Based on various researches at Oak Spring University , Brookfield Infrastructure Partners is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing energy prices, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing commodity prices,
there is backlash against globalization, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Brookfield Infrastructure Partners
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Brookfield Infrastructure Partners can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brookfield Infrastructure Partners, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners can be done for the following purposes –
1. Strategic planning of Brookfield Infrastructure Partners
2. Improving business portfolio management of Brookfield Infrastructure Partners
3. Assessing feasibility of the new initiative in United States
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Brookfield Infrastructure Partners
Strengths of Brookfield Infrastructure Partners | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brookfield Infrastructure Partners are -
Sustainable margins compare to other players in Electric Utilities industry
– Brookfield Infrastructure Partners has clearly differentiated products in the market place. This has enabled Brookfield Infrastructure Partners to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped Brookfield Infrastructure Partners to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Brookfield Infrastructure Partners in the Utilities sector have low bargaining power. Brookfield Infrastructure Partners has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Brookfield Infrastructure Partners to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Electric Utilities industry
- digital transformation varies from industry to industry. For Brookfield Infrastructure Partners digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Brookfield Infrastructure Partners 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.
Highly skilled collaborators
– Brookfield Infrastructure Partners has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electric Utilities industry. Secondly the value chain collaborators of Brookfield Infrastructure Partners have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Brookfield Infrastructure Partners is one of the most innovative firm in Electric Utilities sector.
Analytics focus
– Brookfield Infrastructure Partners 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 United States 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.
Cross disciplinary teams
– Horizontal connected teams at the Brookfield Infrastructure Partners 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.
Organizational Resilience of Brookfield Infrastructure Partners
– The covid-19 pandemic has put organizational resilience at the centre of everthing Brookfield Infrastructure Partners does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Brookfield Infrastructure Partners has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Brookfield Infrastructure Partners staying ahead in the Electric Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Brookfield Infrastructure Partners 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.
Strong track record of project management in the Electric Utilities industry
– Brookfield Infrastructure Partners 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
– Brookfield Infrastructure Partners has one of the best training and development program in Utilities industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses of Brookfield Infrastructure Partners | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Brookfield Infrastructure Partners are -
Slow to strategic competitive environment developments
– As Brookfield Infrastructure Partners 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.
Compensation and incentives
– The revenue per employee of Brookfield Infrastructure Partners 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.
Slow decision making process
– As mentioned earlier in the report, Brookfield Infrastructure Partners has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electric Utilities industry over the last five years. Brookfield Infrastructure Partners 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.
Increasing silos among functional specialists
– The organizational structure of Brookfield Infrastructure Partners is dominated by functional specialists. It is not different from other players in the Electric Utilities industry, but Brookfield Infrastructure Partners needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Brookfield Infrastructure Partners to focus more on services in the Electric Utilities industry rather than just following the product oriented approach.
Lack of clear differentiation of Brookfield Infrastructure Partners products
– To increase the profitability and margins on the products, Brookfield Infrastructure Partners needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Brookfield Infrastructure Partners has some of the most successful models in the Electric Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Brookfield Infrastructure Partners should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Brookfield Infrastructure Partners is slow explore the new channels of communication. These new channels of communication can help Brookfield Infrastructure Partners to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Brookfield Infrastructure Partners 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.
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in United States, Brookfield Infrastructure Partners 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 Electric Utilities industry.
High operating costs
– Compare to the competitors, Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners lucrative customers.
Need for greater diversity
– Brookfield Infrastructure Partners 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.
Brookfield Infrastructure Partners Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Brookfield Infrastructure Partners are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Brookfield Infrastructure Partners 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.
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 Brookfield Infrastructure Partners in the Electric Utilities industry. Now Brookfield Infrastructure Partners can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Brookfield Infrastructure Partners has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Brookfield Infrastructure Partners to build a more holistic ecosystem for Brookfield Infrastructure Partners products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Brookfield Infrastructure Partners 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.
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 Brookfield Infrastructure Partners 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.
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. Brookfield Infrastructure Partners 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. Brookfield Infrastructure Partners 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.
Manufacturing automation
– Brookfield Infrastructure Partners 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.
Learning at scale
– Online learning technologies has now opened space for Brookfield Infrastructure Partners 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.
Buying journey improvements
– Brookfield Infrastructure Partners 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, Brookfield Infrastructure Partners is facing challenges because of the dominance of functional experts in the organization. Brookfield Infrastructure Partners 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.
Loyalty marketing
– Brookfield Infrastructure Partners has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Brookfield Infrastructure Partners can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Brookfield Infrastructure Partners 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.
Threats Brookfield Infrastructure Partners External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Brookfield Infrastructure Partners are -
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. Brookfield Infrastructure Partners needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electric Utilities industry are lowering. It can presents Brookfield Infrastructure Partners with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electric Utilities sector.
Increasing wage structure of Brookfield Infrastructure Partners
– 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 Brookfield Infrastructure Partners.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Brookfield Infrastructure Partners 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.
Stagnating economy with rate increase
– Brookfield Infrastructure Partners 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.
Technology acceleration in Forth Industrial Revolution
– Brookfield Infrastructure Partners has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Brookfield Infrastructure Partners 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 dependence on third party suppliers
– Brookfield Infrastructure Partners 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.
Environmental challenges
– Brookfield Infrastructure Partners 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. Brookfield Infrastructure Partners can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Brookfield Infrastructure Partners 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.
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. Brookfield Infrastructure Partners can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Brookfield Infrastructure Partners is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Brookfield Infrastructure Partners Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners 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 Brookfield Infrastructure Partners needs to make to build a sustainable competitive advantage.
