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 - – wage bills are increasing, increasing transportation and logistics costs, technology disruption, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, 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 -
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.
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.
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.
Strong track record of project management
– Fpvs Lis 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
– 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.
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.
Effective Research and Development (R&D)
– Fpvs Lis 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 Gas Natural BAN's Strategy for Low-Income Sectors - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Innovation driven organization
– Fpvs Lis is one of the most innovative firm in sector. Manager in Gas Natural BAN's Strategy for Low-Income Sectors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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 -
High cash cycle compare to competitors
Fpvs Lis 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.
Skills based hiring
– The stress on hiring functional specialists at Fpvs Lis 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.
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.
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.
Slow to strategic competitive environment developments
– As Gas Natural BAN's Strategy for Low-Income Sectors HBR case study mentions - Fpvs Lis 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.
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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Gabriel Berger, Adrian Darmohraj suggests that, Fpvs Lis is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Fpvs Lis is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fpvs Lis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fpvs Lis to focus more on services rather than just following the product oriented approach.
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 -
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. Fpvs Lis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Buying journey improvements
– Fpvs Lis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Gas Natural BAN's Strategy for Low-Income Sectors 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.
Building a culture of innovation
– managers at Fpvs Lis 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.
Leveraging digital technologies
– Fpvs Lis 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.
Creating value in data economy
– The success of analytics program of Fpvs Lis has opened avenues for new revenue streams for the organization in the industry. This can help Fpvs Lis to build a more holistic ecosystem as suggested in the Gas Natural BAN's Strategy for Low-Income Sectors case study. Fpvs Lis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fpvs Lis 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. Fpvs Lis 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.
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.
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.
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.
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 Fpvs Lis 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.
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 -
Stagnating economy with rate increase
– Fpvs Lis 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, 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.
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.
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. Fpvs Lis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Fpvs Lis 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.
Increasing wage structure of Fpvs Lis
– 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 Fpvs Lis.
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.
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.
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.
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 Fpvs Lis in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.