global Specialist in Energy Management 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 Energy Demands has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Energy Demands 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, Energy Demands 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.
No frontier risks strategy
– After analyzing the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 Schneider Electric: Becoming the Global Specialist in Energy Management | 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 Schneider Electric: Becoming the Global Specialist in Energy Management are -
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 Energy Demands in the consumer business. Now Energy Demands can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Energy Demands can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Energy Demands 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.
Learning at scale
– Online learning technologies has now opened space for Energy Demands 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.
Building a culture of innovation
– managers at Energy Demands 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 Finance & Accounting segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Energy Demands 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 Energy Demands to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Energy Demands has opened avenues for new revenue streams for the organization in the industry. This can help Energy Demands to build a more holistic ecosystem as suggested in the Schneider Electric: Becoming the Global Specialist in Energy Management case study. Energy Demands can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Energy Demands 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, Schneider Electric: Becoming the Global Specialist in Energy Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Energy Demands can use these opportunities to build new business models that can help the communities that Energy Demands operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Energy Demands in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Energy Demands to increase its market reach. Energy Demands 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Energy Demands 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. Energy Demands 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 Energy Demands 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.
Threats Schneider Electric: Becoming the Global Specialist in Energy Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Schneider Electric: Becoming the Global Specialist in Energy Management, Energy Demands may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Consumer confidence and its impact on Energy Demands 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.
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 Energy Demands.
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 Energy Demands business can come under increasing regulations regarding data privacy, data security, 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. Energy Demands 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.
Stagnating economy with rate increase
– Energy Demands 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 acceleration in Forth Industrial Revolution
– Energy Demands has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Energy Demands needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
Increasing wage structure of Energy Demands
– 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 Energy Demands.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Energy Demands can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Energy Demands is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Energy Demands needs to understand the core reasons impacting the Finance & Accounting 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.
Weighted SWOT Analysis of Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Energy Demands needs to make to build a sustainable competitive advantage.