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 - – there is backlash against globalization, wage bills are increasing, geopolitical disruptions, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
Organizational Resilience of Medupi Medupi's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Medupi Medupi's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Effective Research and Development (R&D)
– Medupi Medupi's 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 Constructing the Medupi Power Station - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Medupi Medupi's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Constructing the Medupi Power Station Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Medupi Medupi's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to recruit top talent
– Medupi Medupi's is one of the leading recruiters in the industry. Managers in the Constructing the Medupi Power Station are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
Skills based hiring
– The stress on hiring functional specialists at Medupi Medupi's 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Constructing the Medupi Power Station, it seems that the employees of Medupi Medupi's 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Constructing the Medupi Power Station, in the dynamic environment Medupi Medupi's has struggled to respond to the nimble upstart competition. Medupi Medupi's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Constructing the Medupi Power Station 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 Constructing the Medupi Power Station can leverage the sales team experience to cultivate customer relationships as Medupi Medupi's is planning to shift buying processes online.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Medupi Medupi's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Constructing the Medupi Power Station 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 Medupi Medupi's has relatively successful track record of launching new products.
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 -
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Medupi Medupi's is facing challenges because of the dominance of functional experts in the organization. Constructing the Medupi Power Station 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.
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.
Better consumer reach
– The expansion of the 5G network will help Medupi Medupi's to increase its market reach. Medupi Medupi's 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, Medupi Medupi's 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.
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.
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.
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.
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.
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 Medupi Medupi's 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Medupi Medupi's can use these opportunities to build new business models that can help the communities that Medupi Medupi's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Medupi Medupi's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Medupi Medupi's 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Constructing the Medupi Power Station, Medupi Medupi's 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 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.
Stagnating economy with rate increase
– Medupi Medupi's 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.
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.
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.
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.
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.
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.
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 Medupi Medupi's.
Technology acceleration in Forth Industrial Revolution
– Medupi Medupi's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Medupi Medupi's 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.
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.
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.
