Caprica Energy and Its Choices SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Caprica Energy and Its Choices
Jane Barrow, CEO of Caprica Energy, must recommend to the board which of three potential "unconventional" natural gas development sites in different parts of the United States the company should pursue. The case takes place in January 2011, when the "low-hanging fruit" of natural gas production in the United States had essentially been picked. All three of the potential sites (shale, coal bed methane, and tight sands) would require hydraulic fracturing, a process of removing gas that was formerly considered inaccessible by injecting water and chemicals into the ground. Because of emerging concerns about the potential harm "fracking" can do to drinking water, Barrow must not only analyze which site might be most profitable but also what the potential risks to the environment and area residents might be.
Authors :: Jared Harris, Samuel E Bodily, Jenny Mead, Donald Adolphson
Swot Analysis of "Caprica Energy and Its Choices" written by Jared Harris, Samuel E Bodily, Jenny Mead, Donald Adolphson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Barrow Caprica facing as an external strategic factors. Some of the topics covered in Caprica Energy and Its Choices case study are - Strategic Management Strategies, Decision making, Risk management and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Caprica Energy and Its Choices casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Caprica Energy and Its Choices
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Caprica Energy and Its Choices case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barrow Caprica, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barrow Caprica 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 Caprica Energy and Its Choices can be done for the following purposes –
1. Strategic planning using facts provided in Caprica Energy and Its Choices case study
2. Improving business portfolio management of Barrow Caprica
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Barrow Caprica
Strengths Caprica Energy and Its Choices | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barrow Caprica in Caprica Energy and Its Choices Harvard Business Review case study are -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Barrow Caprica digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Barrow Caprica 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.
Analytics focus
– Barrow Caprica 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 Jared Harris, Samuel E Bodily, Jenny Mead, Donald Adolphson 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.
High switching costs
– The high switching costs that Barrow Caprica 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.
Strong track record of project management
– Barrow Caprica is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Barrow Caprica in the sector have low bargaining power. Caprica Energy and Its Choices has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barrow Caprica to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Barrow Caprica is one of the leading recruiters in the industry. Managers in the Caprica Energy and Its Choices are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Barrow Caprica 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 Caprica Energy and Its Choices - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Barrow Caprica 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 Barrow Caprica is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Caprica Energy and Its Choices Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Caprica Energy and Its Choices firm has clearly differentiated products in the market place. This has enabled Barrow Caprica to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Barrow Caprica to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Barrow Caprica 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 Caprica Energy and Its Choices HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Barrow Caprica has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Barrow Caprica 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.
Innovation driven organization
– Barrow Caprica is one of the most innovative firm in sector. Manager in Caprica Energy and Its Choices Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Caprica Energy and Its Choices | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Caprica Energy and Its Choices are -
Need for greater diversity
– Barrow Caprica 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.
Capital Spending Reduction
– Even during the low interest decade, Barrow Caprica 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.
Aligning sales with marketing
– It come across in the case study Caprica Energy and Its Choices 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 Caprica Energy and Its Choices can leverage the sales team experience to cultivate customer relationships as Barrow Caprica is planning to shift buying processes online.
Interest costs
– Compare to the competition, Barrow Caprica 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.
Lack of clear differentiation of Barrow Caprica products
– To increase the profitability and margins on the products, Barrow Caprica needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Barrow Caprica, firm in the HBR case study Caprica Energy and Its Choices needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Barrow Caprica 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.
Increasing silos among functional specialists
– The organizational structure of Barrow Caprica is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Barrow Caprica needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Barrow Caprica to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Jared Harris, Samuel E Bodily, Jenny Mead, Donald Adolphson suggests that, Barrow Caprica 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Caprica Energy and Its Choices 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 Barrow Caprica 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Barrow Caprica is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Caprica Energy and Its Choices can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Caprica Energy and Its Choices | 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 Caprica Energy and Its Choices are -
Manufacturing automation
– Barrow Caprica can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Barrow Caprica in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Barrow Caprica can develop new processes and procedures in Innovation & Entrepreneurship 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Barrow Caprica 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 Barrow Caprica to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Barrow Caprica 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
– Barrow Caprica 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 Caprica Energy and Its Choices - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Barrow Caprica 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 Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Barrow Caprica 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. Barrow Caprica 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Barrow Caprica can use these opportunities to build new business models that can help the communities that Barrow Caprica operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Better consumer reach
– The expansion of the 5G network will help Barrow Caprica to increase its market reach. Barrow Caprica will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Barrow Caprica 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 Innovation & Entrepreneurship segment.
Buying journey improvements
– Barrow Caprica can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Caprica Energy and Its Choices 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.
Creating value in data economy
– The success of analytics program of Barrow Caprica has opened avenues for new revenue streams for the organization in the industry. This can help Barrow Caprica to build a more holistic ecosystem as suggested in the Caprica Energy and Its Choices case study. Barrow Caprica can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barrow Caprica 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, Caprica Energy and Its Choices, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Caprica Energy and Its Choices External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Caprica Energy and Its Choices are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Caprica Energy and Its Choices, Barrow Caprica may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Barrow Caprica in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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. Barrow Caprica needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Consumer confidence and its impact on Barrow Caprica 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.
Regulatory challenges
– Barrow Caprica 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 Innovation & Entrepreneurship 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 Barrow Caprica.
Shortening product life cycle
– it is one of the major threat that Barrow Caprica is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Barrow Caprica 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. Barrow Caprica can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Barrow Caprica business can come under increasing regulations regarding data privacy, data security, etc.
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 Barrow Caprica in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Barrow Caprica 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 Barrow Caprica
– 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 Barrow Caprica.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Barrow Caprica 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 Caprica Energy and Its Choices .
Weighted SWOT Analysis of Caprica Energy and Its Choices 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 Caprica Energy and Its Choices 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 Caprica Energy and Its Choices 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 Caprica Energy and Its Choices 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 Caprica Energy and Its Choices 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 Barrow Caprica needs to make to build a sustainable competitive advantage.