NAPOCOR Privatization: Power in the Philippines SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of NAPOCOR Privatization: Power in the Philippines
In the summer of 1993, brownouts reached 10 hours a day in Metro Manila, the center of the Philippine economy. Solving the electricity crisis was central to recently elected President Fidel Ramos's plan to transform the Philippines from the "sick man of Asia" to the newest "Asian tiger." This case explores initial efforts to contract out with independent power producers for generation and, in 1996, proposals by NAPOCOR President Delgado to privatize completely the generation and distribution of power. NAPOCOR was the largest company in the country, measured by asset value. Asks the reader to help Delgado find a way between the demands of restructuring and privatization. Three issues remain to be resolved: How many firms should be created from the government-owned monopoly? How much of NAPOCOR's output should be tied to distributors in long-term contracts before privatization? and, Should distribution companies be allowed to own and operate generation plants?
Authors :: Alexander Dyck, Nonito R. Bernardo Jr., John F. McGuire
Swot Analysis of "NAPOCOR Privatization: Power in the Philippines" written by Alexander Dyck, Nonito R. Bernardo Jr., John F. McGuire includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Napocor Delgado facing as an external strategic factors. Some of the topics covered in NAPOCOR Privatization: Power in the Philippines case study are - Strategic Management Strategies, Negotiations and Global Business.
Some of the macro environment factors that can be used to understand the NAPOCOR Privatization: Power in the Philippines casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of NAPOCOR Privatization: Power in the Philippines
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in NAPOCOR Privatization: Power in the Philippines case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Napocor Delgado, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines can be done for the following purposes –
1. Strategic planning using facts provided in NAPOCOR Privatization: Power in the Philippines case study
2. Improving business portfolio management of Napocor Delgado
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Napocor Delgado
Strengths NAPOCOR Privatization: Power in the Philippines | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Napocor Delgado in NAPOCOR Privatization: Power in the Philippines Harvard Business Review case study are -
Ability to recruit top talent
– Napocor Delgado is one of the leading recruiters in the industry. Managers in the NAPOCOR Privatization: Power in the Philippines are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Napocor Delgado in the sector have low bargaining power. NAPOCOR Privatization: Power in the Philippines has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Napocor Delgado to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Napocor Delgado 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
– Napocor Delgado is one of the most innovative firm in sector. Manager in NAPOCOR Privatization: Power in the Philippines Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Napocor Delgado 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 Napocor Delgado is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in NAPOCOR Privatization: Power in the Philippines Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Napocor Delgado 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 Alexander Dyck, Nonito R. Bernardo Jr., John F. McGuire 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.
Effective Research and Development (R&D)
– Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Napocor Delgado is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Napocor Delgado in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Napocor Delgado has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Napocor Delgado to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Napocor Delgado has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Napocor Delgado 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Napocor Delgado digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Napocor Delgado 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.
Weaknesses NAPOCOR Privatization: Power in the Philippines | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NAPOCOR Privatization: Power in the Philippines are -
High cash cycle compare to competitors
Napocor Delgado 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.
Slow decision making process
– As mentioned earlier in the report, Napocor Delgado 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. Napocor Delgado 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.
Skills based hiring
– The stress on hiring functional specialists at Napocor Delgado 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.
Low market penetration in new markets
– Outside its home market of Napocor Delgado, firm in the HBR case study NAPOCOR Privatization: Power in the Philippines needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Napocor Delgado products
– To increase the profitability and margins on the products, Napocor Delgado needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study NAPOCOR Privatization: Power in the Philippines, is just above the industry average. Napocor Delgado 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Napocor Delgado is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study NAPOCOR Privatization: Power in the Philippines can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study NAPOCOR Privatization: Power in the Philippines 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 Napocor Delgado 's lucrative customers.
Interest costs
– Compare to the competition, Napocor Delgado 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.
No frontier risks strategy
– After analyzing the HBR case study NAPOCOR Privatization: Power in the Philippines, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Need for greater diversity
– Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines | 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 NAPOCOR Privatization: Power in the Philippines are -
Learning at scale
– Online learning technologies has now opened space for Napocor Delgado 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.
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. Napocor Delgado 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 Napocor Delgado has opened avenues for new revenue streams for the organization in the industry. This can help Napocor Delgado to build a more holistic ecosystem as suggested in the NAPOCOR Privatization: Power in the Philippines case study. Napocor Delgado can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Napocor Delgado can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Using analytics as competitive advantage
– Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Napocor Delgado to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Napocor Delgado in the consumer business. Now Napocor Delgado can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Napocor Delgado 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. Napocor Delgado 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.
Buying journey improvements
– Napocor Delgado can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. NAPOCOR Privatization: Power in the Philippines 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
– Napocor Delgado can develop new processes and procedures in Global Business 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.
Loyalty marketing
– Napocor Delgado 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Napocor Delgado 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Napocor Delgado 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 Napocor Delgado to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Napocor Delgado in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Threats NAPOCOR Privatization: Power in the Philippines External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study NAPOCOR Privatization: Power in the Philippines are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Napocor Delgado in the Global Business industry. The Global Business 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.
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.
Increasing wage structure of Napocor Delgado
– 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 Napocor Delgado.
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 Napocor Delgado in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Napocor Delgado 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Napocor Delgado can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Napocor Delgado 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, Napocor Delgado 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 NAPOCOR Privatization: Power in the Philippines .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Napocor Delgado with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Napocor Delgado.
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. Napocor Delgado will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Napocor Delgado has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Napocor Delgado needs to keep up with the evolution of technology in the Global Business 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.
Weighted SWOT Analysis of NAPOCOR Privatization: Power in the Philippines 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 NAPOCOR Privatization: Power in the Philippines 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 NAPOCOR Privatization: Power in the Philippines 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 NAPOCOR Privatization: Power in the Philippines 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 NAPOCOR Privatization: Power in the Philippines 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 Napocor Delgado needs to make to build a sustainable competitive advantage.
