Gas Natural BAN's Strategy for Low-Income Sectors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gas Natural BAN's Strategy for Low-Income Sectors
This case focuses on Gas Natural BAN's network expansion project to provide natural gas to five low-income neighborhoods in the suburban area of Buenos Aires. It shows how a business model evolved to serve low-income sector (henceforth, LIS) customers, and, more particularly, it describes how the company partnered with a local CSO, FundaciA?n Pro Vivienda Social (Foundation for Social Housing, henceforth FPVS), and learned how to work with these communities in a project carried out in Moreno's Cuartel V. Starting with the project carried out with FPVS, the company had begun to pursue natural gas network expansion projects for LIS neighborhoods with a business approach that differed from the scheme used with conventional customers. At the juncture depicted by this case, the company needs to set the guidelines for its natural gas network expansion strategy targeting LIS neighborhoods. Gas Natural BAN's experience with FPVS, though viewed as successful by the company, registered some inefficiencies that prevented its large-scale application and led management to look for new options to pursue its LIS strategy. As a result, the FPVS collaboration model and its potential for optimization were questioned. It was also questionable whether the scheme used by FPVS in Moreno's Cuartel V would be applicable to other neighborhoods with different conditions. This teaching case deals primarily with the development of inclusive business models based on cross-sector collaborations involving companies, nonprofits and citizens. It may be used in graduate courses on Business and Society, Corporate Social Responsibility or Business Strategy including BOP issues.
Swot Analysis of "Gas Natural BAN's Strategy for Low-Income Sectors" written by Gabriel Berger, Adrian Darmohraj includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fpvs Lis facing as an external strategic factors. Some of the topics covered in Gas Natural BAN's Strategy for Low-Income Sectors case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Gas Natural BAN's Strategy for Low-Income Sectors casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Gas Natural BAN's Strategy for Low-Income Sectors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gas Natural BAN's Strategy for Low-Income Sectors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fpvs Lis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors can be done for the following purposes –
1. Strategic planning using facts provided in Gas Natural BAN's Strategy for Low-Income Sectors case study
2. Improving business portfolio management of Fpvs Lis
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 Fpvs Lis
Strengths Gas Natural BAN's Strategy for Low-Income Sectors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fpvs Lis in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study are -
High brand equity
– Fpvs Lis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fpvs Lis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Fpvs Lis is one of the most innovative firm in sector. Manager in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Gas Natural BAN's Strategy for Low-Income Sectors 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.
Learning organization
- Fpvs Lis 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 Fpvs Lis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Fpvs Lis in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Fpvs Lis 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.
Analytics focus
– Fpvs Lis 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 Gabriel Berger, Adrian Darmohraj 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.
Low bargaining power of suppliers
– Suppliers of Fpvs Lis in the sector have low bargaining power. Gas Natural BAN's Strategy for Low-Income Sectors has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fpvs Lis to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Fpvs Lis digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fpvs Lis 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.
Highly skilled collaborators
– Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors - 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
– Fpvs Lis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gas Natural BAN's Strategy for Low-Income Sectors 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.
Weaknesses Gas Natural BAN's Strategy for Low-Income Sectors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gas Natural BAN's Strategy for Low-Income Sectors are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors, is just above the industry average. Fpvs Lis 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 bargaining power of channel partners
– Because of the regulatory requirements, Gabriel Berger, Adrian Darmohraj suggests that, Fpvs Lis 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.
Skills based hiring
– The stress on hiring functional specialists at Fpvs Lis has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High 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 Fpvs Lis supply chain. Even after few cautionary changes mentioned in the HBR case study - Gas Natural BAN's Strategy for Low-Income Sectors, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fpvs Lis vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Gas Natural BAN's Strategy for Low-Income Sectors HBR case study mentions - Fpvs Lis 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.
Products dominated business model
– Even though Fpvs Lis 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 - Gas Natural BAN's Strategy for Low-Income Sectors should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Fpvs Lis is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fpvs Lis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fpvs Lis to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors, it seems that the employees of Fpvs Lis 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.
Lack of clear differentiation of Fpvs Lis products
– To increase the profitability and margins on the products, Fpvs Lis needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Fpvs Lis, firm in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Fpvs Lis 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.
Opportunities Gas Natural BAN's Strategy for Low-Income Sectors | 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 Gas Natural BAN's Strategy for Low-Income Sectors are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fpvs Lis is facing challenges because of the dominance of functional experts in the organization. Gas Natural BAN's Strategy for Low-Income Sectors case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Fpvs Lis 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.
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. Fpvs Lis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Fpvs Lis to increase its market reach. Fpvs Lis 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.
Manufacturing automation
– Fpvs Lis can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Leveraging digital technologies
– Fpvs Lis 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fpvs Lis 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 Fpvs Lis 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Fpvs Lis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fpvs Lis 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 Fpvs Lis 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.
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 Fpvs Lis in the consumer business. Now Fpvs Lis can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Fpvs Lis has opened avenues for new revenue streams for the organization in the industry. This can help Fpvs Lis to build a more holistic ecosystem as suggested in the Gas Natural BAN's Strategy for Low-Income Sectors case study. Fpvs Lis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Fpvs Lis 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. Fpvs Lis 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.
Threats Gas Natural BAN's Strategy for Low-Income Sectors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fpvs Lis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Fpvs Lis 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.
Increasing wage structure of Fpvs Lis
– 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 Fpvs Lis.
Environmental challenges
– Fpvs Lis 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. Fpvs Lis can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Fpvs Lis is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Fpvs Lis 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.
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 Fpvs Lis.
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. Fpvs Lis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Fpvs Lis business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gas Natural BAN's Strategy for Low-Income Sectors, Fpvs Lis may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Fpvs Lis 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.
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 Gas Natural BAN's Strategy for Low-Income Sectors 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 Gas Natural BAN's Strategy for Low-Income Sectors 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 Gas Natural BAN's Strategy for Low-Income Sectors 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 Gas Natural BAN's Strategy for Low-Income Sectors 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 Gas Natural BAN's Strategy for Low-Income Sectors 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 Fpvs Lis needs to make to build a sustainable competitive advantage.
