Constructing the Medupi Power Station SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Constructing the Medupi Power Station
Medupi, rising from the dry Limpopo Province bush veld, was the first baseload project built in South Africa in 20 years. It would be the largest dry-cooled coal-fired power station in the world and was developed by Eskom, which generated 90 per cent of Southern Africa's power, at an estimated cost of R125 billion. In spite of the worldwide concern about greener energy, coal remains the most popular power station fuel for South Africa, due to the country's vast resources of 224 million tonnes annually. The new capacity Medupi would offer was sorely needed. Regular and nationwide load shedding, due to a shortage of capacity, affected the entire country during 2007 and 2008 and all businesses were asked to turn off non-essential lighting and equipment, even during the day. It had been no mean feat to keep to a project schedule that involved various suppliers providing different packages at different dates and also required accommodating several interfaces during both the design and implementation of the work on site. Due to the massive scale of the project as well as the highly specialized civil engineering required for different sections of Medupi's construction, three companies joined forces to tackle the job, namely Murray & Roberts, Aveng and Concor. Murray & Roberts appointed Coenie Vermaak as project director at Medupi and at 34 the youngest project director in the group. The managers of the joint venture realized quickly that this would be "a project like no other." The three companies' different ways of working necessitated much more integrated coordination. For instance, employees from the different parent organizations had different job descriptions, were numerated differently, had different benefits, structures, processes and cultures. Medupi's uniqueness provided an opportunity to be pioneers in the construction industry and to "reconstruct construction" with a different way of working on a construction site. A culture of employee engagement and alignment was required.
Swot Analysis of "Constructing the Medupi Power Station" written by Caren Scheepers, Schalk Marais includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Medupi Medupi's facing as an external strategic factors. Some of the topics covered in Constructing the Medupi Power Station case study are - Strategic Management Strategies, Change management, International business, Leadership, Organizational culture, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Constructing the Medupi Power Station casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, technology disruption, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Constructing the Medupi Power Station
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Constructing the Medupi Power Station case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Medupi Medupi's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Medupi Medupi's 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 Constructing the Medupi Power Station can be done for the following purposes –
1. Strategic planning using facts provided in Constructing the Medupi Power Station case study
2. Improving business portfolio management of Medupi Medupi's
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 Medupi Medupi's
Strengths Constructing the Medupi Power Station | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Medupi Medupi's in Constructing the Medupi Power Station Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Medupi Medupi's 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 Medupi Medupi's 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.
Learning organization
- Medupi Medupi's 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 Medupi Medupi's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Constructing the Medupi Power Station Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Medupi Medupi's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Medupi Medupi's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Medupi Medupi's in the sector have low bargaining power. Constructing the Medupi Power Station has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Medupi Medupi's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Medupi Medupi's is present in almost all the verticals within the industry. This has provided firm in Constructing the Medupi Power Station 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.
Successful track record of launching new products
– Medupi Medupi's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Medupi Medupi's 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
– Medupi Medupi's is one of the most innovative firm in sector. Manager in Constructing the Medupi Power Station Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Medupi Medupi's 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 Constructing the Medupi Power Station HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Medupi Medupi's 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 Caren Scheepers, Schalk Marais 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Medupi Medupi's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Medupi Medupi's 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.
Operational resilience
– The operational resilience strategy in the Constructing the Medupi Power Station Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Constructing the Medupi Power Station | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Constructing the Medupi Power Station are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Constructing the Medupi Power Station, is just above the industry average. Medupi Medupi's 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 operating costs
– Compare to the competitors, firm in the HBR case study Constructing the Medupi Power Station 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 Medupi Medupi's 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Medupi Medupi's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Constructing the Medupi Power Station can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Medupi Medupi's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Medupi Medupi's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Medupi Medupi's to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Medupi Medupi's 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. Medupi Medupi's 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.
Capital Spending Reduction
– Even during the low interest decade, Medupi Medupi's 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.
Lack of clear differentiation of Medupi Medupi's products
– To increase the profitability and margins on the products, Medupi Medupi's needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Constructing the Medupi Power Station, 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 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 Medupi Medupi's supply chain. Even after few cautionary changes mentioned in the HBR case study - Constructing the Medupi Power Station, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Medupi Medupi's vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Caren Scheepers, Schalk Marais suggests that, Medupi Medupi's 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.
Interest costs
– Compare to the competition, Medupi Medupi's 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 Constructing the Medupi Power Station | 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 Constructing the Medupi Power Station are -
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. Medupi Medupi's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Medupi Medupi's 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.
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 Medupi Medupi's in the consumer business. Now Medupi Medupi's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Medupi Medupi's 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.
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. Medupi Medupi's 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. Medupi Medupi's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Medupi Medupi's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Medupi Medupi's 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, Constructing the Medupi Power Station, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Medupi Medupi's 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 Constructing the Medupi Power Station - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Medupi Medupi's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Medupi Medupi's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Constructing the Medupi Power Station 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Medupi Medupi's 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 Medupi Medupi's to hire the very best people irrespective of their geographical location.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Medupi Medupi's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Medupi Medupi's 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.
Learning at scale
– Online learning technologies has now opened space for Medupi Medupi's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Constructing the Medupi Power Station External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Constructing the Medupi Power Station are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Medupi Medupi's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Medupi Medupi's 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. Medupi Medupi's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Medupi Medupi's
– 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 Medupi Medupi's.
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 Medupi Medupi's in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Medupi Medupi's 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.
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. Medupi Medupi's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Medupi Medupi's 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.
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. Medupi Medupi's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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. Medupi Medupi's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Medupi Medupi's 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 Constructing the Medupi Power Station .
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 Medupi Medupi's business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Medupi Medupi's 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.
Shortening product life cycle
– it is one of the major threat that Medupi Medupi's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Constructing the Medupi Power Station 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 Constructing the Medupi Power Station 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 Constructing the Medupi Power Station 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 Constructing the Medupi Power Station 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 Constructing the Medupi Power Station 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 Medupi Medupi's needs to make to build a sustainable competitive advantage.