EDP Energias de Portugal ADR (EDPFY) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for EDP Energias de Portugal ADR (United States)
Based on various researches at Oak Spring University , EDP Energias de Portugal ADR is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is backlash against globalization, talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of EDP Energias de Portugal ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that EDP Energias de Portugal ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the EDP Energias de Portugal ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR can be done for the following purposes –
1. Strategic planning of EDP Energias de Portugal ADR
2. Improving business portfolio management of EDP Energias de Portugal ADR
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 EDP Energias de Portugal ADR
Strengths of EDP Energias de Portugal ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of EDP Energias de Portugal ADR are -
Cross disciplinary teams
– Horizontal connected teams at the EDP Energias de Portugal ADR 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.
Strong track record of project management in the Electric Utilities industry
– EDP Energias de Portugal ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– EDP Energias de Portugal ADR has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled EDP Energias de Portugal ADR to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of EDP Energias de Portugal ADR in Electric Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at EDP Energias de Portugal ADR emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Electric Utilities industry
– EDP Energias de Portugal ADR has clearly differentiated products in the market place. This has enabled EDP Energias de Portugal ADR to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped EDP Energias de Portugal ADR to invest into research and development (R&D) and innovation.
Diverse revenue streams
– EDP Energias de Portugal ADR is present in almost all the verticals within the Electric Utilities industry. This has provided EDP Energias de Portugal ADR 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
– EDP Energias de Portugal ADR is one of the most innovative firm in Electric Utilities sector.
Effective Research and Development (R&D)
– EDP Energias de Portugal ADR has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – EDP Energias de Portugal ADR 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.
High switching costs
– The high switching costs that EDP Energias de Portugal ADR 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.
Low bargaining power of suppliers
– Suppliers of EDP Energias de Portugal ADR in the Utilities sector have low bargaining power. EDP Energias de Portugal ADR has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps EDP Energias de Portugal ADR to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of EDP Energias de Portugal ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EDP Energias de Portugal ADR are -
Interest costs
– Compare to the competition, EDP Energias de Portugal ADR 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.
Compensation and incentives
– The revenue per employee of EDP Energias de Portugal ADR 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.
Workers concerns about automation
– As automation is fast increasing in the Electric Utilities industry, EDP Energias de Portugal ADR 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.
High dependence on EDP Energias de Portugal ADR ‘s star products
– The top 2 products and services of EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, EDP Energias de Portugal ADR 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. EDP Energias de Portugal ADR 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.
Lack of clear differentiation of EDP Energias de Portugal ADR products
– To increase the profitability and margins on the products, EDP Energias de Portugal ADR needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of EDP Energias de Portugal ADR, 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 cash cycle compare to competitors
EDP Energias de Portugal ADR has a high cash cycle compare to other players in the Electric Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in United States, EDP Energias de Portugal ADR 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.
Capital Spending Reduction
– Even during the low interest decade, EDP Energias de Portugal ADR 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.
EDP Energias de Portugal ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of EDP Energias de Portugal ADR are -
Manufacturing automation
– EDP Energias de Portugal ADR 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.
Using analytics as competitive advantage
– EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR to build a competitive advantage using analytics. The analytics driven competitive advantage can help EDP Energias de Portugal ADR to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for EDP Energias de Portugal ADR 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects EDP Energias de Portugal ADR can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– EDP Energias de Portugal ADR 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, EDP Energias de Portugal ADR can use these opportunities to build new business models that can help the communities that EDP Energias de Portugal ADR operates in. Secondly it can use opportunities from government spending in Electric Utilities sector.
Loyalty marketing
– EDP Energias de Portugal ADR 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.
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. EDP Energias de Portugal ADR 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. EDP Energias de Portugal ADR 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.
Leveraging digital technologies
– EDP Energias de Portugal ADR 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. EDP Energias de Portugal ADR can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help EDP Energias de Portugal ADR to increase its market reach. EDP Energias de Portugal ADR 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.
Building a culture of innovation
– managers at EDP Energias de Portugal ADR 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.
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 EDP Energias de Portugal ADR in the Electric Utilities industry. Now EDP Energias de Portugal ADR can target international markets with far fewer capital restrictions requirements than the existing system.
Threats EDP Energias de Portugal ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of EDP Energias de Portugal ADR are -
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 EDP Energias de Portugal ADR business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of EDP Energias de Portugal ADR
– 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 EDP Energias de Portugal ADR.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for EDP Energias de Portugal ADR 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.
Regulatory challenges
– EDP Energias de Portugal ADR 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, EDP Energias de Portugal ADR 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. EDP Energias de Portugal ADR 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.
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. EDP Energias de Portugal ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 EDP Energias de Portugal ADR in the Electric Utilities sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– EDP Energias de Portugal ADR 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.
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 EDP Energias de Portugal ADR.
Environmental challenges
– EDP Energias de Portugal ADR 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. EDP Energias de Portugal ADR can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.
High dependence on third party suppliers
– EDP Energias de Portugal ADR 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.
Consumer confidence and its impact on EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR 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 EDP Energias de Portugal ADR needs to make to build a sustainable competitive advantage.