Based on various researches at Oak Spring University , Centrais Electricas Brasileiras is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing energy prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Centrais Electricas Brasileiras
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Centrais Electricas Brasileiras can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Centrais Electricas Brasileiras, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras can be done for the following purposes –
1. Strategic planning of Centrais Electricas Brasileiras
2. Improving business portfolio management of Centrais Electricas Brasileiras
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Centrais Electricas Brasileiras
Strengths of Centrais Electricas Brasileiras | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Centrais Electricas Brasileiras are -
Highly skilled collaborators
– Centrais Electricas Brasileiras has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Centrais Electricas Brasileiras have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Centrais Electricas Brasileiras 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.
Sustainable margins compare to other players in industry
– Centrais Electricas Brasileiras has clearly differentiated products in the market place. This has enabled Centrais Electricas Brasileiras to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Centrais Electricas Brasileiras to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Centrais Electricas Brasileiras 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.
Superior customer experience
– The customer experience strategy of Centrais Electricas Brasileiras in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Centrais Electricas Brasileiras emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Centrais Electricas Brasileiras has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Centrais Electricas Brasileiras staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Centrais Electricas Brasileiras 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 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.
Successful track record of launching new products
– Centrais Electricas Brasileiras has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Centrais Electricas Brasileiras 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.
Low bargaining power of suppliers
– Suppliers of Centrais Electricas Brasileiras in the sector have low bargaining power. Centrais Electricas Brasileiras has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Centrais Electricas Brasileiras to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Centrais Electricas Brasileiras is present in almost all the verticals within the industry. This has provided Centrais Electricas Brasileiras 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.
Ability to lead change in
– Centrais Electricas Brasileiras is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Centrais Electricas Brasileiras in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Centrais Electricas Brasileiras | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Centrais Electricas Brasileiras are -
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Centrais Electricas Brasileiras 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 industry.
Lack of clear differentiation of Centrais Electricas Brasileiras products
– To increase the profitability and margins on the products, Centrais Electricas Brasileiras needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Centrais Electricas Brasileiras ‘s star products
– The top 2 products and services of Centrais Electricas Brasileiras still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Centrais Electricas Brasileiras has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Centrais Electricas Brasileiras is slow explore the new channels of communication. These new channels of communication can help Centrais Electricas Brasileiras to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Centrais Electricas Brasileiras 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.
Increasing silos among functional specialists
– The organizational structure of Centrais Electricas Brasileiras is dominated by functional specialists. It is not different from other players in the industry, but Centrais Electricas Brasileiras needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Centrais Electricas Brasileiras to focus more on services in the industry rather than just following the product oriented approach.
Skills based hiring in industry
– The stress on hiring functional specialists at Centrais Electricas Brasileiras has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Centrais Electricas Brasileiras has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Centrais Electricas Brasileiras 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 industry using digital technology.
Need for greater diversity
– Centrais Electricas Brasileiras 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.
High operating costs
– Compare to the competitors, Centrais Electricas Brasileiras has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Centrais Electricas Brasileiras lucrative customers.
Centrais Electricas Brasileiras Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Centrais Electricas Brasileiras are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Centrais Electricas Brasileiras in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Centrais Electricas Brasileiras 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 industry.
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. Centrais Electricas Brasileiras can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Centrais Electricas Brasileiras can use these opportunities to build new business models that can help the communities that Centrais Electricas Brasileiras operates in. Secondly it can use opportunities from government spending in sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Centrais Electricas Brasileiras 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. Centrais Electricas Brasileiras 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.
Learning at scale
– Online learning technologies has now opened space for Centrais Electricas Brasileiras to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Centrais Electricas Brasileiras is facing challenges because of the dominance of functional experts in the organization. Centrais Electricas Brasileiras can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Centrais Electricas Brasileiras can develop new processes and procedures in 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.
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 Centrais Electricas Brasileiras 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.
Loyalty marketing
– Centrais Electricas Brasileiras 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Centrais Electricas Brasileiras in the industry. Now Centrais Electricas Brasileiras can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Centrais Electricas Brasileiras External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Centrais Electricas Brasileiras are -
Shortening product life cycle
– it is one of the major threat that Centrais Electricas Brasileiras is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Centrais Electricas Brasileiras 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.
Stagnating economy with rate increase
– Centrais Electricas Brasileiras 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 industry.
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 Centrais Electricas Brasileiras in the sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Centrais Electricas Brasileiras can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Centrais Electricas Brasileiras
– 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 Centrais Electricas Brasileiras.
High dependence on third party suppliers
– Centrais Electricas Brasileiras 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.
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.
Regulatory challenges
– Centrais Electricas Brasileiras 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 industry regulations.
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 Centrais Electricas Brasileiras 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 industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Centrais Electricas Brasileiras in industry. The 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. Centrais Electricas Brasileiras needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Centrais Electricas Brasileiras Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras 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 Centrais Electricas Brasileiras needs to make to build a sustainable competitive advantage.