Case Study Description of AES Corporation (A): Global Sourcing Initiative
This case is a good fit for courses in operations management and business communications. It examines the procurement strategy of a global energy company by describing the overall change program led by the new chief procurement officer as well as specific information regarding the commodity for electric meters. See also the B case (UV3548).
Swot Analysis of "AES Corporation (A): Global Sourcing Initiative" written by Timothy M. Laseter, Rajiv Ranjan, Amena Syeda, Arnon Katz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Procurement Uv3548 facing as an external strategic factors. Some of the topics covered in AES Corporation (A): Global Sourcing Initiative case study are - Strategic Management Strategies, Communication and Communication.
Some of the macro environment factors that can be used to understand the AES Corporation (A): Global Sourcing Initiative casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of AES Corporation (A): Global Sourcing Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AES Corporation (A): Global Sourcing Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Procurement Uv3548, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Procurement Uv3548 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 AES Corporation (A): Global Sourcing Initiative can be done for the following purposes –
1. Strategic planning using facts provided in AES Corporation (A): Global Sourcing Initiative case study
2. Improving business portfolio management of Procurement Uv3548
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Procurement Uv3548
Strengths AES Corporation (A): Global Sourcing Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Procurement Uv3548 in AES Corporation (A): Global Sourcing Initiative Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Procurement Uv3548 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Procurement Uv3548 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 AES Corporation (A): Global Sourcing Initiative - 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
- Procurement Uv3548 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 Procurement Uv3548 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AES Corporation (A): Global Sourcing Initiative Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Procurement Uv3548 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Procurement Uv3548 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
– Procurement Uv3548 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 Timothy M. Laseter, Rajiv Ranjan, Amena Syeda, Arnon Katz 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.
Low bargaining power of suppliers
– Suppliers of Procurement Uv3548 in the sector have low bargaining power. AES Corporation (A): Global Sourcing Initiative has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Procurement Uv3548 to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Procurement Uv3548 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Procurement Uv3548 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Procurement Uv3548
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Procurement Uv3548 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Procurement Uv3548 is one of the leading recruiters in the industry. Managers in the AES Corporation (A): Global Sourcing Initiative are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Communication field
– Procurement Uv3548 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 Procurement Uv3548 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Procurement Uv3548 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 AES Corporation (A): Global Sourcing Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Procurement Uv3548 is one of the most innovative firm in sector. Manager in AES Corporation (A): Global Sourcing Initiative Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses AES Corporation (A): Global Sourcing Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AES Corporation (A): Global Sourcing Initiative are -
Aligning sales with marketing
– It come across in the case study AES Corporation (A): Global Sourcing Initiative 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 AES Corporation (A): Global Sourcing Initiative can leverage the sales team experience to cultivate customer relationships as Procurement Uv3548 is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study AES Corporation (A): Global Sourcing Initiative, is just above the industry average. Procurement Uv3548 needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Procurement Uv3548 is dominated by functional specialists. It is not different from other players in the Communication segment. Procurement Uv3548 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Procurement Uv3548 to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study AES Corporation (A): Global Sourcing Initiative, it seems that company is thinking about the frontier risks that can impact Communication 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Procurement Uv3548 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AES Corporation (A): Global Sourcing Initiative can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Procurement Uv3548 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 - AES Corporation (A): Global Sourcing Initiative should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Procurement Uv3548 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. Procurement Uv3548 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 cash cycle compare to competitors
Procurement Uv3548 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Procurement Uv3548 needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As AES Corporation (A): Global Sourcing Initiative HBR case study mentions - Procurement Uv3548 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AES Corporation (A): Global Sourcing Initiative, it seems that the employees of Procurement Uv3548 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.
Opportunities AES Corporation (A): Global Sourcing Initiative | 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 AES Corporation (A): Global Sourcing Initiative are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Procurement Uv3548 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, AES Corporation (A): Global Sourcing Initiative, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Procurement Uv3548 has opened avenues for new revenue streams for the organization in the industry. This can help Procurement Uv3548 to build a more holistic ecosystem as suggested in the AES Corporation (A): Global Sourcing Initiative case study. Procurement Uv3548 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Procurement Uv3548 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.
Leveraging digital technologies
– Procurement Uv3548 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.
Manufacturing automation
– Procurement Uv3548 can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Procurement Uv3548 is facing challenges because of the dominance of functional experts in the organization. AES Corporation (A): Global Sourcing Initiative 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.
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 Procurement Uv3548 in the consumer business. Now Procurement Uv3548 can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Procurement Uv3548 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 AES Corporation (A): Global Sourcing Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Procurement Uv3548 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Procurement Uv3548 can develop new processes and procedures in Communication 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Procurement Uv3548 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. Procurement Uv3548 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.
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 Procurement Uv3548 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 Communication industry, but it has also influenced the consumer preferences. Procurement Uv3548 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Procurement Uv3548 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats AES Corporation (A): Global Sourcing Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AES Corporation (A): Global Sourcing Initiative are -
Technology acceleration in Forth Industrial Revolution
– Procurement Uv3548 has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Procurement Uv3548 needs to keep up with the evolution of technology in the Communication 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.
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.
Environmental challenges
– Procurement Uv3548 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. Procurement Uv3548 can take advantage of this fund but it will also bring new competitors in the Communication industry.
Consumer confidence and its impact on Procurement Uv3548 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.
High dependence on third party suppliers
– Procurement Uv3548 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.
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 Procurement Uv3548 business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Procurement Uv3548 is facing in Communication sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AES Corporation (A): Global Sourcing Initiative, Procurement Uv3548 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
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. Procurement Uv3548 needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
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 Procurement Uv3548 in the Communication sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Procurement Uv3548 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Procurement Uv3548 in the Communication industry. The Communication 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.
Stagnating economy with rate increase
– Procurement Uv3548 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.
Weighted SWOT Analysis of AES Corporation (A): Global Sourcing Initiative 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 AES Corporation (A): Global Sourcing Initiative 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 AES Corporation (A): Global Sourcing Initiative 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 AES Corporation (A): Global Sourcing Initiative 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 AES Corporation (A): Global Sourcing Initiative 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 Procurement Uv3548 needs to make to build a sustainable competitive advantage.
