PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY
In 2007, the Irish electric utility, Electricity Supply Board (ESB) - 95% publicly owned-, contributed 15% of Ireland's greenhouse gas emissions. It owned the largest point sources of the country's rising carbon dioxide emissions. Due to extraordinary economic development, Ireland's greenhouse gases emissions were continually rising.The situation was clearly untenable. In March 2008, ESB's chief executive Padraig McManus made the startling announcement that the company would become a net-zero carbon emitter by 2035, and would still remain competitive. Under his leadership, ESB was going to lead the way in slowing the growth of Ireland's GHG emissions. He declared that to achieve this goal, ESB would invest a??22 billion over 15 years to develop alternative clean technologies, including energy efficiency measures, the use of clean coal, and the connection of an electricity-generating wind farm to the national grid. His target would make ESB the world's first carbon-neutral electric utility. This strategy presented a number of significant risks: 1) Financial risk - the a??22 billion capital investment had to succeed. 2) Technological and ecological risks - the strategic framework relied on clean coal technology, still being developed. 3) Credibility risk - what if ESB was not able to achieve its goal? 4) Stakeholder risk - Landowners, concerned over health, environment and property prices, were ready to oppose the wind farms. McManus was conscious of the risks, and he also knew that high performing leaders always take risks even while confronting dilemmas such as: Could an electric utility achieve a zero carbon footprint and remain competitive? Can a responsible leader risk jeopardizing the present and future well-being of his company, the environment, and his country? Could he exert his leadership by influencing Irish, and possibly European, climate policy? The case provides an opportunity for a debate on responsible leadership. It was written for use in senior executive and MBA programs. Learning objectives: 1) How can responsible leaders balance the competing pressures for economic performance, ecological protection and social responsibility and continue growing the business? 2) What kinds of risks can responsible leaders undertake? 3) How can responsible leaders create value for their shareholders and stakeholders? 4) Can the leader of small European electric utility influence the entire European electric utility sector?
Authors :: George Kohlrieser, Francisco Szekely, Sophie Coughlan
Swot Analysis of "PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY" written by George Kohlrieser, Francisco Szekely, Sophie Coughlan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Esb Utility facing as an external strategic factors. Some of the topics covered in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY case study are - Strategic Management Strategies, Social responsibility, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Esb Utility, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY can be done for the following purposes –
1. Strategic planning using facts provided in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY case study
2. Improving business portfolio management of Esb Utility
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 Esb Utility
Strengths PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Esb Utility in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY Harvard Business Review case study are -
Ability to recruit top talent
– Esb Utility is one of the leading recruiters in the industry. Managers in the PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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
– Esb Utility is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Esb Utility has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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.
Cross disciplinary teams
– Horizontal connected teams at the Esb Utility 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.
Learning organization
- Esb Utility 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 Esb Utility is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Esb Utility has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Esb Utility to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Esb Utility
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Esb Utility does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Esb Utility is present in almost all the verticals within the industry. This has provided firm in PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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.
Effective Research and Development (R&D)
– Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Esb Utility in the sector have low bargaining power. PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Esb Utility to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Leadership & Managing People industry
– PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY firm has clearly differentiated products in the market place. This has enabled Esb Utility to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Esb Utility to invest into research and development (R&D) and innovation.
Weaknesses PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY are -
Skills based hiring
– The stress on hiring functional specialists at Esb Utility 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.
High operating costs
– Compare to the competitors, firm in the HBR case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 Esb Utility 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY, is just above the industry average. Esb Utility 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, Esb Utility 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. Esb Utility 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY, it seems that the employees of Esb Utility 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY, in the dynamic environment Esb Utility has struggled to respond to the nimble upstart competition. Esb Utility has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Esb Utility has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, George Kohlrieser, Francisco Szekely, Sophie Coughlan suggests that, Esb Utility 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.
Capital Spending Reduction
– Even during the low interest decade, Esb Utility 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 Esb Utility has relatively successful track record of launching new products.
Opportunities PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY | 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY are -
Better consumer reach
– The expansion of the 5G network will help Esb Utility to increase its market reach. Esb Utility 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Esb Utility 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
– Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Esb Utility to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Esb Utility in the consumer business. Now Esb Utility can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Esb Utility 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.
Loyalty marketing
– Esb Utility 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Esb Utility 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 Esb Utility to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Esb Utility 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Esb Utility 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Esb Utility 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, PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Esb Utility can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Esb Utility 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
– Esb Utility can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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.
Threats PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY are -
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. Esb Utility can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Esb Utility has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Esb Utility 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.
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 Esb Utility in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY, Esb Utility 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Esb Utility 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY .
Environmental challenges
– Esb Utility 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. Esb Utility can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Esb Utility
– 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 Esb Utility.
Stagnating economy with rate increase
– Esb Utility 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.
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 Esb Utility.
High dependence on third party suppliers
– Esb Utility 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.
Shortening product life cycle
– it is one of the major threat that Esb Utility is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Esb Utility with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Esb Utility 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.
Weighted SWOT Analysis of PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 PLAYING TO WIN: LEADERSHIP AND SUSTAINABILITY AT ESB ELECTRIC UTILITY 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 Esb Utility needs to make to build a sustainable competitive advantage.