AES TIETE E UNT N2 (TIET11) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for AES TIETE E UNT N2 (Brazil)

Based on various researches at Oak Spring University , AES TIETE E UNT N2 is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of AES TIETE E UNT N2

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AES TIETE E UNT N2 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AES TIETE E UNT N2, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AES TIETE E UNT N2 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of AES TIETE E UNT N2 can be done for the following purposes –
1. Strategic planning of AES TIETE E UNT N2
2. Improving business portfolio management of AES TIETE E UNT N2
3. Assessing feasibility of the new initiative in Brazil
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of AES TIETE E UNT N2

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Strengths of AES TIETE E UNT N2 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of AES TIETE E UNT N2 are -

Low bargaining power of suppliers

– Suppliers of AES TIETE E UNT N2 in the Utilities sector have low bargaining power. AES TIETE E UNT N2 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AES TIETE E UNT N2 to manage not only supply disruptions but also source products at highly competitive prices.

High switching costs

– The high switching costs that AES TIETE E UNT N2 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.

Superior customer experience

– The customer experience strategy of AES TIETE E UNT N2 in Electric Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Strong track record of project management in the Electric Utilities industry

– AES TIETE E UNT N2 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Organizational Resilience of AES TIETE E UNT N2

– The covid-19 pandemic has put organizational resilience at the centre of everthing AES TIETE E UNT N2 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Sustainable margins compare to other players in Electric Utilities industry

– AES TIETE E UNT N2 has clearly differentiated products in the market place. This has enabled AES TIETE E UNT N2 to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped AES TIETE E UNT N2 to invest into research and development (R&D) and innovation.

Ability to lead change in Electric Utilities

– AES TIETE E UNT N2 is one of the leading players in the Electric Utilities industry in Brazil. Over the years it has not only transformed the business landscape in the Electric Utilities industry in Brazil but also across the existing markets. The ability to lead change has enabled AES TIETE E UNT N2 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– AES TIETE E UNT N2 is one of the leading players in the Electric Utilities industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.

Digital Transformation in Electric Utilities industry

- digital transformation varies from industry to industry. For AES TIETE E UNT N2 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. AES TIETE E UNT N2 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.

Successful track record of launching new products

– AES TIETE E UNT N2 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. AES TIETE E UNT N2 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.

High brand equity

– AES TIETE E UNT N2 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled AES TIETE E UNT N2 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- AES TIETE E UNT N2 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 AES TIETE E UNT N2 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at AES TIETE E UNT N2 emphasize – knowledge, initiative, and innovation.

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Weaknesses of AES TIETE E UNT N2 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of AES TIETE E UNT N2 are -

Employees’ less understanding of AES TIETE E UNT N2 strategy

– From the outside it seems that the employees of AES TIETE E UNT N2 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.

Lack of clear differentiation of AES TIETE E UNT N2 products

– To increase the profitability and margins on the products, AES TIETE E UNT N2 needs to provide more differentiated products than what it is currently offering in the marketplace.

Interest costs

– Compare to the competition, AES TIETE E UNT N2 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.

Slow to strategic competitive environment developments

– As AES TIETE E UNT N2 is one of the leading players in the Electric Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electric Utilities industry in last five years.

Need for greater diversity

– AES TIETE E UNT N2 has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, AES TIETE E UNT N2 is slow explore the new channels of communication. These new channels of communication can help AES TIETE E UNT N2 to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.

Compensation and incentives

– The revenue per employee of AES TIETE E UNT N2 is just above the Electric Utilities industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

High operating costs

– Compare to the competitors, AES TIETE E UNT N2 has high operating costs in the Electric Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract AES TIETE E UNT N2 lucrative customers.

High cash cycle compare to competitors

AES TIETE E UNT N2 has a high cash cycle compare to other players in the Electric Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High dependence on AES TIETE E UNT N2 ‘s star products

– The top 2 products and services of AES TIETE E UNT N2 still accounts for major business revenue. This dependence on star products in Electric Utilities industry has resulted into insufficient focus on developing new products, even though AES TIETE E UNT N2 has relatively successful track record of launching new products.

No frontier risks strategy

– From the 10K / annual statement of AES TIETE E UNT N2, it seems that company is thinking out the frontier risks that can impact Electric Utilities 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.

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AES TIETE E UNT N2 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of AES TIETE E UNT N2 are -

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. AES TIETE E UNT N2 can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Learning at scale

– Online learning technologies has now opened space for AES TIETE E UNT N2 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.

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 AES TIETE E UNT N2 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, AES TIETE E UNT N2 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.

Use of Bitcoin and other crypto currencies for transactions in Electric Utilities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for AES TIETE E UNT N2 in the Electric Utilities industry. Now AES TIETE E UNT N2 can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, AES TIETE E UNT N2 can use these opportunities to build new business models that can help the communities that AES TIETE E UNT N2 operates in. Secondly it can use opportunities from government spending in Electric Utilities sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, AES TIETE E UNT N2 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 AES TIETE E UNT N2 to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of AES TIETE E UNT N2 has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help AES TIETE E UNT N2 to build a more holistic ecosystem for AES TIETE E UNT N2 products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Developing new processes and practices

– AES TIETE E UNT N2 can develop new processes and procedures in Electric Utilities 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.

Manufacturing automation

– AES TIETE E UNT N2 can use the latest technology developments to improve its manufacturing and designing process in Electric Utilities sector. 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for AES TIETE E UNT N2 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Electric Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. AES TIETE E UNT N2 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. AES TIETE E UNT N2 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, AES TIETE E UNT N2 is facing challenges because of the dominance of functional experts in the organization. AES TIETE E UNT N2 can utilize new technology in the field of Electric Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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Threats AES TIETE E UNT N2 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of AES TIETE E UNT N2 are -

Consumer confidence and its impact on AES TIETE E UNT N2 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 Electric Utilities industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, AES TIETE E UNT N2 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 AES TIETE E UNT N2 prominent markets.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, AES TIETE E UNT N2 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electric Utilities sector.

High dependence on third party suppliers

– AES TIETE E UNT N2 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.

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 AES TIETE E UNT N2.

Increasing wage structure of AES TIETE E UNT N2

– 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 AES TIETE E UNT N2.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for AES TIETE E UNT N2 in Electric Utilities industry. The Electric Utilities 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. AES TIETE E UNT N2 needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that AES TIETE E UNT N2 is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 AES TIETE E UNT N2 business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– AES TIETE E UNT N2 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 Electric Utilities industry.

Easy access to finance

– Easy access to finance in Electric Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. AES TIETE E UNT N2 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– AES TIETE E UNT N2 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. AES TIETE E UNT N2 can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.

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Weighted SWOT Analysis of AES TIETE E UNT N2 Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AES TIETE E UNT N2 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 AES TIETE E UNT N2 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 AES TIETE E UNT N2 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 AES TIETE E UNT N2 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 AES TIETE E UNT N2 needs to make to build a sustainable competitive advantage.

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