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 - – there is increasing trade war between United States & China, geopolitical disruptions, there is backlash against globalization, increasing household debt because of falling income levels, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
Ability to recruit top talent
– Energy Demands is one of the leading recruiters in the industry. Managers in the Schneider Electric: Becoming the Global Specialist in Energy Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Energy Demands in the sector have low bargaining power. Schneider Electric: Becoming the Global Specialist in Energy Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Energy Demands to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Energy Demands 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 John D. Macomber, Rachna Tahilyani 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 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 -
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.
Increasing silos among functional specialists
– The organizational structure of Energy Demands is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Energy Demands needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Energy Demands to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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 Energy Demands supply chain. Even after few cautionary changes mentioned in the HBR case study - Schneider Electric: Becoming the Global Specialist in Energy Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Energy Demands vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Schneider Electric: Becoming the Global Specialist in Energy Management HBR case study mentions - Energy Demands takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
Aligning sales with marketing
– It come across in the case study Schneider Electric: Becoming the Global Specialist in Energy Management that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Schneider Electric: Becoming the Global Specialist in Energy Management can leverage the sales team experience to cultivate customer relationships as Energy Demands is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management 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 Energy Demands 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Energy Demands 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.
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 -
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. Energy Demands can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Energy Demands can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Energy Demands can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Loyalty marketing
– Energy Demands 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.
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.
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.
Using analytics as competitive advantage
– Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Energy Demands to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Energy Demands with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Energy Demands 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.
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.
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.
Environmental challenges
– Energy Demands 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. Energy Demands can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Energy Demands in the Finance & Accounting industry. The Finance & Accounting 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 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.
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.
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.
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.
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.
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.
