Rent-Seeking Behaviour in the Power Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Rent-Seeking Behaviour in the Power Market
Investigates the role of Scheme of Control (SOC) in governing the return of power companies in Hong Kong. In 2002, faced with contractual agreements with the two power companies--CLP and HEC--and with a strong public demand for measures to ease economic pain, the government was caught in the middle on whether to allow the power firms to raise tariffs. Highlights the rent-seeking behavior of various interest groups. Identifies the effects of SOC on the performance of the two power firms. The findings provide a factual base for discussions on government policy and business strategy.
Swot Analysis of "Rent-Seeking Behaviour in the Power Market" written by Pun-Lee Lam, Alexandra Yiu, Ka-Fu Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Soc Power facing as an external strategic factors. Some of the topics covered in Rent-Seeking Behaviour in the Power Market case study are - Strategic Management Strategies, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Rent-Seeking Behaviour in the Power Market casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Rent-Seeking Behaviour in the Power Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Rent-Seeking Behaviour in the Power Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Soc Power, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Soc Power 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 Rent-Seeking Behaviour in the Power Market can be done for the following purposes –
1. Strategic planning using facts provided in Rent-Seeking Behaviour in the Power Market case study
2. Improving business portfolio management of Soc Power
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 Soc Power
Strengths Rent-Seeking Behaviour in the Power Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Soc Power in Rent-Seeking Behaviour in the Power Market Harvard Business Review case study are -
Organizational Resilience of Soc Power
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Soc Power does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Soc Power has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Soc Power 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.
Low bargaining power of suppliers
– Suppliers of Soc Power in the sector have low bargaining power. Rent-Seeking Behaviour in the Power Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Soc Power to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Soc Power has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Soc Power to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Soc Power in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Soc Power is present in almost all the verticals within the industry. This has provided firm in Rent-Seeking Behaviour in the Power Market 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.
Sustainable margins compare to other players in Global Business industry
– Rent-Seeking Behaviour in the Power Market firm has clearly differentiated products in the market place. This has enabled Soc Power to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Soc Power to invest into research and development (R&D) and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Soc Power digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Soc Power 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
- Soc Power 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 Soc Power is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Rent-Seeking Behaviour in the Power Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Global Business field
– Soc Power 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 Soc Power in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Soc Power is one of the leading recruiters in the industry. Managers in the Rent-Seeking Behaviour in the Power Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Soc Power 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 Rent-Seeking Behaviour in the Power Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Rent-Seeking Behaviour in the Power Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rent-Seeking Behaviour in the Power Market are -
Aligning sales with marketing
– It come across in the case study Rent-Seeking Behaviour in the Power Market 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 Rent-Seeking Behaviour in the Power Market can leverage the sales team experience to cultivate customer relationships as Soc Power is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Soc Power 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.
Slow decision making process
– As mentioned earlier in the report, Soc Power 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. Soc Power 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.
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 Soc Power supply chain. Even after few cautionary changes mentioned in the HBR case study - Rent-Seeking Behaviour in the Power Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Soc Power vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Rent-Seeking Behaviour in the Power Market, 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.
High cash cycle compare to competitors
Soc Power 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.
Lack of clear differentiation of Soc Power products
– To increase the profitability and margins on the products, Soc Power needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Soc Power 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 - Rent-Seeking Behaviour in the Power Market should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Soc Power 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 bargaining power of channel partners
– Because of the regulatory requirements, Pun-Lee Lam, Alexandra Yiu, Ka-Fu Wong suggests that, Soc Power 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.
Need for greater diversity
– Soc Power 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 Rent-Seeking Behaviour in the Power Market | 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 Rent-Seeking Behaviour in the Power Market are -
Creating value in data economy
– The success of analytics program of Soc Power has opened avenues for new revenue streams for the organization in the industry. This can help Soc Power to build a more holistic ecosystem as suggested in the Rent-Seeking Behaviour in the Power Market case study. Soc Power can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Soc Power 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.
Manufacturing automation
– Soc Power 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.
Buying journey improvements
– Soc Power can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Rent-Seeking Behaviour in the Power Market 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Soc Power 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, Rent-Seeking Behaviour in the Power Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Soc Power 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.
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 Soc Power in the consumer business. Now Soc Power can target international markets with far fewer capital restrictions requirements than the existing system.
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 Soc Power 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.
Learning at scale
– Online learning technologies has now opened space for Soc Power 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Soc Power 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.
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. Soc Power can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Soc Power 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. Soc Power 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.
Building a culture of innovation
– managers at Soc Power 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 Global Business segment.
Threats Rent-Seeking Behaviour in the Power Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Rent-Seeking Behaviour in the Power Market are -
High dependence on third party suppliers
– Soc Power 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.
Increasing wage structure of Soc Power
– 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 Soc Power.
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.
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 Soc Power in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Soc Power 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Soc Power 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 Rent-Seeking Behaviour in the Power Market .
Consumer confidence and its impact on Soc Power 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.
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 Soc Power business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Soc Power 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 Global Business industry regulations.
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 Soc Power.
Environmental challenges
– Soc Power 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. Soc Power can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Soc Power 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
– Soc Power has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Soc Power 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 Rent-Seeking Behaviour in the Power Market 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 Rent-Seeking Behaviour in the Power Market 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 Rent-Seeking Behaviour in the Power Market 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 Rent-Seeking Behaviour in the Power Market 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 Rent-Seeking Behaviour in the Power Market 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 Soc Power needs to make to build a sustainable competitive advantage.