Strategy of the Firm Under Regulatory Review: The Case of Chilectra SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Strategy of the Firm Under Regulatory Review: The Case of Chilectra
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Discusses the largest electric distribution company in Chile and one of the five largest private Chilean companies. Introduces the exercise of operating control in order to improve the profitability of the investments, privatization, and international expansions.
Swot Analysis of "Strategy of the Firm Under Regulatory Review: The Case of Chilectra" written by Rafael Di Tella, Alexander Dyck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chilectra Site.discusses facing as an external strategic factors. Some of the topics covered in Strategy of the Firm Under Regulatory Review: The Case of Chilectra case study are - Strategic Management Strategies, Economy, Financial analysis, Growth strategy and Global Business.
Some of the macro environment factors that can be used to understand the Strategy of the Firm Under Regulatory Review: The Case of Chilectra casestudy better are - – geopolitical disruptions, wage bills are increasing, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Strategy of the Firm Under Regulatory Review: The Case of Chilectra
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategy of the Firm Under Regulatory Review: The Case of Chilectra case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chilectra Site.discusses, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra can be done for the following purposes –
1. Strategic planning using facts provided in Strategy of the Firm Under Regulatory Review: The Case of Chilectra case study
2. Improving business portfolio management of Chilectra Site.discusses
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 Chilectra Site.discusses
Strengths Strategy of the Firm Under Regulatory Review: The Case of Chilectra | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chilectra Site.discusses in Strategy of the Firm Under Regulatory Review: The Case of Chilectra Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Strategy of the Firm Under Regulatory Review: The Case of Chilectra firm has clearly differentiated products in the market place. This has enabled Chilectra Site.discusses to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Chilectra Site.discusses to invest into research and development (R&D) and innovation.
Strong track record of project management
– Chilectra Site.discusses is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Chilectra Site.discusses is one of the leading recruiters in the industry. Managers in the Strategy of the Firm Under Regulatory Review: The Case of Chilectra are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Chilectra Site.discusses is one of the most innovative firm in sector. Manager in Strategy of the Firm Under Regulatory Review: The Case of Chilectra Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Chilectra Site.discusses 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.
Organizational Resilience of Chilectra Site.discusses
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chilectra Site.discusses does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Chilectra Site.discusses in the sector have low bargaining power. Strategy of the Firm Under Regulatory Review: The Case of Chilectra has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chilectra Site.discusses to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Chilectra Site.discusses has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chilectra Site.discusses to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Chilectra Site.discusses has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Chilectra Site.discusses digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategy of the Firm Under Regulatory Review: The Case of Chilectra are -
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 Chilectra Site.discusses supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategy of the Firm Under Regulatory Review: The Case of Chilectra, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chilectra Site.discusses vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra, 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.
Capital Spending Reduction
– Even during the low interest decade, Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra HBR case study mentions - Chilectra Site.discusses 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.
High cash cycle compare to competitors
Chilectra Site.discusses 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.
Low market penetration in new markets
– Outside its home market of Chilectra Site.discusses, firm in the HBR case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Rafael Di Tella, Alexander Dyck suggests that, Chilectra Site.discusses 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra, it seems that the employees of Chilectra Site.discusses 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Chilectra Site.discusses has relatively successful track record of launching new products.
Need for greater diversity
– Chilectra Site.discusses 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.
Aligning sales with marketing
– It come across in the case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra can leverage the sales team experience to cultivate customer relationships as Chilectra Site.discusses is planning to shift buying processes online.
Opportunities Strategy of the Firm Under Regulatory Review: The Case of Chilectra | 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra are -
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. Chilectra Site.discusses can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chilectra Site.discusses 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, Strategy of the Firm Under Regulatory Review: The Case of Chilectra, 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, Chilectra Site.discusses 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.
Developing new processes and practices
– Chilectra Site.discusses 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.
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 Chilectra Site.discusses 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.
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. Chilectra Site.discusses can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chilectra Site.discusses is facing challenges because of the dominance of functional experts in the organization. Strategy of the Firm Under Regulatory Review: The Case of Chilectra case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chilectra Site.discusses to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chilectra Site.discusses 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 Chilectra Site.discusses to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Chilectra Site.discusses 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chilectra Site.discusses 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.
Buying journey improvements
– Chilectra Site.discusses can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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.
Learning at scale
– Online learning technologies has now opened space for Chilectra Site.discusses 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.
Threats Strategy of the Firm Under Regulatory Review: The Case of Chilectra External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra are -
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 Chilectra Site.discusses.
Regulatory challenges
– Chilectra Site.discusses 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.
High dependence on third party suppliers
– Chilectra Site.discusses high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Environmental challenges
– Chilectra Site.discusses 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. Chilectra Site.discusses can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chilectra Site.discusses 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategy of the Firm Under Regulatory Review: The Case of Chilectra, Chilectra Site.discusses 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 .
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. Chilectra Site.discusses can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chilectra Site.discusses 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra .
Increasing wage structure of Chilectra Site.discusses
– 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 Chilectra Site.discusses.
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 Chilectra Site.discusses business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Chilectra Site.discusses is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Chilectra Site.discusses needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Chilectra Site.discusses with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Strategy of the Firm Under Regulatory Review: The Case of Chilectra 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 Chilectra Site.discusses needs to make to build a sustainable competitive advantage.