BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant
The case presents the challenges confronting BrightSource, a company building a commercial-scale concentrated solar power plant in California in 2013: 1) environmentalists wanted to protect a threatened species at the site of the new plant, 2) competing solar power technology had become much cheaper in recent years, and 3) the company had been unable to get investors for its new thermal storage technology, which could be a game changer for the industry. When BrightSource was in the planning stages of Ivanpah, a 400-megawatt solar power plant in the Mojave Desert, the company encountered opposition from environmentalists because the federal land specifically set aside for the facility was also the habitat of the desert tortoise, a threatened species under the Endangered Species Act. While solar energy was a positive step toward increasing renewable energy resources, and Ivanpah would power 140,000 homes during peak hours, local environmentalists were equally concerned about the survival of the desert tortoise. The case describes the steps BrightSource took to respond to the concerns raised by the environmentalists and build the plant, addressing both climate change and protecting local habitats. Company management also faced challenges from the changing economics of generating solar power due to developments in competing systems and technologies. Students are asked to consider whether the technology that BrightSource is using, Concentrated Solar Power (CSP), is the right choice for the future of the industry, given that the cost of competitors' technology, Photovoltaics (PV), had dropped dramatically in the previous few years. BrightSource also had a new thermal storage technology that would allow it to provide electricity on cloudy days, thereby significantly increasing output and the profitability of future power plants, but investors so far had not come on board, citing the risk and expense of the building out the technology.
Swot Analysis of "BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant" written by Debra Schifrin, Donald Kennedy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Brightsource Solar facing as an external strategic factors. Some of the topics covered in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing,
increasing household debt because of falling income levels, there is backlash against globalization, etc
Introduction to SWOT Analysis of BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brightsource Solar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brightsource Solar 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant can be done for the following purposes –
1. Strategic planning using facts provided in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant case study
2. Improving business portfolio management of Brightsource Solar
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Brightsource Solar
Strengths BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brightsource Solar in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant Harvard Business Review case study are -
Effective Research and Development (R&D)
– Brightsource Solar 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant firm has clearly differentiated products in the market place. This has enabled Brightsource Solar to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Brightsource Solar to invest into research and development (R&D) and innovation.
Strong track record of project management
– Brightsource Solar is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Brightsource Solar 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 Brightsource Solar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Brightsource Solar are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High switching costs
– The high switching costs that Brightsource Solar 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.
Innovation driven organization
– Brightsource Solar is one of the most innovative firm in sector. Manager in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Brightsource Solar is present in almost all the verticals within the industry. This has provided firm in BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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.
Highly skilled collaborators
– Brightsource Solar 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Brightsource Solar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Brightsource Solar 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.
High brand equity
– Brightsource Solar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Brightsource Solar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Brightsource Solar
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Brightsource Solar does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant are -
High cash cycle compare to competitors
Brightsource Solar 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant, it seems that the employees of Brightsource Solar 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Brightsource Solar is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Debra Schifrin, Donald Kennedy suggests that, Brightsource Solar 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant, is just above the industry average. Brightsource Solar 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.
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 Brightsource Solar supply chain. Even after few cautionary changes mentioned in the HBR case study - BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Brightsource Solar vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Brightsource Solar 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. Brightsource Solar 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.
Products dominated business model
– Even though Brightsource Solar 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 - BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 Brightsource Solar 's lucrative customers.
Lack of clear differentiation of Brightsource Solar products
– To increase the profitability and margins on the products, Brightsource Solar needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Brightsource Solar 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.
Opportunities BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant | 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant are -
Learning at scale
– Online learning technologies has now opened space for Brightsource Solar 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 Brightsource Solar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Brightsource Solar 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. Brightsource Solar 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Brightsource Solar is facing challenges because of the dominance of functional experts in the organization. BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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.
Buying journey improvements
– Brightsource Solar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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.
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 Brightsource Solar in the consumer business. Now Brightsource Solar can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Brightsource Solar 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Brightsource Solar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Brightsource Solar 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, BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Brightsource Solar can develop new processes and procedures in Leadership & Managing People 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.
Using analytics as competitive advantage
– Brightsource Solar 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Brightsource Solar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Brightsource Solar can use these opportunities to build new business models that can help the communities that Brightsource Solar operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Better consumer reach
– The expansion of the 5G network will help Brightsource Solar to increase its market reach. Brightsource Solar 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.
Threats BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 Brightsource Solar.
Environmental challenges
– Brightsource Solar 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. Brightsource Solar can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Brightsource Solar
– 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 Brightsource Solar.
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 Brightsource Solar in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Brightsource Solar 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 Leadership & Managing People industry regulations.
Technology acceleration in Forth Industrial Revolution
– Brightsource Solar has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Brightsource Solar needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Brightsource Solar 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant .
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 Brightsource Solar business can come under increasing regulations regarding data privacy, data security, 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. Brightsource Solar needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Brightsource Solar can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Brightsource Solar 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.
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.
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. Brightsource Solar 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.
Weighted SWOT Analysis of BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 BrightSource: Challenges and Prospects for a Concentrated Solar Power Plant 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 Brightsource Solar needs to make to build a sustainable competitive advantage.
