DONG Energy: Clean and Reliable Energy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of DONG Energy: Clean and Reliable Energy
To maximize their effectiveness, color cases should be printed in color.The head of Denmark's largest energy group pondered how to use their limited resources to advance the delivery of clean and reliable energy. The Danish State owned DONG Energy had started life as an importer and trader of gas and oil. Under the leadership of the current CEO, Anders Eldrup, the company had become an energy group, present in all steps of the gas and oil value chain and particular, in the EU market leader in offshore wind energy. As a developer and operator of wind farms, it was one of the world's leaders. In 2011, the company faced several strategic questions including whether and where they should continue investing in offshore wind and how to identify the next key growth businesses of the future.
Swot Analysis of "DONG Energy: Clean and Reliable Energy" written by Joseph L. Bower, Elena Corsi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Energy Wind facing as an external strategic factors. Some of the topics covered in DONG Energy: Clean and Reliable Energy case study are - Strategic Management Strategies, Financial management, Government, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the DONG Energy: Clean and Reliable Energy casestudy better are - – technology disruption, there is backlash against globalization, geopolitical disruptions, increasing transportation and logistics costs, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of DONG Energy: Clean and Reliable Energy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DONG Energy: Clean and Reliable Energy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Energy Wind, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Energy Wind 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 DONG Energy: Clean and Reliable Energy can be done for the following purposes –
1. Strategic planning using facts provided in DONG Energy: Clean and Reliable Energy case study
2. Improving business portfolio management of Energy Wind
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 Energy Wind
Strengths DONG Energy: Clean and Reliable Energy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Energy Wind in DONG Energy: Clean and Reliable Energy Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Energy Wind 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 Wind in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Energy Wind is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Energy Wind has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Energy Wind to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Energy Wind has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DONG Energy: Clean and Reliable Energy 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.
Sustainable margins compare to other players in Strategy & Execution industry
– DONG Energy: Clean and Reliable Energy firm has clearly differentiated products in the market place. This has enabled Energy Wind to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Energy Wind to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Energy Wind 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 Energy Wind 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 Wind has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Energy Wind 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.
Organizational Resilience of Energy Wind
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Energy Wind does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Energy Wind 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 Energy Wind is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DONG Energy: Clean and Reliable Energy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Energy Wind is one of the leading recruiters in the industry. Managers in the DONG Energy: Clean and Reliable Energy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Energy Wind 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 DONG Energy: Clean and Reliable Energy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses DONG Energy: Clean and Reliable Energy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DONG Energy: Clean and Reliable Energy are -
Products dominated business model
– Even though Energy Wind 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 - DONG Energy: Clean and Reliable Energy should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DONG Energy: Clean and Reliable Energy, it seems that the employees of Energy Wind 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.
High cash cycle compare to competitors
Energy Wind 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.
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 Wind supply chain. Even after few cautionary changes mentioned in the HBR case study - DONG Energy: Clean and Reliable Energy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Energy Wind vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DONG Energy: Clean and Reliable Energy, is just above the industry average. Energy Wind 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.
Low market penetration in new markets
– Outside its home market of Energy Wind, firm in the HBR case study DONG Energy: Clean and Reliable Energy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Energy Wind 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. Energy Wind 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.
High operating costs
– Compare to the competitors, firm in the HBR case study DONG Energy: Clean and Reliable Energy 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 Wind 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Energy Wind is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DONG Energy: Clean and Reliable Energy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Energy Wind 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.
Lack of clear differentiation of Energy Wind products
– To increase the profitability and margins on the products, Energy Wind needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities DONG Energy: Clean and Reliable Energy | 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 DONG Energy: Clean and Reliable Energy are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Energy Wind 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 Wind to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Energy Wind can use these opportunities to build new business models that can help the communities that Energy Wind operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Energy Wind 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Energy Wind is facing challenges because of the dominance of functional experts in the organization. DONG Energy: Clean and Reliable Energy 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.
Learning at scale
– Online learning technologies has now opened space for Energy Wind 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.
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. Energy Wind can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Wind can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Energy Wind can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DONG Energy: Clean and Reliable Energy 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.
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. Energy Wind 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 Wind 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, Energy Wind 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, DONG Energy: Clean and Reliable Energy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Energy Wind 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.
Building a culture of innovation
– managers at Energy Wind 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Energy Wind in the consumer business. Now Energy Wind can target international markets with far fewer capital restrictions requirements than the existing system.
Threats DONG Energy: Clean and Reliable Energy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DONG Energy: Clean and Reliable Energy are -
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 Wind needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Energy Wind 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.
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 Energy Wind in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Shortening product life cycle
– it is one of the major threat that Energy Wind is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Energy Wind 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.
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 Wind.
High dependence on third party suppliers
– Energy Wind 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.
Consumer confidence and its impact on Energy Wind 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.
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. Energy Wind can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DONG Energy: Clean and Reliable Energy, Energy Wind 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 .
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 Wind business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Energy Wind 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 Wind can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of DONG Energy: Clean and Reliable Energy 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 DONG Energy: Clean and Reliable Energy 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 DONG Energy: Clean and Reliable Energy 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 DONG Energy: Clean and Reliable Energy 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 DONG Energy: Clean and Reliable Energy 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 Wind needs to make to build a sustainable competitive advantage.
