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 - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing energy prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, 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 -
Superior customer experience
– The customer experience strategy of Ecotricity Chargers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Organizational Resilience of Ecotricity Chargers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ecotricity Chargers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Ecotricity: An Optimal Investment Decision for Electric Highway Expansion firm has clearly differentiated products in the market place. This has enabled Ecotricity Chargers to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ecotricity Chargers to invest into research and development (R&D) and innovation.
Learning organization
- Ecotricity Chargers 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 Ecotricity Chargers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ecotricity: An Optimal Investment Decision for Electric Highway Expansion Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Highly skilled collaborators
– Ecotricity Chargers 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 Ecotricity: An Optimal Investment Decision for Electric Highway Expansion HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
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.
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.
Slow to strategic competitive environment developments
– As Ecotricity: An Optimal Investment Decision for Electric Highway Expansion HBR case study mentions - Ecotricity Chargers 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ecotricity Chargers 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.
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.
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.
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.
High cash cycle compare to competitors
Ecotricity Chargers has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Magesh Nagarajan, Kanaka Balasubramanian, Jagannadha Tamvada suggests that, Ecotricity Chargers is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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 -
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.
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.
Loyalty marketing
– Ecotricity Chargers 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ecotricity Chargers 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. Ecotricity Chargers 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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ecotricity Chargers in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Buying journey improvements
– Ecotricity Chargers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ecotricity: An Optimal Investment Decision for Electric Highway Expansion 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.
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.
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 -
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.
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.
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 .
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.
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.
High dependence on third party suppliers
– Ecotricity Chargers 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.
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.
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.
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.
Stagnating economy with rate increase
– Ecotricity Chargers 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.
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.
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.
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.
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.