Swot Analysis of "Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider" written by Krishna G. Palepu, Elena Corsi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bulb Light facing as an external strategic factors. Some of the topics covered in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing commodity prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bulb Light, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bulb Light 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider can be done for the following purposes –
1. Strategic planning using facts provided in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider case study
2. Improving business portfolio management of Bulb Light
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 Bulb Light
Strengths Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bulb Light in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider firm has clearly differentiated products in the market place. This has enabled Bulb Light to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bulb Light to invest into research and development (R&D) and innovation.
Organizational Resilience of Bulb Light
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bulb Light does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Bulb Light 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
– Bulb Light has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bulb Light 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.
Ability to recruit top talent
– Bulb Light is one of the leading recruiters in the industry. Managers in the Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Bulb Light in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Bulb Light is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Bulb Light is present in almost all the verticals within the industry. This has provided firm in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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.
Ability to lead change in Strategy & Execution field
– Bulb Light 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 Bulb Light in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Bulb Light has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bulb Light to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Bulb Light 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 Krishna G. Palepu, Elena Corsi 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.
Learning organization
- Bulb Light 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 Bulb Light is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider are -
Aligning sales with marketing
– It come across in the case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider can leverage the sales team experience to cultivate customer relationships as Bulb Light is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Bulb Light needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Bulb Light has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Bulb Light, firm in the HBR case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Bulb Light supply chain. Even after few cautionary changes mentioned in the HBR case study - Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bulb Light vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bulb Light is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Bulb Light 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.
Slow to strategic competitive environment developments
– As Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider HBR case study mentions - Bulb Light 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.
Slow decision making process
– As mentioned earlier in the report, Bulb Light 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. Bulb Light 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.
Skills based hiring
– The stress on hiring functional specialists at Bulb Light has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider | 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bulb Light 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 Bulb Light 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. Bulb Light can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Bulb Light has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Bulb Light 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bulb Light can use these opportunities to build new business models that can help the communities that Bulb Light operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bulb Light 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 Bulb Light 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. Bulb Light 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. Bulb Light 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, Bulb Light 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, Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Bulb Light 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.
Creating value in data economy
– The success of analytics program of Bulb Light has opened avenues for new revenue streams for the organization in the industry. This can help Bulb Light to build a more holistic ecosystem as suggested in the Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider case study. Bulb Light can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bulb Light 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.
Buying journey improvements
– Bulb Light can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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.
Threats Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider are -
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 Bulb Light.
Stagnating economy with rate increase
– Bulb Light 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bulb Light 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider .
Increasing wage structure of Bulb Light
– 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 Bulb Light.
Environmental challenges
– Bulb Light 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. Bulb Light can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Bulb Light 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.
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. Bulb Light 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider, Bulb Light 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 .
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 Bulb Light in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Bulb Light 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.
High dependence on third party suppliers
– Bulb Light 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.
Shortening product life cycle
– it is one of the major threat that Bulb Light is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Aura Light: from a Light Bulb Manufacturer to an Energy Savings Solutions Provider 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 Bulb Light needs to make to build a sustainable competitive advantage.
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