National Power and the Privatization of the British Power Generation Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of National Power and the Privatization of the British Power Generation Industry
The British government privatized the nation's electric utility sector in 1991 through a complex process involving the restructuring of the industry as well as the creation of a new regulatory oversight body. National Power plc, the largest of the privatized power generators, has emerged as highly profitable under private ownership, yet faces challenges with respect to an increasingly hostile regulatory environment. In addition, the firm, under chairman John Baker, is debating whether to explore opportunities for expansion and diversification in foreign markets.
Swot Analysis of "National Power and the Privatization of the British Power Generation Industry" written by Willis Emmons, Ed Simnett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Power Privatized facing as an external strategic factors. Some of the topics covered in National Power and the Privatization of the British Power Generation Industry case study are - Strategic Management Strategies, International business and Global Business.
Some of the macro environment factors that can be used to understand the National Power and the Privatization of the British Power Generation Industry casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, 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, there is backlash against globalization, central banks are concerned over increasing inflation, increasing commodity prices,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of National Power and the Privatization of the British Power Generation Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in National Power and the Privatization of the British Power Generation Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Power Privatized, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Power Privatized 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 National Power and the Privatization of the British Power Generation Industry can be done for the following purposes –
1. Strategic planning using facts provided in National Power and the Privatization of the British Power Generation Industry case study
2. Improving business portfolio management of Power Privatized
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 Power Privatized
Strengths National Power and the Privatization of the British Power Generation Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Power Privatized in National Power and the Privatization of the British Power Generation Industry Harvard Business Review case study are -
Diverse revenue streams
– Power Privatized is present in almost all the verticals within the industry. This has provided firm in National Power and the Privatization of the British Power Generation Industry case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Power Privatized has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in National Power and the Privatization of the British Power Generation Industry 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.
Sustainable margins compare to other players in Global Business industry
– National Power and the Privatization of the British Power Generation Industry firm has clearly differentiated products in the market place. This has enabled Power Privatized to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Power Privatized to invest into research and development (R&D) and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Power Privatized digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Power Privatized 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.
Ability to lead change in Global Business field
– Power Privatized 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 Power Privatized in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Power Privatized 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 Willis Emmons, Ed Simnett 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.
Ability to recruit top talent
– Power Privatized is one of the leading recruiters in the industry. Managers in the National Power and the Privatization of the British Power Generation Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Power Privatized 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.
Low bargaining power of suppliers
– Suppliers of Power Privatized in the sector have low bargaining power. National Power and the Privatization of the British Power Generation Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Power Privatized to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Power Privatized has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Power Privatized 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 National Power and the Privatization of the British Power Generation Industry 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.
Strong track record of project management
– Power Privatized is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses National Power and the Privatization of the British Power Generation Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of National Power and the Privatization of the British Power Generation Industry are -
Interest costs
– Compare to the competition, Power Privatized 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the National Power and the Privatization of the British Power Generation Industry 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 Power Privatized has relatively successful track record of launching new products.
Lack of clear differentiation of Power Privatized products
– To increase the profitability and margins on the products, Power Privatized needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study National Power and the Privatization of the British Power Generation Industry, it seems that the employees of Power Privatized 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.
Capital Spending Reduction
– Even during the low interest decade, Power Privatized 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 to strategic competitive environment developments
– As National Power and the Privatization of the British Power Generation Industry HBR case study mentions - Power Privatized 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study National Power and the Privatization of the British Power Generation Industry, in the dynamic environment Power Privatized has struggled to respond to the nimble upstart competition. Power Privatized has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Power Privatized is dominated by functional specialists. It is not different from other players in the Global Business segment. Power Privatized needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Power Privatized to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Willis Emmons, Ed Simnett suggests that, Power Privatized 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.
Skills based hiring
– The stress on hiring functional specialists at Power Privatized 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.
No frontier risks strategy
– After analyzing the HBR case study National Power and the Privatization of the British Power Generation Industry, 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.
Opportunities National Power and the Privatization of the British Power Generation Industry | 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 National Power and the Privatization of the British Power Generation Industry are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Power Privatized can use these opportunities to build new business models that can help the communities that Power Privatized operates in. Secondly it can use opportunities from government spending in Global Business sector.
Loyalty marketing
– Power Privatized 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.
Creating value in data economy
– The success of analytics program of Power Privatized has opened avenues for new revenue streams for the organization in the industry. This can help Power Privatized to build a more holistic ecosystem as suggested in the National Power and the Privatization of the British Power Generation Industry case study. Power Privatized can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Power Privatized 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.
Building a culture of innovation
– managers at Power Privatized 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.
Leveraging digital technologies
– Power Privatized can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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 Power Privatized 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Power Privatized can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Using analytics as competitive advantage
– Power Privatized 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 National Power and the Privatization of the British Power Generation Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Power Privatized to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Power Privatized 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. Power Privatized 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Power Privatized can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Power Privatized 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Power Privatized can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats National Power and the Privatization of the British Power Generation Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study National Power and the Privatization of the British Power Generation Industry are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Power Privatized 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.
Increasing wage structure of Power Privatized
– 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 Power Privatized.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Power Privatized with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Power Privatized needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study National Power and the Privatization of the British Power Generation Industry, Power Privatized may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Power Privatized in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Power Privatized 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.
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. Power Privatized 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Power Privatized.
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 Power Privatized business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Power Privatized 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. Power Privatized can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of National Power and the Privatization of the British Power Generation Industry 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 National Power and the Privatization of the British Power Generation Industry 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 National Power and the Privatization of the British Power Generation Industry 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 National Power and the Privatization of the British Power Generation Industry 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 National Power and the Privatization of the British Power Generation Industry 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 Power Privatized needs to make to build a sustainable competitive advantage.