Gas Natural BAN's Strategy for Low-Income Sectors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Gas Natural BAN's Strategy for Low-Income Sectors
This case focuses on Gas Natural BAN's network expansion project to provide natural gas to five low-income neighborhoods in the suburban area of Buenos Aires. It shows how a business model evolved to serve low-income sector (henceforth, LIS) customers, and, more particularly, it describes how the company partnered with a local CSO, FundaciA?n Pro Vivienda Social (Foundation for Social Housing, henceforth FPVS), and learned how to work with these communities in a project carried out in Moreno's Cuartel V. Starting with the project carried out with FPVS, the company had begun to pursue natural gas network expansion projects for LIS neighborhoods with a business approach that differed from the scheme used with conventional customers. At the juncture depicted by this case, the company needs to set the guidelines for its natural gas network expansion strategy targeting LIS neighborhoods. Gas Natural BAN's experience with FPVS, though viewed as successful by the company, registered some inefficiencies that prevented its large-scale application and led management to look for new options to pursue its LIS strategy. As a result, the FPVS collaboration model and its potential for optimization were questioned. It was also questionable whether the scheme used by FPVS in Moreno's Cuartel V would be applicable to other neighborhoods with different conditions. This teaching case deals primarily with the development of inclusive business models based on cross-sector collaborations involving companies, nonprofits and citizens. It may be used in graduate courses on Business and Society, Corporate Social Responsibility or Business Strategy including BOP issues.
Swot Analysis of "Gas Natural BAN's Strategy for Low-Income Sectors" written by Gabriel Berger, Adrian Darmohraj includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fpvs Lis facing as an external strategic factors. Some of the topics covered in Gas Natural BAN's Strategy for Low-Income Sectors case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Gas Natural BAN's Strategy for Low-Income Sectors casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Gas Natural BAN's Strategy for Low-Income Sectors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Gas Natural BAN's Strategy for Low-Income Sectors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fpvs Lis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fpvs Lis operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Gas Natural BAN's Strategy for Low-Income Sectors can be done for the following purposes –
1. Strategic planning using facts provided in Gas Natural BAN's Strategy for Low-Income Sectors case study
2. Improving business portfolio management of Fpvs Lis
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fpvs Lis
Strengths Gas Natural BAN's Strategy for Low-Income Sectors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fpvs Lis in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study are -
Highly skilled collaborators
– Fpvs Lis has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Gas Natural BAN's Strategy for Low-Income Sectors HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Fpvs Lis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Fpvs Lis is present in almost all the verticals within the industry. This has provided firm in Gas Natural BAN's Strategy for Low-Income Sectors 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.
Cross disciplinary teams
– Horizontal connected teams at the Fpvs Lis 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.
Learning organization
- Fpvs Lis is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Fpvs Lis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Strategy & Execution industry
– Gas Natural BAN's Strategy for Low-Income Sectors firm has clearly differentiated products in the market place. This has enabled Fpvs Lis to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Fpvs Lis to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Fpvs Lis is one of the leading recruiters in the industry. Managers in the Gas Natural BAN's Strategy for Low-Income Sectors are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Fpvs Lis is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Gabriel Berger, Adrian Darmohraj can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Fpvs Lis in the sector have low bargaining power. Gas Natural BAN's Strategy for Low-Income Sectors has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fpvs Lis to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Fpvs Lis digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fpvs Lis has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Fpvs Lis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fpvs Lis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Fpvs Lis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fpvs Lis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Gas Natural BAN's Strategy for Low-Income Sectors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gas Natural BAN's Strategy for Low-Income Sectors are -
Interest costs
– Compare to the competition, Fpvs Lis has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors, it seems that the employees of Fpvs Lis don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Aligning sales with marketing
– It come across in the case study Gas Natural BAN's Strategy for Low-Income Sectors 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 Gas Natural BAN's Strategy for Low-Income Sectors can leverage the sales team experience to cultivate customer relationships as Fpvs Lis is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors, 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.
Capital Spending Reduction
– Even during the low interest decade, Fpvs Lis 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fpvs Lis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Gas Natural BAN's Strategy for Low-Income Sectors 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Gas Natural BAN's Strategy for Low-Income Sectors 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 Fpvs Lis has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Fpvs Lis 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors, is just above the industry average. Fpvs Lis needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Fpvs Lis products
– To increase the profitability and margins on the products, Fpvs Lis needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Fpvs Lis 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.
Opportunities Gas Natural BAN's Strategy for Low-Income Sectors | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Gas Natural BAN's Strategy for Low-Income Sectors are -
Developing new processes and practices
– Fpvs Lis 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fpvs Lis in the consumer business. Now Fpvs Lis can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Fpvs Lis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Fpvs Lis to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fpvs Lis can use these opportunities to build new business models that can help the communities that Fpvs Lis operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fpvs Lis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Fpvs Lis to increase its market reach. Fpvs Lis will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Fpvs Lis 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fpvs Lis 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, Gas Natural BAN's Strategy for Low-Income Sectors, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fpvs Lis 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.
Using analytics as competitive advantage
– Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fpvs Lis to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fpvs Lis is facing challenges because of the dominance of functional experts in the organization. Gas Natural BAN's Strategy for Low-Income Sectors case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fpvs Lis to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Fpvs Lis to hire the very best people irrespective of their geographical location.
Threats Gas Natural BAN's Strategy for Low-Income Sectors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors are -
Environmental challenges
– Fpvs Lis needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fpvs Lis can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Gas Natural BAN's Strategy for Low-Income Sectors, Fpvs Lis may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Fpvs Lis demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fpvs Lis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fpvs Lis.
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. Fpvs Lis needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fpvs Lis can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Gas Natural BAN's Strategy for Low-Income Sectors .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Fpvs Lis business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Fpvs Lis has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fpvs Lis 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. Fpvs Lis 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
– Fpvs Lis 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.
Weighted SWOT Analysis of Gas Natural BAN's Strategy for Low-Income Sectors Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Gas Natural BAN's Strategy for Low-Income Sectors needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Gas Natural BAN's Strategy for Low-Income Sectors is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Gas Natural BAN's Strategy for Low-Income Sectors is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Gas Natural BAN's Strategy for Low-Income Sectors is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Fpvs Lis needs to make to build a sustainable competitive advantage.