IT-Led Business Transformation at Reliance Energy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of IT-Led Business Transformation at Reliance Energy
The takeover of Bombay Suburban Electric Supply Ltd (BSES) in 2003 (eventually renamed Reliance Energy) marked the foray of Reliance Industries Ltd into the power transmission and distribution business. The power sector, plagued by bureaucratic controls and constraints on supply and demand, offered little managerial discretion to alter the traditional drivers of growth and profitability. The case illustrates how Reliance Energy leveraged technology to transform its strategy and operations in order to establish international standards of operational excellence and customer service in the Indian power sector. Students learn about the significant risks in technology-driven transformations and their critical success factors, such as complementary changes in firm structures and business processes. The case is set in 2008, when the Chief Information Officer (CIO) of Reliance Energy is found dwelling over the digital transformation of the company that has led to the decision to spin off the information technology (IT) department into a third-party technology solutions provider for the infrastructure sector. Was the digital transformation of the company a success? What were the lessons learnt from this transformation?
Swot Analysis of "IT-Led Business Transformation at Reliance Energy" written by Deepa Mani, Geetika Shah, Revati Nehru includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Reliance Energy facing as an external strategic factors. Some of the topics covered in IT-Led Business Transformation at Reliance Energy case study are - Strategic Management Strategies, IT, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the IT-Led Business Transformation at Reliance Energy casestudy better are - – increasing energy prices, increasing household debt because of falling income levels, geopolitical disruptions, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of IT-Led Business Transformation at Reliance Energy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IT-Led Business Transformation at Reliance Energy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reliance Energy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reliance Energy 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 IT-Led Business Transformation at Reliance Energy can be done for the following purposes –
1. Strategic planning using facts provided in IT-Led Business Transformation at Reliance Energy case study
2. Improving business portfolio management of Reliance Energy
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 Reliance Energy
Strengths IT-Led Business Transformation at Reliance Energy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reliance Energy in IT-Led Business Transformation at Reliance Energy Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Reliance Energy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Reliance Energy in the sector have low bargaining power. IT-Led Business Transformation at Reliance Energy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Reliance Energy to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– IT-Led Business Transformation at Reliance Energy firm has clearly differentiated products in the market place. This has enabled Reliance Energy to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Reliance Energy to invest into research and development (R&D) and innovation.
Learning organization
- Reliance Energy 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 Reliance Energy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in IT-Led Business Transformation at Reliance Energy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Reliance Energy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reliance Energy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Reliance Energy 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 Reliance Energy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Reliance Energy 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 Deepa Mani, Geetika Shah, Revati Nehru 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.
High switching costs
– The high switching costs that Reliance Energy 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.
Cross disciplinary teams
– Horizontal connected teams at the Reliance Energy 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.
Innovation driven organization
– Reliance Energy is one of the most innovative firm in sector. Manager in IT-Led Business Transformation at Reliance Energy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Reliance Energy is one of the leading recruiters in the industry. Managers in the IT-Led Business Transformation at Reliance 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.
Successful track record of launching new products
– Reliance Energy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reliance Energy 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.
Weaknesses IT-Led Business Transformation at Reliance Energy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IT-Led Business Transformation at Reliance Energy are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study IT-Led Business Transformation at Reliance Energy, in the dynamic environment Reliance Energy has struggled to respond to the nimble upstart competition. Reliance Energy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Reliance Energy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study IT-Led Business Transformation at Reliance 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.
Increasing silos among functional specialists
– The organizational structure of Reliance Energy is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Reliance Energy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reliance Energy to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study IT-Led Business Transformation at Reliance Energy 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 IT-Led Business Transformation at Reliance Energy can leverage the sales team experience to cultivate customer relationships as Reliance Energy is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As IT-Led Business Transformation at Reliance Energy HBR case study mentions - Reliance Energy 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, Reliance Energy 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. Reliance Energy 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.
Need for greater diversity
– Reliance Energy 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.
Low market penetration in new markets
– Outside its home market of Reliance Energy, firm in the HBR case study IT-Led Business Transformation at Reliance Energy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IT-Led Business Transformation at Reliance Energy 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 Reliance Energy has relatively successful track record of launching new products.
High cash cycle compare to competitors
Reliance Energy 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.
Products dominated business model
– Even though Reliance Energy 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 - IT-Led Business Transformation at Reliance Energy should strive to include more intangible value offerings along with its core products and services.
Opportunities IT-Led Business Transformation at Reliance 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 IT-Led Business Transformation at Reliance Energy are -
Loyalty marketing
– Reliance Energy 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.
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 Reliance Energy 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.
Manufacturing automation
– Reliance Energy 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.
Better consumer reach
– The expansion of the 5G network will help Reliance Energy to increase its market reach. Reliance Energy 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.
Leveraging digital technologies
– Reliance Energy can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reliance Energy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Reliance Energy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Reliance Energy 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Reliance Energy 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reliance Energy can use these opportunities to build new business models that can help the communities that Reliance Energy operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reliance Energy 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.
Building a culture of innovation
– managers at Reliance Energy 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.
Using analytics as competitive advantage
– Reliance Energy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study IT-Led Business Transformation at Reliance Energy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Reliance Energy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats IT-Led Business Transformation at Reliance Energy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IT-Led Business Transformation at Reliance Energy are -
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.
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 Reliance Energy business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Reliance Energy 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.
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 Reliance Energy.
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.
Stagnating economy with rate increase
– Reliance Energy 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Reliance Energy 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study IT-Led Business Transformation at Reliance Energy, Reliance Energy 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 .
Environmental challenges
– Reliance Energy 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. Reliance Energy can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Reliance Energy needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Reliance Energy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Reliance Energy has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Reliance Energy 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.
Increasing wage structure of Reliance Energy
– 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 Reliance Energy.
Weighted SWOT Analysis of IT-Led Business Transformation at Reliance 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 IT-Led Business Transformation at Reliance 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 IT-Led Business Transformation at Reliance 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 IT-Led Business Transformation at Reliance 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 IT-Led Business Transformation at Reliance 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 Reliance Energy needs to make to build a sustainable competitive advantage.