Advanced Energy: Programs for Energy Conservation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Advanced Energy: Programs for Energy Conservation

To maximize their effectiveness, color cases should be printed in color.Describes the dilemma facing Advanced Energy (AE), a $6 million nonprofit engaged in energy conservation in North Carolina. Most of the money for its programs comes from a Public Benefits Fund (PBF) enacted by the state legislature. With renewed effort by activists in 2006 to expand AE's role, there was a possibility of the PBF swelling to $50 to $80 million. Naturally, this put AE at conflict with electric utilities wanting to engage in efficiency programs as part of their overall business offering. Includes color exhibits.

Authors :: V. Kasturi Rangan, Brooke Barton

Topics :: Strategy & Execution

Tags :: Government, International business, Social enterprise, Strategy, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Advanced Energy: Programs for Energy Conservation" written by V. Kasturi Rangan, Brooke Barton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pbf Ae facing as an external strategic factors. Some of the topics covered in Advanced Energy: Programs for Energy Conservation case study are - Strategic Management Strategies, Government, International business, Social enterprise, Strategy, Sustainability and Strategy & Execution.

Some of the macro environment factors that can be used to understand the Advanced Energy: Programs for Energy Conservation casestudy better are - – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is backlash against globalization, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, etc

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Introduction to SWOT Analysis of Advanced Energy: Programs for Energy Conservation

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Advanced Energy: Programs for Energy Conservation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pbf Ae, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pbf Ae 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 Advanced Energy: Programs for Energy Conservation can be done for the following purposes –
1. Strategic planning using facts provided in Advanced Energy: Programs for Energy Conservation case study
2. Improving business portfolio management of Pbf Ae
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 Pbf Ae

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Strengths Advanced Energy: Programs for Energy Conservation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Pbf Ae in Advanced Energy: Programs for Energy Conservation Harvard Business Review case study are -

Analytics focus

– Pbf Ae 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 V. Kasturi Rangan, Brooke Barton 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.

Sustainable margins compare to other players in Strategy & Execution industry

– Advanced Energy: Programs for Energy Conservation firm has clearly differentiated products in the market place. This has enabled Pbf Ae to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Pbf Ae to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Pbf Ae has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pbf Ae 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.

Cross disciplinary teams

– Horizontal connected teams at the Pbf Ae are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Effective Research and Development (R&D)

– Pbf Ae 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 Advanced Energy: Programs for Energy Conservation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Pbf Ae is present in almost all the verticals within the industry. This has provided firm in Advanced Energy: Programs for Energy Conservation 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.

Low bargaining power of suppliers

– Suppliers of Pbf Ae in the sector have low bargaining power. Advanced Energy: Programs for Energy Conservation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pbf Ae 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 Pbf Ae digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pbf Ae 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.

Ability to recruit top talent

– Pbf Ae is one of the leading recruiters in the industry. Managers in the Advanced Energy: Programs for Energy Conservation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Highly skilled collaborators

– Pbf Ae 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 Advanced Energy: Programs for Energy Conservation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Pbf Ae in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Pbf Ae has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pbf Ae to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses Advanced Energy: Programs for Energy Conservation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Advanced Energy: Programs for Energy Conservation are -

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 Pbf Ae supply chain. Even after few cautionary changes mentioned in the HBR case study - Advanced Energy: Programs for Energy Conservation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pbf Ae vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Advanced Energy: Programs for Energy Conservation, is just above the industry average. Pbf Ae 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Advanced Energy: Programs for Energy Conservation, in the dynamic environment Pbf Ae has struggled to respond to the nimble upstart competition. Pbf Ae 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

– Pbf Ae 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.

Increasing silos among functional specialists

– The organizational structure of Pbf Ae is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Pbf Ae needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pbf Ae 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 Advanced Energy: Programs for Energy Conservation, it seems that the employees of Pbf Ae 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.

Slow decision making process

– As mentioned earlier in the report, Pbf Ae has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Pbf Ae even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Interest costs

– Compare to the competition, Pbf Ae 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 strategic competitive environment developments

– As Advanced Energy: Programs for Energy Conservation HBR case study mentions - Pbf Ae 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, V. Kasturi Rangan, Brooke Barton suggests that, Pbf Ae 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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Advanced Energy: Programs for Energy Conservation 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 Pbf Ae has relatively successful track record of launching new products.

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Opportunities Advanced Energy: Programs for Energy Conservation | 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 Advanced Energy: Programs for Energy Conservation are -

Manufacturing automation

– Pbf Ae 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.

Reforming the budgeting process

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

Buying journey improvements

– Pbf Ae can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Advanced Energy: Programs for Energy Conservation 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.

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. Pbf Ae can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

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

Low interest rates

– Even though inflation is raising its head in most developed economies, Pbf Ae 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Pbf Ae 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.

Learning at scale

– Online learning technologies has now opened space for Pbf Ae 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.

Leveraging digital technologies

– Pbf Ae 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Pbf Ae is facing challenges because of the dominance of functional experts in the organization. Advanced Energy: Programs for Energy Conservation 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.

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. Pbf Ae 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. Pbf Ae 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 Pbf Ae to increase its market reach. Pbf Ae 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.

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 Pbf Ae in the consumer business. Now Pbf Ae can target international markets with far fewer capital restrictions requirements than the existing system.

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Threats Advanced Energy: Programs for Energy Conservation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Advanced Energy: Programs for Energy Conservation are -

Stagnating economy with rate increase

– Pbf Ae 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.

Shortening product life cycle

– it is one of the major threat that Pbf Ae is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Pbf Ae.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Pbf Ae in the Strategy & Execution industry. The Strategy & Execution 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.

Technology acceleration in Forth Industrial Revolution

– Pbf Ae has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Pbf Ae 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.

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. Pbf Ae 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.

Regulatory challenges

– Pbf Ae 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.

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. Pbf Ae can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing wage structure of Pbf Ae

– 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 Pbf Ae.

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. Pbf Ae 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.

High dependence on third party suppliers

– Pbf Ae 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.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pbf Ae in the Strategy & Execution sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of Advanced Energy: Programs for Energy Conservation 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 Advanced Energy: Programs for Energy Conservation 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 Advanced Energy: Programs for Energy Conservation 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 Advanced Energy: Programs for Energy Conservation 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 Advanced Energy: Programs for Energy Conservation 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 Pbf Ae needs to make to build a sustainable competitive advantage.

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