AES TIETE E UNT N2 (TIET11) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / 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 – wage bills are increasing, geopolitical disruptions, increasing energy prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, etc
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.
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
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 -
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.
Analytics focus
– AES TIETE E UNT N2 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 Electric Utilities industry. The technology infrastructure of Brazil 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.
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.
Innovation driven organization
– AES TIETE E UNT N2 is one of the most innovative firm in Electric Utilities sector.
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.
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.
Diverse revenue streams
– AES TIETE E UNT N2 is present in almost all the verticals within the Electric Utilities industry. This has provided AES TIETE E UNT N2 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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy of AES TIETE E UNT N2 comprises – understanding the underlying the factors in the Electric Utilities 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.
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 -
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.
Low market penetration in new markets
– Outside its home market of Brazil, AES TIETE E UNT N2 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that AES TIETE E UNT N2 needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at AES TIETE E UNT N2 can leverage the sales team experience to cultivate customer relationships as AES TIETE E UNT N2 is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, AES TIETE E UNT N2 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 Electric Utilities industry using digital technology.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the Electric Utilities industry, AES TIETE E UNT N2 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.
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.
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 AES TIETE E UNT N2 supply chain. Even after few cautionary changes, AES TIETE E UNT N2 is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left AES TIETE E UNT N2 vulnerable to further global disruptions in South East Asia.
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.
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.
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 -
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.
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.
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.
Leveraging digital technologies
– AES TIETE E UNT N2 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.
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.
Using analytics as competitive advantage
– AES TIETE E UNT N2 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electric Utilities sector. This continuous investment in analytics has enabled AES TIETE E UNT N2 to build a competitive advantage using analytics. The analytics driven competitive advantage can help AES TIETE E UNT N2 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Buying journey improvements
– AES TIETE E UNT N2 can improve the customer journey of consumers in the Electric Utilities 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for AES TIETE E UNT N2 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 AES TIETE E UNT N2 to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects AES TIETE E UNT N2 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help AES TIETE E UNT N2 to increase its market reach. AES TIETE E UNT N2 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.
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 -
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.
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. AES TIETE E UNT N2 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.
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 AES TIETE E UNT N2 in the Electric Utilities sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– AES TIETE E UNT N2 has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, AES TIETE E UNT N2 needs to keep up with the evolution of technology in the Electric Utilities 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.
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.
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.
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.