Endesa Chile: Raising the Ralco Dam (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Endesa Chile: Raising the Ralco Dam (A)
Endesa Chile, the largest electricity generation company in Chile, is building a major power plant on the Biobio River in Southern Chile. A historic conflict involving the indigenous people of the Biobio River, the Chilean government, and international conservation groups results. The conflict threatens the completion of the project and the longstanding culture and community of the Penhuenche, the indigenous people of the Upper Biobio.
Authors :: Paula J. Lashober, Dina Pradel, Kathleen L. McGinn
Swot Analysis of "Endesa Chile: Raising the Ralco Dam (A)" written by Paula J. Lashober, Dina Pradel, Kathleen L. McGinn includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Biobio Chile facing as an external strategic factors. Some of the topics covered in Endesa Chile: Raising the Ralco Dam (A) case study are - Strategic Management Strategies, Government, Influence, Negotiations, Project management, Social responsibility and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Endesa Chile: Raising the Ralco Dam (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, wage bills are increasing, geopolitical disruptions, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic ,
increasing energy prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Endesa Chile: Raising the Ralco Dam (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Endesa Chile: Raising the Ralco Dam (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Biobio Chile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A) can be done for the following purposes –
1. Strategic planning using facts provided in Endesa Chile: Raising the Ralco Dam (A) case study
2. Improving business portfolio management of Biobio Chile
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 Biobio Chile
Strengths Endesa Chile: Raising the Ralco Dam (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Biobio Chile in Endesa Chile: Raising the Ralco Dam (A) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Biobio Chile in the sector have low bargaining power. Endesa Chile: Raising the Ralco Dam (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Biobio Chile to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Biobio Chile 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 Biobio Chile is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Endesa Chile: Raising the Ralco Dam (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Biobio Chile 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 Paula J. Lashober, Dina Pradel, Kathleen L. McGinn 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.
Innovation driven organization
– Biobio Chile is one of the most innovative firm in sector. Manager in Endesa Chile: Raising the Ralco Dam (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Biobio Chile has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Biobio Chile 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.
Superior customer experience
– The customer experience strategy of Biobio Chile 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)
– Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Biobio Chile is one of the leading recruiters in the industry. Managers in the Endesa Chile: Raising the Ralco Dam (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Biobio Chile 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
– Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Biobio Chile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Biobio Chile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Biobio Chile is present in almost all the verticals within the industry. This has provided firm in Endesa Chile: Raising the Ralco Dam (A) 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.
Weaknesses Endesa Chile: Raising the Ralco Dam (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Endesa Chile: Raising the Ralco Dam (A) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Endesa Chile: Raising the Ralco Dam (A), it seems that the employees of Biobio Chile don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A) HBR case study mentions - Biobio Chile takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Endesa Chile: Raising the Ralco Dam (A), in the dynamic environment Biobio Chile has struggled to respond to the nimble upstart competition. Biobio Chile has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Endesa Chile: Raising the Ralco Dam (A) 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 Biobio Chile has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Biobio Chile 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.
Increasing silos among functional specialists
– The organizational structure of Biobio Chile is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Biobio Chile needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Biobio Chile to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Endesa Chile: Raising the Ralco Dam (A), it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Paula J. Lashober, Dina Pradel, Kathleen L. McGinn suggests that, Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A), is just above the industry average. Biobio Chile 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.
Skills based hiring
– The stress on hiring functional specialists at Biobio Chile 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.
Opportunities Endesa Chile: Raising the Ralco Dam (A) | 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 Endesa Chile: Raising the Ralco Dam (A) are -
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 Biobio Chile in the consumer business. Now Biobio Chile can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Biobio Chile 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Biobio Chile 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, Endesa Chile: Raising the Ralco Dam (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Biobio Chile 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 Leadership & Managing People segment.
Better consumer reach
– The expansion of the 5G network will help Biobio Chile to increase its market reach. Biobio Chile 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Biobio Chile 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.
Buying journey improvements
– Biobio Chile can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Endesa Chile: Raising the Ralco Dam (A) 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.
Manufacturing automation
– Biobio Chile can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Biobio Chile has opened avenues for new revenue streams for the organization in the industry. This can help Biobio Chile to build a more holistic ecosystem as suggested in the Endesa Chile: Raising the Ralco Dam (A) case study. Biobio Chile can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Biobio Chile 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 Biobio Chile to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Biobio Chile is facing challenges because of the dominance of functional experts in the organization. Endesa Chile: Raising the Ralco Dam (A) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Biobio Chile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Biobio Chile 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.
Threats Endesa Chile: Raising the Ralco Dam (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Endesa Chile: Raising the Ralco Dam (A) are -
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.
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. Biobio Chile 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, Biobio Chile 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 Endesa Chile: Raising the Ralco Dam (A) .
Consumer confidence and its impact on Biobio Chile 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
– Biobio Chile 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.
Increasing wage structure of Biobio Chile
– 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 Biobio Chile.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Biobio Chile in the Leadership & Managing People industry. The Leadership & Managing People 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.
Technology acceleration in Forth Industrial Revolution
– Biobio Chile has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Biobio Chile 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.
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 Biobio Chile.
Stagnating economy with rate increase
– Biobio Chile 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Endesa Chile: Raising the Ralco Dam (A), Biobio Chile may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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. Biobio Chile needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Biobio Chile 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.
Weighted SWOT Analysis of Endesa Chile: Raising the Ralco Dam (A) 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 Endesa Chile: Raising the Ralco Dam (A) 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 Endesa Chile: Raising the Ralco Dam (A) 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 Endesa Chile: Raising the Ralco Dam (A) 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 Endesa Chile: Raising the Ralco Dam (A) 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 Biobio Chile needs to make to build a sustainable competitive advantage.