Digital Energy: Disruption in the Electrical Energy Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Digital Energy: Disruption in the Electrical Energy Market
California-based Silver Spring Networks designed, developed, and deployed the large-scale networking platforms and solutions that enabled the "Internet of Things" to control power grids. In 2010, there was an opportunity for Silver Spring Networks to partner with another start-up that wanted to integrate electric vehicle charging technology with the power grid. At the same time, leading-edge smart city developments-projecting significant savings for utilities and governments-were gaining traction. Both endeavours held significant upside potential and could be used to attract the attention of utilities and other firms, along with state and federal governments and their regulatory commissions. There were signs of disruptive technology innovation, and Silver Springs Networks had to devise a roadmap for entering the market at the right time with the right product in the right sequence. Manimala Kumar is affiliated with University of California-Berkeley. Paul Tiffany is affiliated with University of California-Berkeley. Ryan Blood is affiliated with University of California-Berkeley.
Authors :: Manimala Kumar, Paul Tiffany, Ryan Blood
Swot Analysis of "Digital Energy: Disruption in the Electrical Energy Market" written by Manimala Kumar, Paul Tiffany, Ryan Blood includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Silver California facing as an external strategic factors. Some of the topics covered in Digital Energy: Disruption in the Electrical Energy Market case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Digital Energy: Disruption in the Electrical Energy Market casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, there is backlash against globalization,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Digital Energy: Disruption in the Electrical Energy Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digital Energy: Disruption in the Electrical Energy Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Silver California, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Silver California 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 Digital Energy: Disruption in the Electrical Energy Market can be done for the following purposes –
1. Strategic planning using facts provided in Digital Energy: Disruption in the Electrical Energy Market case study
2. Improving business portfolio management of Silver California
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 Silver California
Strengths Digital Energy: Disruption in the Electrical Energy Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Silver California in Digital Energy: Disruption in the Electrical Energy Market Harvard Business Review case study are -
Innovation driven organization
– Silver California is one of the most innovative firm in sector. Manager in Digital Energy: Disruption in the Electrical Energy Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Silver California 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 Digital Energy: Disruption in the Electrical Energy Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Silver California 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 Digital Energy: Disruption in the Electrical Energy Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Silver California
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Silver California does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Digital Energy: Disruption in the Electrical Energy Market 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.
Superior customer experience
– The customer experience strategy of Silver California in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Silver California is one of the leading recruiters in the industry. Managers in the Digital Energy: Disruption in the Electrical Energy Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Silver California 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 Silver California is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Digital Energy: Disruption in the Electrical Energy Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Silver California is present in almost all the verticals within the industry. This has provided firm in Digital Energy: Disruption in the Electrical Energy Market 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.
Analytics focus
– Silver California 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 Manimala Kumar, Paul Tiffany, Ryan Blood 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.
Cross disciplinary teams
– Horizontal connected teams at the Silver California 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 Silver California 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.
Weaknesses Digital Energy: Disruption in the Electrical Energy Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digital Energy: Disruption in the Electrical Energy Market are -
Interest costs
– Compare to the competition, Silver California 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.
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 Silver California supply chain. Even after few cautionary changes mentioned in the HBR case study - Digital Energy: Disruption in the Electrical Energy Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Silver California vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Silver California 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Manimala Kumar, Paul Tiffany, Ryan Blood suggests that, Silver California 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.
Aligning sales with marketing
– It come across in the case study Digital Energy: Disruption in the Electrical Energy Market 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 Digital Energy: Disruption in the Electrical Energy Market can leverage the sales team experience to cultivate customer relationships as Silver California is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Silver California 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. Silver California 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.
Lack of clear differentiation of Silver California products
– To increase the profitability and margins on the products, Silver California needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Silver California 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 operating costs
– Compare to the competitors, firm in the HBR case study Digital Energy: Disruption in the Electrical Energy Market 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 Silver California 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Digital Energy: Disruption in the Electrical Energy Market, in the dynamic environment Silver California has struggled to respond to the nimble upstart competition. Silver California has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Silver California is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Digital Energy: Disruption in the Electrical Energy Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Digital Energy: Disruption in the Electrical Energy Market | 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 Digital Energy: Disruption in the Electrical Energy Market are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Silver California 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.
Learning at scale
– Online learning technologies has now opened space for Silver California 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Silver California 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.
Buying journey improvements
– Silver California can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Digital Energy: Disruption in the Electrical Energy Market 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
– Silver California 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.
Using analytics as competitive advantage
– Silver California 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 Digital Energy: Disruption in the Electrical Energy Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Silver California to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Silver California is facing challenges because of the dominance of functional experts in the organization. Digital Energy: Disruption in the Electrical Energy Market 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.
Developing new processes and practices
– Silver California 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.
Loyalty marketing
– Silver California 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Silver California 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. Silver California 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. Silver California 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.
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. Silver California can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Silver California can use these opportunities to build new business models that can help the communities that Silver California operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats Digital Energy: Disruption in the Electrical Energy Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digital Energy: Disruption in the Electrical Energy Market are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Digital Energy: Disruption in the Electrical Energy Market, Silver California 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 .
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.
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 Silver California in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Silver California
– 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 Silver California.
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 Silver California.
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 Silver California business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Silver California demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High 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. Silver California needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Silver California has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Silver California 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.
Regulatory challenges
– Silver California 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 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.
Stagnating economy with rate increase
– Silver California 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Silver California 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 Digital Energy: Disruption in the Electrical Energy Market .
Weighted SWOT Analysis of Digital Energy: Disruption in the Electrical Energy Market 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 Digital Energy: Disruption in the Electrical Energy Market 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 Digital Energy: Disruption in the Electrical Energy Market 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 Digital Energy: Disruption in the Electrical Energy Market 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 Digital Energy: Disruption in the Electrical Energy Market 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 Silver California needs to make to build a sustainable competitive advantage.
