AltaGas Ltd.: Acquisition of Decker Energy International SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AltaGas Ltd.: Acquisition of Decker Energy International
In January 2012, Alberta-based energy infrastructure business, AltaGas Ltd. (AltaGas),was considering the purchase of U.S.-based green energy power producer Decker Energy International, Inc. The move into renewable energy and into the United States would be a departure for AltaGas, which was primarily focused on traditional energy and infrastructure businesses in Canada. The financial lead on the acquisition project was looking at the assumptions provided. His task was to value the U.S. power producer's assets and provide feedback on issues that could affect the deal.
Authors :: Craig Dunbar, Cherise Nielsen, Ken Mark
Swot Analysis of "AltaGas Ltd.: Acquisition of Decker Energy International" written by Craig Dunbar, Cherise Nielsen, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Altagas Energy facing as an external strategic factors. Some of the topics covered in AltaGas Ltd.: Acquisition of Decker Energy International case study are - Strategic Management Strategies, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the AltaGas Ltd.: Acquisition of Decker Energy International casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of AltaGas Ltd.: Acquisition of Decker Energy International
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AltaGas Ltd.: Acquisition of Decker Energy International case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Altagas Energy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Altagas Energy operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of AltaGas Ltd.: Acquisition of Decker Energy International can be done for the following purposes –
1. Strategic planning using facts provided in AltaGas Ltd.: Acquisition of Decker Energy International case study
2. Improving business portfolio management of Altagas Energy
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Altagas Energy
Strengths AltaGas Ltd.: Acquisition of Decker Energy International | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Altagas Energy in AltaGas Ltd.: Acquisition of Decker Energy International Harvard Business Review case study are -
Innovation driven organization
– Altagas Energy is one of the most innovative firm in sector. Manager in AltaGas Ltd.: Acquisition of Decker Energy International Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Altagas Energy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Altagas Energy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Altagas Energy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Altagas Energy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Altagas Energy is present in almost all the verticals within the industry. This has provided firm in AltaGas Ltd.: Acquisition of Decker Energy International 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.
High switching costs
– The high switching costs that Altagas Energy has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Altagas Energy is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Altagas Energy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AltaGas Ltd.: Acquisition of Decker Energy International Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Altagas Energy are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Altagas Energy is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Craig Dunbar, Cherise Nielsen, Ken Mark 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.
Sustainable margins compare to other players in Finance & Accounting industry
– AltaGas Ltd.: Acquisition of Decker Energy International firm has clearly differentiated products in the market place. This has enabled Altagas Energy to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Altagas Energy to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Altagas Energy 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 AltaGas Ltd.: Acquisition of Decker Energy International HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– Altagas Energy is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Altagas Energy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Altagas Energy in the sector have low bargaining power. AltaGas Ltd.: Acquisition of Decker Energy International has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Altagas Energy to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses AltaGas Ltd.: Acquisition of Decker Energy International | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AltaGas Ltd.: Acquisition of Decker Energy International are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AltaGas Ltd.: Acquisition of Decker Energy International 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 Altagas Energy has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Altagas Energy 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Altagas Energy supply chain. Even after few cautionary changes mentioned in the HBR case study - AltaGas Ltd.: Acquisition of Decker Energy International, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Altagas Energy vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study AltaGas Ltd.: Acquisition of Decker Energy International, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Altagas Energy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AltaGas Ltd.: Acquisition of Decker Energy International can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Altagas Energy 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.
Increasing silos among functional specialists
– The organizational structure of Altagas Energy is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Altagas Energy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Altagas Energy to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AltaGas Ltd.: Acquisition of Decker Energy International, in the dynamic environment Altagas Energy has struggled to respond to the nimble upstart competition. Altagas Energy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Altagas Energy 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 strategic competitive environment developments
– As AltaGas Ltd.: Acquisition of Decker Energy International HBR case study mentions - Altagas Energy takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Altagas Energy, firm in the HBR case study AltaGas Ltd.: Acquisition of Decker Energy International needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities AltaGas Ltd.: Acquisition of Decker Energy International | 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 AltaGas Ltd.: Acquisition of Decker Energy International are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Altagas Energy 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, AltaGas Ltd.: Acquisition of Decker Energy International, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Altagas Energy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Altagas Energy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Altagas Energy can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Altagas Energy is facing challenges because of the dominance of functional experts in the organization. AltaGas Ltd.: Acquisition of Decker Energy International 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.
Using analytics as competitive advantage
– Altagas Energy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study AltaGas Ltd.: Acquisition of Decker Energy International - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Altagas Energy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Altagas Energy to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Altagas Energy has opened avenues for new revenue streams for the organization in the industry. This can help Altagas Energy to build a more holistic ecosystem as suggested in the AltaGas Ltd.: Acquisition of Decker Energy International case study. Altagas Energy 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 Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Altagas Energy 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. Altagas Energy 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.
Manufacturing automation
– Altagas Energy can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Loyalty marketing
– Altagas Energy has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Altagas Energy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Altagas Energy in the consumer business. Now Altagas Energy can target international markets with far fewer capital restrictions requirements than the existing system.
Threats AltaGas Ltd.: Acquisition of Decker Energy International External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AltaGas Ltd.: Acquisition of Decker Energy International are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Altagas Energy 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 AltaGas Ltd.: Acquisition of Decker Energy International .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AltaGas Ltd.: Acquisition of Decker Energy International, Altagas Energy may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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 Altagas Energy.
Regulatory challenges
– Altagas Energy 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 Finance & Accounting industry regulations.
Stagnating economy with rate increase
– Altagas Energy can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Altagas Energy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Altagas Energy needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that Altagas Energy is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Altagas Energy 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 Altagas Energy business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Altagas Energy in the Finance & Accounting industry. The Finance & Accounting 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.
Weighted SWOT Analysis of AltaGas Ltd.: Acquisition of Decker Energy International 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 AltaGas Ltd.: Acquisition of Decker Energy International 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 AltaGas Ltd.: Acquisition of Decker Energy International 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 AltaGas Ltd.: Acquisition of Decker Energy International 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 AltaGas Ltd.: Acquisition of Decker Energy International 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 Altagas Energy needs to make to build a sustainable competitive advantage.