Ecotricity: An Optimal Investment Decision for Electric Highway Expansion SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ecotricity: An Optimal Investment Decision for Electric Highway Expansion
Ecotricity Group Ltd., founded in 1995, had grown to be a major renewable energy utility service provider in the United Kingdom. In 2016, the company wanted to expand its "electric highway"-a network of charging stations for electric vehicles along major U.K. motorways. The expansion plans involved two chargers: Type A chargers, installed in public locations along the motorway, and Type B chargers, installed in suitable home garages owned by Ecotricity customers. To meet the projected traffic flow of electric vehicles in the future, the company needed to optimally expand the number of both types of charging points in each highway zone.This case uses integer programming to determine the optimal number of Type A and Type B chargers that Ecotricity should install to expand its electric highway. The solution is obtained by using Microsoft Excel Solver and interpreting the results. The case also provides a platform for discussing optimal investment strategies, and for considering another topic not emphasized extensively in the case-how an operational strategy affects image building. Magesh Nagarajan is affiliated with Coventry University. Kanaka Balasubramanian is affiliated with Chetana's Institute of Management & Research. Jagannadha Tamvada is affiliated with University of Southampton.
Swot Analysis of "Ecotricity: An Optimal Investment Decision for Electric Highway Expansion" written by Magesh Nagarajan, Kanaka Balasubramanian, Jagannadha Tamvada includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecotricity Chargers facing as an external strategic factors. Some of the topics covered in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ecotricity: An Optimal Investment Decision for Electric Highway Expansion casestudy better are - – increasing commodity prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Ecotricity: An Optimal Investment Decision for Electric Highway Expansion
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecotricity Chargers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecotricity Chargers 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion can be done for the following purposes –
1. Strategic planning using facts provided in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion case study
2. Improving business portfolio management of Ecotricity Chargers
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ecotricity Chargers
Strengths Ecotricity: An Optimal Investment Decision for Electric Highway Expansion | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecotricity Chargers in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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.
High brand equity
– Ecotricity Chargers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ecotricity Chargers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Ecotricity Chargers 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
– Ecotricity Chargers is present in almost all the verticals within the industry. This has provided firm in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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.
Successful track record of launching new products
– Ecotricity Chargers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ecotricity Chargers 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.
Low bargaining power of suppliers
– Suppliers of Ecotricity Chargers in the sector have low bargaining power. Ecotricity: An Optimal Investment Decision for Electric Highway Expansion has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ecotricity Chargers to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Ecotricity Chargers 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 Magesh Nagarajan, Kanaka Balasubramanian, Jagannadha Tamvada 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 switching costs
– The high switching costs that Ecotricity Chargers 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.
Ability to lead change in Leadership & Managing People field
– Ecotricity Chargers 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 Ecotricity Chargers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ecotricity Chargers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ecotricity Chargers 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.
Innovation driven organization
– Ecotricity Chargers is one of the most innovative firm in sector. Manager in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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
– Ecotricity Chargers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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.
Weaknesses Ecotricity: An Optimal Investment Decision for Electric Highway Expansion | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ecotricity: An Optimal Investment Decision for Electric Highway Expansion are -
Products dominated business model
– Even though Ecotricity Chargers 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 - Ecotricity: An Optimal Investment Decision for Electric Highway Expansion should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Ecotricity Chargers 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. Ecotricity Chargers 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, Ecotricity Chargers 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity Chargers 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Ecotricity Chargers 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion, it seems that the employees of Ecotricity Chargers 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.
Need for greater diversity
– Ecotricity Chargers 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion, is just above the industry average. Ecotricity Chargers 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.
Capital Spending Reduction
– Even during the low interest decade, Ecotricity Chargers 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.
No frontier risks strategy
– After analyzing the HBR case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Increasing silos among functional specialists
– The organizational structure of Ecotricity Chargers is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ecotricity Chargers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecotricity Chargers to focus more on services rather than just following the product oriented approach.
Opportunities Ecotricity: An Optimal Investment Decision for Electric Highway Expansion | 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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. Ecotricity Chargers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ecotricity Chargers can use these opportunities to build new business models that can help the communities that Ecotricity Chargers operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Better consumer reach
– The expansion of the 5G network will help Ecotricity Chargers to increase its market reach. Ecotricity Chargers 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ecotricity Chargers 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 Ecotricity Chargers 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.
Leveraging digital technologies
– Ecotricity Chargers 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 Ecotricity Chargers 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 Ecotricity Chargers to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ecotricity Chargers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Ecotricity Chargers 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 Leadership & Managing People segment.
Using analytics as competitive advantage
– Ecotricity Chargers 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecotricity Chargers 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 Ecotricity Chargers has opened avenues for new revenue streams for the organization in the industry. This can help Ecotricity Chargers to build a more holistic ecosystem as suggested in the Ecotricity: An Optimal Investment Decision for Electric Highway Expansion case study. Ecotricity Chargers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Ecotricity Chargers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ecotricity Chargers is facing challenges because of the dominance of functional experts in the organization. Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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.
Threats Ecotricity: An Optimal Investment Decision for Electric Highway Expansion External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion are -
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. Ecotricity Chargers needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Ecotricity Chargers 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. Ecotricity Chargers can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Ecotricity Chargers 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
– Ecotricity Chargers has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ecotricity Chargers needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Consumer confidence and its impact on Ecotricity Chargers 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.
Regulatory challenges
– Ecotricity Chargers 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 Leadership & Managing People industry regulations.
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 Ecotricity Chargers business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecotricity Chargers 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 Ecotricity Chargers in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Ecotricity Chargers
– 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 Ecotricity Chargers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ecotricity: An Optimal Investment Decision for Electric Highway Expansion, Ecotricity Chargers may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ecotricity Chargers in the Leadership & Managing People industry. The Leadership & Managing People 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.
Shortening product life cycle
– it is one of the major threat that Ecotricity Chargers is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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 Ecotricity Chargers needs to make to build a sustainable competitive advantage.
