SWOT Analysis / TOWS Matrix for Elettra Investimenti SpA (Italy)
Based on various researches at Oak Spring University , Elettra Investimenti SpA is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing commodity prices, technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Elettra Investimenti SpA
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Elettra Investimenti SpA can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Elettra Investimenti SpA, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Elettra Investimenti SpA 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 Elettra Investimenti SpA can be done for the following purposes –
1. Strategic planning of Elettra Investimenti SpA
2. Improving business portfolio management of Elettra Investimenti SpA
3. Assessing feasibility of the new initiative in Italy
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Elettra Investimenti SpA
Strengths of Elettra Investimenti SpA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Elettra Investimenti SpA are -
Learning organization
- Elettra Investimenti SpA 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 Elettra Investimenti SpA is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Elettra Investimenti SpA emphasize – knowledge, initiative, and innovation.
High brand equity
– Elettra Investimenti SpA has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Elettra Investimenti SpA to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Elettra Investimenti SpA is one of the leading players in the Business Services industry in Italy. It is in a position to attract the best talent available in Italy. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Elettra Investimenti SpA digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Elettra Investimenti SpA 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 of Elettra Investimenti SpA comprises – understanding the underlying the factors in the Business Services 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.
Analytics focus
– Elettra Investimenti SpA 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 Business Services industry. The technology infrastructure of Italy is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Elettra Investimenti SpA is one of the most innovative firm in Business Services sector.
Organizational Resilience of Elettra Investimenti SpA
– The covid-19 pandemic has put organizational resilience at the centre of everthing Elettra Investimenti SpA does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Elettra Investimenti SpA in the Services sector have low bargaining power. Elettra Investimenti SpA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Elettra Investimenti SpA to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Elettra Investimenti SpA has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Elettra Investimenti SpA have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Business Services industry
– Elettra Investimenti SpA is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Elettra Investimenti SpA 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 of Elettra Investimenti SpA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Elettra Investimenti SpA are -
Low market penetration in new markets
– Outside its home market of Italy, Elettra Investimenti SpA needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Elettra Investimenti SpA 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 Elettra Investimenti SpA ‘s star products
– The top 2 products and services of Elettra Investimenti SpA still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Elettra Investimenti SpA has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Elettra Investimenti SpA 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 Business Services industry using digital technology.
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at Elettra Investimenti SpA 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.
Lack of clear differentiation of Elettra Investimenti SpA products
– To increase the profitability and margins on the products, Elettra Investimenti SpA needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Elettra Investimenti SpA has high operating costs in the Business Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Elettra Investimenti SpA lucrative customers.
Products dominated business model
– Even though Elettra Investimenti SpA has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Elettra Investimenti SpA should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Elettra Investimenti SpA is dominated by functional specialists. It is not different from other players in the Business Services industry, but Elettra Investimenti SpA needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Elettra Investimenti SpA to focus more on services in the Business Services industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Elettra Investimenti SpA, it seems that company is thinking out the frontier risks that can impact Business Services industry. 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.
Slow to strategic competitive environment developments
– As Elettra Investimenti SpA is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Elettra Investimenti SpA Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Elettra Investimenti SpA are -
Leveraging digital technologies
– Elettra Investimenti SpA 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Elettra Investimenti SpA can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Elettra Investimenti SpA in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Elettra Investimenti SpA to increase its market reach. Elettra Investimenti SpA 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Elettra Investimenti SpA 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 Elettra Investimenti SpA to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Elettra Investimenti SpA can use these opportunities to build new business models that can help the communities that Elettra Investimenti SpA operates in. Secondly it can use opportunities from government spending in Business Services sector.
Building a culture of innovation
– managers at Elettra Investimenti SpA can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Business Services industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Elettra Investimenti SpA 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 Elettra Investimenti SpA to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Elettra Investimenti SpA can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Elettra Investimenti SpA can improve the customer journey of consumers in the Business Services industry by using analytics and artificial intelligence. It 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.
Learning at scale
– Online learning technologies has now opened space for Elettra Investimenti SpA 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, Elettra Investimenti SpA is facing challenges because of the dominance of functional experts in the organization. Elettra Investimenti SpA can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Elettra Investimenti SpA has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled Elettra Investimenti SpA to build a competitive advantage using analytics. The analytics driven competitive advantage can help Elettra Investimenti SpA to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Elettra Investimenti SpA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Elettra Investimenti SpA are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Elettra Investimenti SpA in Business Services industry. The Business Services 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.
Shortening product life cycle
– it is one of the major threat that Elettra Investimenti SpA is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Elettra Investimenti SpA 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.
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.
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 Elettra Investimenti SpA in the Business Services sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Elettra Investimenti SpA 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 Business Services industry.
Increasing wage structure of Elettra Investimenti SpA
– 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 Elettra Investimenti SpA.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Elettra Investimenti SpA may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
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 Elettra Investimenti SpA.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Elettra Investimenti SpA 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
– Elettra Investimenti SpA 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.
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 Elettra Investimenti SpA business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Elettra Investimenti SpA 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. Elettra Investimenti SpA can take advantage of this fund but it will also bring new competitors in the Business Services industry.
Weighted SWOT Analysis of Elettra Investimenti SpA Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Elettra Investimenti SpA 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 Elettra Investimenti SpA 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 Elettra Investimenti SpA 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 Elettra Investimenti SpA 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 Elettra Investimenti SpA needs to make to build a sustainable competitive advantage.