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 - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, 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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Enel Monopoloy 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.
Effective Research and Development (R&D)
– Enel Monopoloy 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 Innovation @ ENEL: From Monopoloy Power to Open Power - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Innovation driven organization
– Enel Monopoloy is one of the most innovative firm in sector. Manager in Innovation @ ENEL: From Monopoloy Power to Open Power Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Learning organization
- Enel Monopoloy 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 Enel Monopoloy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Innovation @ ENEL: From Monopoloy Power to Open Power Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Enel Monopoloy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Enel Monopoloy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
Skills based hiring
– The stress on hiring functional specialists at Enel Monopoloy 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.
No frontier risks strategy
– After analyzing the HBR case study Innovation @ ENEL: From Monopoloy Power to Open Power, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Enel Monopoloy 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Enel Monopoloy 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.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Enel Monopoloy, firm in the HBR case study Innovation @ ENEL: From Monopoloy Power to Open Power needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
Manufacturing automation
– Enel Monopoloy can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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.
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.
Building a culture of innovation
– managers at Enel Monopoloy 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 Technology & Operations segment.
Better consumer reach
– The expansion of the 5G network will help Enel Monopoloy to increase its market reach. Enel Monopoloy 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.
Using analytics as competitive advantage
– Enel Monopoloy 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 Innovation @ ENEL: From Monopoloy Power to Open Power - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Enel Monopoloy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Enel Monopoloy 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.
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.
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 -
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 Enel Monopoloy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Stagnating economy with rate increase
– Enel Monopoloy 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, 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 .
Increasing wage structure of Enel Monopoloy
– 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 Enel Monopoloy.
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 Enel Monopoloy.
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.
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.
Regulatory challenges
– Enel Monopoloy 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 Technology & Operations industry regulations.
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.
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.