Schneider Electric: Becoming the Global Specialist in Energy Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Schneider Electric: Becoming the Global Specialist in Energy Management
Global electrical products company assesses growth and market demands in India. Company must decide between a products acquisition or developing a service business. Students need to be aware of different country conditions, demands on implementation of different strategies, impact on culture. Also discusses energy performance contracting in the context of making India energy generation capability more efficient.
Swot Analysis of "Schneider Electric: Becoming the Global Specialist in Energy Management" written by John D. Macomber, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Energy Demands facing as an external strategic factors. Some of the topics covered in Schneider Electric: Becoming the Global Specialist in Energy Management case study are - Strategic Management Strategies, Collaboration, Globalization, Marketing, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Schneider Electric: Becoming the Global Specialist in Energy Management casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Schneider Electric: Becoming the Global Specialist in Energy Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Schneider Electric: Becoming the Global Specialist in Energy Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Energy Demands, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management can be done for the following purposes –
1. Strategic planning using facts provided in Schneider Electric: Becoming the Global Specialist in Energy Management case study
2. Improving business portfolio management of Energy Demands
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 Energy Demands
Strengths Schneider Electric: Becoming the Global Specialist in Energy Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Energy Demands in Schneider Electric: Becoming the Global Specialist in Energy Management Harvard Business Review case study are -
Strong track record of project management
– Energy Demands is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Energy Demands has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Operational resilience
– The operational resilience strategy in the Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Energy Demands digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Energy Demands 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.
Learning organization
- Energy Demands 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 Energy Demands is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Schneider Electric: Becoming the Global Specialist in Energy Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Finance & Accounting industry
– Schneider Electric: Becoming the Global Specialist in Energy Management firm has clearly differentiated products in the market place. This has enabled Energy Demands to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Energy Demands to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Energy Demands in the sector have low bargaining power. Schneider Electric: Becoming the Global Specialist in Energy Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Energy Demands to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Energy Demands is one of the leading recruiters in the industry. Managers in the Schneider Electric: Becoming the Global Specialist in Energy Management are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Energy Demands in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Energy Demands 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.
High switching costs
– The high switching costs that Energy Demands 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.
Diverse revenue streams
– Energy Demands is present in almost all the verticals within the industry. This has provided firm in Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Weaknesses Schneider Electric: Becoming the Global Specialist in Energy Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Schneider Electric: Becoming the Global Specialist in Energy Management are -
High operating costs
– Compare to the competitors, firm in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management 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 Energy Demands 's lucrative customers.
Slow to strategic competitive environment developments
– As Schneider Electric: Becoming the Global Specialist in Energy Management HBR case study mentions - Energy Demands 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, Energy Demands 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.
Skills based hiring
– The stress on hiring functional specialists at Energy Demands 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.
Slow decision making process
– As mentioned earlier in the report, Energy Demands 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. Energy Demands 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.
Capital Spending Reduction
– Even during the low interest decade, Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Schneider Electric: Becoming the Global Specialist in Energy Management, in the dynamic environment Energy Demands has struggled to respond to the nimble upstart competition. Energy Demands has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Energy Demands 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Energy Demands supply chain. Even after few cautionary changes mentioned in the HBR case study - Schneider Electric: Becoming the Global Specialist in Energy Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Energy Demands vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Schneider Electric: Becoming the Global Specialist in Energy Management that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Schneider Electric: Becoming the Global Specialist in Energy Management can leverage the sales team experience to cultivate customer relationships as Energy Demands is planning to shift buying processes online.
Opportunities Schneider Electric: Becoming the Global Specialist in Energy Management | 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 Schneider Electric: Becoming the Global Specialist in Energy Management are -
Manufacturing automation
– Energy Demands 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.
Buying journey improvements
– Energy Demands can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Schneider Electric: Becoming the Global Specialist in Energy Management 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Energy Demands 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Energy Demands can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Energy Demands 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.
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. Energy Demands can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Energy Demands has opened avenues for new revenue streams for the organization in the industry. This can help Energy Demands to build a more holistic ecosystem as suggested in the Schneider Electric: Becoming the Global Specialist in Energy Management case study. Energy Demands can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Energy Demands 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
– Energy Demands 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Energy Demands in the consumer business. Now Energy Demands can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Energy Demands 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 Energy Demands to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Energy Demands 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.
Using analytics as competitive advantage
– Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Energy Demands to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Schneider Electric: Becoming the Global Specialist in Energy Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Schneider Electric: Becoming the Global Specialist in Energy Management are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Energy Demands 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 Schneider Electric: Becoming the Global Specialist in Energy Management .
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.
Increasing wage structure of Energy Demands
– 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 Energy Demands.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Schneider Electric: Becoming the Global Specialist in Energy Management, Energy Demands 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 .
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. Energy Demands 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.
Regulatory challenges
– Energy Demands 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Energy Demands 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 Energy Demands business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Energy Demands 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. Energy Demands can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Energy Demands 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.
Stagnating economy with rate increase
– Energy Demands 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.
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. Energy Demands needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Energy Demands is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Schneider Electric: Becoming the Global Specialist in Energy Management 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 Energy Demands needs to make to build a sustainable competitive advantage.
