Manila Water Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Manila Water Company

To maximize their effectiveness, color cases should be printed in color.In 1997, the Philippines government privatized its water utility in the metropolitan Manila area. The East Zone concession was won by Manila Water Company and the West Zone concession by Maynilad Water Services. Over the next decade, Manila Water turned in an impressive and profitable performance, while Maynilad failed. Describes the management actions of Manila Water and poses the question of whether, and how much, they should bid for the vacated West Zone concession.

Authors :: V. Kasturi Rangan

Topics :: Strategy & Execution

Tags :: Economy, International business, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Manila Water Company" written by V. Kasturi Rangan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Manila Water facing as an external strategic factors. Some of the topics covered in Manila Water Company case study are - Strategic Management Strategies, Economy, International business, Social responsibility and Strategy & Execution.

Some of the macro environment factors that can be used to understand the Manila Water Company casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Manila Water Company

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Manila Water Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Manila Water, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Manila Water 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Manila Water Company can be done for the following purposes –
1. Strategic planning using facts provided in Manila Water Company case study
2. Improving business portfolio management of Manila Water
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Manila Water

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Strengths Manila Water Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Manila Water in Manila Water Company Harvard Business Review case study are -

Ability to recruit top talent

– Manila Water is one of the leading recruiters in the industry. Managers in the Manila Water Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Learning organization

- Manila Water is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Manila Water is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Manila Water Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Manila Water in the sector have low bargaining power. Manila Water Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Manila Water to manage not only supply disruptions but also source products at highly competitive prices.

Successful track record of launching new products

– Manila Water has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Manila Water 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 Manila Water in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Strategy & Execution segment

- digital transformation varies from industry to industry. For Manila Water digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Manila Water has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Training and development

– Manila Water has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Manila Water Company 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 Strategy & Execution field

– Manila Water 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 Manila Water in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

– Manila Water 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 Manila Water Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Manila Water 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 Manila Water Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Sustainable margins compare to other players in Strategy & Execution industry

– Manila Water Company firm has clearly differentiated products in the market place. This has enabled Manila Water to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Manila Water to invest into research and development (R&D) and innovation.

Operational resilience

– The operational resilience strategy in the Manila Water Company 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.

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Weaknesses Manila Water Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Manila Water Company are -

Interest costs

– Compare to the competition, Manila Water 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Manila Water is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Manila Water Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Low market penetration in new markets

– Outside its home market of Manila Water, firm in the HBR case study Manila Water Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High bargaining power of channel partners

– Because of the regulatory requirements, V. Kasturi Rangan suggests that, Manila Water 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.

Lack of clear differentiation of Manila Water products

– To increase the profitability and margins on the products, Manila Water needs to provide more differentiated products than what it is currently offering in the marketplace.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Manila Water Company 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 Manila Water has relatively successful track record of launching new products.

Aligning sales with marketing

– It come across in the case study Manila Water Company 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 Manila Water Company can leverage the sales team experience to cultivate customer relationships as Manila Water is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Manila Water Company, in the dynamic environment Manila Water has struggled to respond to the nimble upstart competition. Manila Water has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Need for greater diversity

– Manila Water has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow to strategic competitive environment developments

– As Manila Water Company HBR case study mentions - Manila Water 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.

Increasing silos among functional specialists

– The organizational structure of Manila Water is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Manila Water needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Manila Water to focus more on services rather than just following the product oriented approach.

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Opportunities Manila Water Company | 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 Manila Water Company are -

Buying journey improvements

– Manila Water can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Manila Water Company 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, Manila Water 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Manila Water 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 Manila Water to hire the very best people irrespective of their geographical location.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Manila Water 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. Manila Water 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Manila Water 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, Manila Water Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Manila Water in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Manila Water can use these opportunities to build new business models that can help the communities that Manila Water operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.

Building a culture of innovation

– managers at Manila Water 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 Strategy & Execution segment.

Leveraging digital technologies

– Manila Water 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Manila Water can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Manila Water can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– Manila Water can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Better consumer reach

– The expansion of the 5G network will help Manila Water to increase its market reach. Manila Water 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.

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Threats Manila Water Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Manila Water Company are -

High dependence on third party suppliers

– Manila Water 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.

Increasing wage structure of Manila Water

– 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 Manila Water.

Regulatory challenges

– Manila Water 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 Strategy & Execution industry regulations.

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 Manila Water 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

– Manila Water has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Manila Water needs to keep up with the evolution of technology in the Strategy & Execution 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.

Environmental challenges

– Manila Water 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. Manila Water can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Manila Water 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 Manila Water Company .

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 Manila Water business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Manila Water can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Manila Water needs to understand the core reasons impacting the Strategy & Execution 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.

Stagnating economy with rate increase

– Manila Water 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.

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Weighted SWOT Analysis of Manila Water Company 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 Manila Water Company 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 Manila Water Company 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 Manila Water Company 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 Manila Water Company 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 Manila Water needs to make to build a sustainable competitive advantage.

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