Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?
Shortly after presenting its new asset-light strategy involving the division of its operating structure into three separate entities, Abengoa S.A. is faced with a crisis when its stock price drops by half amid investor doubts that the parent company will guarantee a newly issued green bond.
Swot Analysis of "Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?" written by Jordan Mitchell, Ahmad Rahnema includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abengoa S.a facing as an external strategic factors. Some of the topics covered in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? case study are - Strategic Management Strategies, Crisis management, Financial analysis, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? casestudy better are - – there is backlash against globalization, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abengoa S.a, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? can be done for the following purposes –
1. Strategic planning using facts provided in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? case study
2. Improving business portfolio management of Abengoa S.a
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 Abengoa S.a
Strengths Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abengoa S.a in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? Harvard Business Review case study are -
Ability to recruit top talent
– Abengoa S.a is one of the leading recruiters in the industry. Managers in the Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Abengoa S.a is present in almost all the verticals within the industry. This has provided firm in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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.
Training and development
– Abengoa S.a has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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.
High brand equity
– Abengoa S.a has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Abengoa S.a to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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.
Effective Research and Development (R&D)
– Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Abengoa S.a 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 Abengoa S.a is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Abengoa S.a 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.
Successful track record of launching new products
– Abengoa S.a has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abengoa S.a 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.
Analytics focus
– Abengoa S.a 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 Jordan Mitchell, Ahmad Rahnema 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 Abengoa S.a 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.
Highly skilled collaborators
– Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? are -
Products dominated business model
– Even though Abengoa S.a 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 - Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Abengoa S.a products
– To increase the profitability and margins on the products, Abengoa S.a needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Abengoa S.a 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, Jordan Mitchell, Ahmad Rahnema suggests that, Abengoa S.a 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Abengoa S.a is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?, in the dynamic environment Abengoa S.a has struggled to respond to the nimble upstart competition. Abengoa S.a has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? HBR case study mentions - Abengoa S.a takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Interest costs
– Compare to the competition, Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.a 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Abengoa S.a is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Abengoa S.a needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abengoa S.a to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.a has relatively successful track record of launching new products.
Opportunities Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? | 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Abengoa S.a 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.
Using analytics as competitive advantage
– Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abengoa S.a to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Abengoa S.a 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 Finance & Accounting segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Abengoa S.a is facing challenges because of the dominance of functional experts in the organization. Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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.
Leveraging digital technologies
– Abengoa S.a 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abengoa S.a can use these opportunities to build new business models that can help the communities that Abengoa S.a operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abengoa S.a 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 Abengoa S.a 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 Abengoa S.a 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 Abengoa S.a 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.
Developing new processes and practices
– Abengoa S.a can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Abengoa S.a 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.
Better consumer reach
– The expansion of the 5G network will help Abengoa S.a to increase its market reach. Abengoa S.a 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abengoa S.a 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, Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?, 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy?, Abengoa S.a 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 .
Environmental challenges
– Abengoa S.a 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. Abengoa S.a can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abengoa S.a can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abengoa S.a with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Abengoa S.a has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Abengoa S.a needs to keep up with the evolution of technology in the Finance & Accounting 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. Abengoa S.a needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Abengoa S.a 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abengoa S.a 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.
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 Abengoa S.a business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Abengoa S.a 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? .
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 Abengoa S.a.
Weighted SWOT Analysis of Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.A.: The Unveiling or Unraveling of a Bold New Strategy? 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 Abengoa S.a needs to make to build a sustainable competitive advantage.