Energetica Minas Gerais Cemig C (CIGc) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Energetica Minas Gerais Cemig C (United States)
Based on various researches at Oak Spring University , Energetica Minas Gerais Cemig C is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, supply chains are disrupted by pandemic , wage bills are increasing, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Energetica Minas Gerais Cemig C
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Energetica Minas Gerais Cemig C can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Energetica Minas Gerais Cemig C, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C can be done for the following purposes –
1. Strategic planning of Energetica Minas Gerais Cemig C
2. Improving business portfolio management of Energetica Minas Gerais Cemig C
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 Energetica Minas Gerais Cemig C
Strengths of Energetica Minas Gerais Cemig C | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Energetica Minas Gerais Cemig C are -
Superior customer experience
– The customer experience strategy of Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C in the Utilities sector have low bargaining power. Energetica Minas Gerais Cemig C has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Energetica Minas Gerais Cemig C to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Energetica Minas Gerais Cemig C
– The covid-19 pandemic has put organizational resilience at the centre of everthing Energetica Minas Gerais Cemig C does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Energetica Minas Gerais Cemig C has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Energetica Minas Gerais Cemig C to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Electric Utilities industry
– Energetica Minas Gerais Cemig C has clearly differentiated products in the market place. This has enabled Energetica Minas Gerais Cemig C to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped Energetica Minas Gerais Cemig C to invest into research and development (R&D) and innovation.
Training and development
– Energetica Minas Gerais Cemig C 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.
Learning organization
- Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Energetica Minas Gerais Cemig C emphasize – knowledge, initiative, and innovation.
Digital Transformation in Electric Utilities industry
- digital transformation varies from industry to industry. For Energetica Minas Gerais Cemig C digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Energetica Minas Gerais Cemig C 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.
Diverse revenue streams
– Energetica Minas Gerais Cemig C is present in almost all the verticals within the Electric Utilities industry. This has provided Energetica Minas Gerais Cemig C 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.
Innovation driven organization
– Energetica Minas Gerais Cemig C is one of the most innovative firm in Electric Utilities sector.
Successful track record of launching new products
– Energetica Minas Gerais Cemig C has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Energetica Minas Gerais Cemig C 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.
Operational resilience
– The operational resilience strategy of Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Energetica Minas Gerais Cemig C are -
Lack of clear differentiation of Energetica Minas Gerais Cemig C products
– To increase the profitability and margins on the products, Energetica Minas Gerais Cemig C needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Energetica Minas Gerais Cemig C 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. Energetica Minas Gerais Cemig C should strive to include more intangible value offerings along with its core products and services.
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 Energetica Minas Gerais Cemig C supply chain. Even after few cautionary changes, Energetica Minas Gerais Cemig C is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Energetica Minas Gerais Cemig C vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Energetica Minas Gerais Cemig C, 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 dependence on Energetica Minas Gerais Cemig C ‘s star products
– The top 2 products and services of Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of United States, Energetica Minas Gerais Cemig C needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Energetica Minas Gerais Cemig C is slow explore the new channels of communication. These new channels of communication can help Energetica Minas Gerais Cemig C to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Energetica Minas Gerais Cemig C strategy
– From the outside it seems that the employees of Energetica Minas Gerais Cemig C 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.
Aligning sales with marketing
– From the outside it seems that Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C can leverage the sales team experience to cultivate customer relationships as Energetica Minas Gerais Cemig C is planning to shift buying processes online.
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in United States, Energetica Minas Gerais Cemig C 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.
Interest costs
– Compare to the competition, Energetica Minas Gerais Cemig C 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.
Energetica Minas Gerais Cemig C Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Energetica Minas Gerais Cemig C are -
Developing new processes and practices
– Energetica Minas Gerais Cemig C 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Energetica Minas Gerais Cemig C 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.
Building a culture of innovation
– managers at Energetica Minas Gerais Cemig C 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 Electric Utilities industry.
Learning at scale
– Online learning technologies has now opened space for Energetica Minas Gerais Cemig C 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
– Energetica Minas Gerais Cemig C 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.
Leveraging digital technologies
– Energetica Minas Gerais Cemig C 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.
Manufacturing automation
– Energetica Minas Gerais Cemig C 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electric Utilities industry, but it has also influenced the consumer preferences. Energetica Minas Gerais Cemig C can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Energetica Minas Gerais Cemig C in the Electric Utilities industry. Now Energetica Minas Gerais Cemig C can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Energetica Minas Gerais Cemig C to increase its market reach. Energetica Minas Gerais Cemig C 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.
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. Energetica Minas Gerais Cemig C can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Energetica Minas Gerais Cemig C 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C to hire the very best people irrespective of their geographical location.
Threats Energetica Minas Gerais Cemig C External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Energetica Minas Gerais Cemig C are -
Regulatory challenges
– Energetica Minas Gerais Cemig C needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Electric Utilities industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Energetica Minas Gerais Cemig C 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. Energetica Minas Gerais Cemig C can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Energetica Minas Gerais Cemig C has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Energetica Minas Gerais Cemig C 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C prominent markets.
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 Energetica Minas Gerais Cemig C.
Environmental challenges
– Energetica Minas Gerais Cemig C 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. Energetica Minas Gerais Cemig C can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.
High dependence on third party suppliers
– Energetica Minas Gerais Cemig C 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.
Stagnating economy with rate increase
– Energetica Minas Gerais Cemig C 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.
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.
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 Energetica Minas Gerais Cemig C business can come under increasing regulations regarding data privacy, data security, etc.
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.
Consumer confidence and its impact on Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C 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 Energetica Minas Gerais Cemig C needs to make to build a sustainable competitive advantage.