Innovation @ ENEL: From Monopoloy Power to Open Power SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Innovation @ ENEL: From Monopoloy Power to Open Power
Enel is an innovative Italian energy utility that is undergoing rapid change. Technically the company has enthusiastically embraced renewable energy under its new CEO, Francesco Starace. The company is also shifting its business model away from the traditional "cost plus" regulatory model, towards a model built around a variety of value-add services. Open innovation is an important part of this transformation. There are internal barriers to overcome, and new organizational structures required, to manage this change.
Swot Analysis of "Innovation @ ENEL: From Monopoloy Power to Open Power" written by Henry W. Chesbrough includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Enel Monopoloy facing as an external strategic factors. Some of the topics covered in Innovation @ ENEL: From Monopoloy Power to Open Power case study are - Strategic Management Strategies, Competition, IT, Research & development, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the Innovation @ ENEL: From Monopoloy Power to Open Power casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, wage bills are increasing, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Innovation @ ENEL: From Monopoloy Power to Open Power
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation @ ENEL: From Monopoloy Power to Open Power case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Enel Monopoloy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Enel Monopoloy 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 Innovation @ ENEL: From Monopoloy Power to Open Power can be done for the following purposes –
1. Strategic planning using facts provided in Innovation @ ENEL: From Monopoloy Power to Open Power case study
2. Improving business portfolio management of Enel Monopoloy
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Enel Monopoloy
Strengths Innovation @ ENEL: From Monopoloy Power to Open Power | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Enel Monopoloy in Innovation @ ENEL: From Monopoloy Power to Open Power Harvard Business Review case study are -
Successful track record of launching new products
– Enel Monopoloy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Enel Monopoloy 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.
Training and development
– Enel Monopoloy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovation @ ENEL: From Monopoloy Power to Open Power 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.
Operational resilience
– The operational resilience strategy in the Innovation @ ENEL: From Monopoloy Power to Open Power Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Enel Monopoloy 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 Innovation @ ENEL: From Monopoloy Power to Open Power HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Innovation @ ENEL: From Monopoloy Power to Open Power firm has clearly differentiated products in the market place. This has enabled Enel Monopoloy to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Enel Monopoloy to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Enel Monopoloy in the sector have low bargaining power. Innovation @ ENEL: From Monopoloy Power to Open Power has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Enel Monopoloy to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Enel Monopoloy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Enel Monopoloy 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.
Ability to lead change in Technology & Operations field
– Enel Monopoloy 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 Enel Monopoloy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Enel Monopoloy is one of the leading recruiters in the industry. Managers in the Innovation @ ENEL: From Monopoloy Power to Open Power 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 Enel Monopoloy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Enel Monopoloy 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 Henry W. Chesbrough 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 brand equity
– Enel Monopoloy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Enel Monopoloy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Innovation @ ENEL: From Monopoloy Power to Open Power | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation @ ENEL: From Monopoloy Power to Open Power are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Enel Monopoloy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation @ ENEL: From Monopoloy Power to Open Power can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Enel Monopoloy 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 - Innovation @ ENEL: From Monopoloy Power to Open Power should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Innovation @ ENEL: From Monopoloy Power to Open Power 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 Innovation @ ENEL: From Monopoloy Power to Open Power can leverage the sales team experience to cultivate customer relationships as Enel Monopoloy is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Innovation @ ENEL: From Monopoloy Power to Open Power has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Enel Monopoloy 's lucrative customers.
Slow to strategic competitive environment developments
– As Innovation @ ENEL: From Monopoloy Power to Open Power HBR case study mentions - Enel Monopoloy 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.
Interest costs
– Compare to the competition, Enel Monopoloy 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.
Increasing silos among functional specialists
– The organizational structure of Enel Monopoloy is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Enel Monopoloy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Enel Monopoloy to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Enel Monopoloy 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Innovation @ ENEL: From Monopoloy Power to Open Power 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 Enel Monopoloy has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Enel Monopoloy 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. Enel Monopoloy 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Innovation @ ENEL: From Monopoloy Power to Open Power, is just above the industry average. Enel Monopoloy 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.
Opportunities Innovation @ ENEL: From Monopoloy Power to Open Power | 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 Innovation @ ENEL: From Monopoloy Power to Open Power are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Enel Monopoloy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Enel Monopoloy 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. Enel Monopoloy 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Enel Monopoloy is facing challenges because of the dominance of functional experts in the organization. Innovation @ ENEL: From Monopoloy Power to Open Power 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.
Developing new processes and practices
– Enel Monopoloy can develop new processes and procedures in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Enel Monopoloy has opened avenues for new revenue streams for the organization in the industry. This can help Enel Monopoloy to build a more holistic ecosystem as suggested in the Innovation @ ENEL: From Monopoloy Power to Open Power case study. Enel Monopoloy can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Enel Monopoloy 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.
Buying journey improvements
– Enel Monopoloy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Innovation @ ENEL: From Monopoloy Power to Open Power 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Enel Monopoloy 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, Innovation @ ENEL: From Monopoloy Power to Open Power, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Enel Monopoloy 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Enel Monopoloy 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 Enel Monopoloy to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Enel Monopoloy 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.
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 Enel Monopoloy in the consumer business. Now Enel Monopoloy can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Enel Monopoloy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Innovation @ ENEL: From Monopoloy Power to Open Power External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation @ ENEL: From Monopoloy Power to Open Power are -
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Enel Monopoloy 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
– Enel Monopoloy 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.
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
– Enel Monopoloy has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Enel Monopoloy needs to keep up with the evolution of technology in the Technology & Operations 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.
Environmental challenges
– Enel Monopoloy 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. Enel Monopoloy can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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. Enel Monopoloy needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Enel Monopoloy in the Technology & Operations industry. The Technology & Operations 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.
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. Enel Monopoloy 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.
Shortening product life cycle
– it is one of the major threat that Enel Monopoloy is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Enel Monopoloy business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Innovation @ ENEL: From Monopoloy Power to Open Power, Enel Monopoloy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Enel Monopoloy 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 Innovation @ ENEL: From Monopoloy Power to Open Power .
Weighted SWOT Analysis of Innovation @ ENEL: From Monopoloy Power to Open Power 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 Innovation @ ENEL: From Monopoloy Power to Open Power 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 Innovation @ ENEL: From Monopoloy Power to Open Power 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 Innovation @ ENEL: From Monopoloy Power to Open Power 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 Innovation @ ENEL: From Monopoloy Power to Open Power 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 Enel Monopoloy needs to make to build a sustainable competitive advantage.
