NextEra Energy Deb K (NEE_pk) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for NextEra Energy Deb K (United States)
Based on various researches at Oak Spring University , NextEra Energy Deb K is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of NextEra Energy Deb K
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NextEra Energy Deb K can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NextEra Energy Deb K, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NextEra Energy Deb K 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 NextEra Energy Deb K can be done for the following purposes –
1. Strategic planning of NextEra Energy Deb K
2. Improving business portfolio management of NextEra Energy Deb K
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 NextEra Energy Deb K
Strengths of NextEra Energy Deb K | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NextEra Energy Deb K are -
Successful track record of launching new products
– NextEra Energy Deb K has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NextEra Energy Deb K 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.
High brand equity
– NextEra Energy Deb K has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NextEra Energy Deb K to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of NextEra Energy Deb K
– The covid-19 pandemic has put organizational resilience at the centre of everthing NextEra Energy Deb K does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– NextEra Energy Deb K 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 NextEra Energy Deb K have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that NextEra Energy Deb K 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.
Analytics focus
– NextEra Energy Deb K 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.
Training and development
– NextEra Energy Deb K has one of the best training and development program in 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.
Ability to recruit top talent
– NextEra Energy Deb K is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in industry
– NextEra Energy Deb K has clearly differentiated products in the market place. This has enabled NextEra Energy Deb K to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped NextEra Energy Deb K to invest into research and development (R&D) and innovation.
Learning organization
- NextEra Energy Deb K 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 NextEra Energy Deb K is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NextEra Energy Deb K emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of NextEra Energy Deb K comprises – understanding the underlying the factors in the 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.
Diverse revenue streams
– NextEra Energy Deb K is present in almost all the verticals within the industry. This has provided NextEra Energy Deb K 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.
Weaknesses of NextEra Energy Deb K | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NextEra Energy Deb K are -
High dependence on NextEra Energy Deb K ‘s star products
– The top 2 products and services of NextEra Energy Deb K still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though NextEra Energy Deb K has relatively successful track record of launching new products.
High cash cycle compare to competitors
NextEra Energy Deb K 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.
Lack of clear differentiation of NextEra Energy Deb K products
– To increase the profitability and margins on the products, NextEra Energy Deb K needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– NextEra Energy Deb K 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.
Employees’ less understanding of NextEra Energy Deb K strategy
– From the outside it seems that the employees of NextEra Energy Deb K 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.
Skills based hiring in industry
– The stress on hiring functional specialists at NextEra Energy Deb K 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.
Slow to strategic competitive environment developments
– As NextEra Energy Deb K is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee of NextEra Energy Deb K is just above the 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.
High operating costs
– Compare to the competitors, NextEra Energy Deb K 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 NextEra Energy Deb K lucrative customers.
Slow decision making process
– As mentioned earlier in the report, NextEra Energy Deb K has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. NextEra Energy Deb K 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.
Products dominated business model
– Even though NextEra Energy Deb K has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. NextEra Energy Deb K should strive to include more intangible value offerings along with its core products and services.
NextEra Energy Deb K Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NextEra Energy Deb K are -
Loyalty marketing
– NextEra Energy Deb K 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.
Creating value in data economy
– The success of analytics program of NextEra Energy Deb K has opened avenues for new revenue streams for the organization in industry. This can help NextEra Energy Deb K to build a more holistic ecosystem for NextEra Energy Deb K products in the industry by providing – data insight services, data privacy related products, data based consulting services, 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, NextEra Energy Deb K can use these opportunities to build new business models that can help the communities that NextEra Energy Deb K operates in. Secondly it can use opportunities from government spending in sector.
Building a culture of innovation
– managers at NextEra Energy Deb K 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.
Leveraging digital technologies
– NextEra Energy Deb K 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. NextEra Energy Deb K can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NextEra Energy Deb K 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.
Buying journey improvements
– NextEra Energy Deb K can improve the customer journey of consumers in the 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, NextEra Energy Deb K 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 NextEra Energy Deb K 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 NextEra Energy Deb K to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for NextEra Energy Deb K 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NextEra Energy Deb K 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 NextEra Energy Deb K to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. NextEra Energy Deb K can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats NextEra Energy Deb K External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NextEra Energy Deb K are -
Regulatory challenges
– NextEra Energy Deb K 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.
Consumer confidence and its impact on NextEra Energy Deb K 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.
Increasing wage structure of NextEra Energy Deb K
– 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 NextEra Energy Deb K.
Shortening product life cycle
– it is one of the major threat that NextEra Energy Deb K is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 NextEra Energy Deb K in the sector and impact the bottomline of the organization.
Environmental challenges
– NextEra Energy Deb K 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. NextEra Energy Deb K can take advantage of this fund but it will also bring new competitors in the industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents NextEra Energy Deb K with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– NextEra Energy Deb K has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, NextEra Energy Deb K needs to keep up with the evolution of technology in the 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.
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. NextEra Energy Deb K 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NextEra Energy Deb K may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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 NextEra Energy Deb K.
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. NextEra Energy Deb K needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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. NextEra Energy Deb K can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of NextEra Energy Deb K Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NextEra Energy Deb K 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 NextEra Energy Deb K 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 NextEra Energy Deb K 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 NextEra Energy Deb K 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 NextEra Energy Deb K needs to make to build a sustainable competitive advantage.