Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse
In March 2002, during a scheduled refueling outage, workers at FirstEnergy's Davis-Besse nuclear power plant found a football-sized hole in the reactor head caused by boric acid corrosion. Redundant shielding prevented any radiation leakage, but FirstEnergy projected the outage would last two to three months and cost from $15 million to $30 million. Instead, the outage lasted 26 months and cost $588.9 million. Students will learn the financial impact of the event, how investors reacted, and lessons in financial transparency.
Swot Analysis of "Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse" written by Thomas Cross, Brandt Allen, Paul Simko includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Outage Besse facing as an external strategic factors. Some of the topics covered in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse case study are - Strategic Management Strategies, Transparency and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse casestudy better are - – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing energy prices, talent flight as more people leaving formal jobs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Outage Besse, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Outage Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse can be done for the following purposes –
1. Strategic planning using facts provided in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse case study
2. Improving business portfolio management of Outage Besse
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 Outage Besse
Strengths Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Outage Besse in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse Harvard Business Review case study are -
Successful track record of launching new products
– Outage Besse has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Outage Besse 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.
Operational resilience
– The operational resilience strategy in the Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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.
Low bargaining power of suppliers
– Suppliers of Outage Besse in the sector have low bargaining power. Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Outage Besse to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Outage Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Outage Besse is one of the most innovative firm in sector. Manager in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Outage Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Outage Besse digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Outage Besse 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.
Strong track record of project management
– Outage Besse is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Outage Besse is one of the leading recruiters in the industry. Managers in the Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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
– Outage Besse is present in almost all the verticals within the industry. This has provided firm in Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 brand equity
– Outage Besse has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Outage Besse to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Outage Besse 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 Thomas Cross, Brandt Allen, Paul Simko 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.
Weaknesses Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse are -
Increasing silos among functional specialists
– The organizational structure of Outage Besse is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Outage Besse needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Outage Besse to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Outage Besse 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.
Low market penetration in new markets
– Outside its home market of Outage Besse, firm in the HBR case study Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse, it seems that the employees of Outage Besse 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.
Slow to strategic competitive environment developments
– As Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse HBR case study mentions - Outage Besse 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Outage Besse is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse, is just above the industry average. Outage Besse 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
– Outage Besse 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.
High cash cycle compare to competitors
Outage Besse 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Outage Besse has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Outage Besse 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. Outage Besse 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.
Opportunities Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse | 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Outage Besse 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.
Loyalty marketing
– Outage Besse 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Outage Besse 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, Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Outage Besse is facing challenges because of the dominance of functional experts in the organization. Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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.
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. Outage Besse 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. Outage Besse 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. Outage Besse can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Outage Besse 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.
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. Outage Besse can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Outage Besse can use these opportunities to build new business models that can help the communities that Outage Besse operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Using analytics as competitive advantage
– Outage Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Outage Besse to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Outage Besse can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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.
Developing new processes and practices
– Outage Besse 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Outage Besse can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse are -
Regulatory challenges
– Outage Besse 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.
Shortening product life cycle
– it is one of the major threat that Outage Besse is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Outage Besse with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Outage Besse can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Outage Besse needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Outage Besse 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
– Outage Besse 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. Outage Besse can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Outage Besse 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Outage Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse .
Consumer confidence and its impact on Outage Besse 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.
Increasing wage structure of Outage Besse
– 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 Outage Besse.
Stagnating economy with rate increase
– Outage Besse 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.
Weighted SWOT Analysis of Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Financial Impact of U.S. Nuclear Power Plants: FirstEnergy and Davis-Besse 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 Outage Besse needs to make to build a sustainable competitive advantage.