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 energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, technology disruption,
increasing transportation and logistics costs, there is backlash against globalization, 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 -
Ability to lead change in
– NextEra Energy Deb K 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 NextEra Energy Deb K in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Effective Research and Development (R&D)
– NextEra Energy Deb K has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NextEra Energy Deb K staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of NextEra Energy Deb K in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For NextEra Energy Deb K digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NextEra Energy Deb K 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.
Low bargaining power of suppliers
– Suppliers of NextEra Energy Deb K in the sector have low bargaining power. NextEra Energy Deb K has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NextEra Energy Deb K to manage not only supply disruptions but also source products at highly competitive prices.
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 -
Ability to respond to the competition
– As the decision making is very deliberative at NextEra Energy Deb K, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. NextEra Energy Deb K has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, NextEra Energy Deb K 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.
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.
No frontier risks strategy
– From the 10K / annual statement of NextEra Energy Deb K, it seems that company is thinking out the frontier risks that can impact 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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of NextEra Energy Deb K is dominated by functional specialists. It is not different from other players in the industry, but NextEra Energy Deb K needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NextEra Energy Deb K 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 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.
Low market penetration in new markets
– Outside its home market of United States, NextEra Energy Deb K needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, NextEra Energy Deb K 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.
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 -
Developing new processes and practices
– NextEra Energy Deb K 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.
Manufacturing automation
– NextEra Energy Deb K can use the latest technology developments to improve its manufacturing and designing process in 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.
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. NextEra Energy Deb K 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. NextEra Energy Deb K 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.
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.
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.
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.
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.
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.
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 NextEra Energy Deb K in the industry. Now NextEra Energy Deb K can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, NextEra Energy Deb K is facing challenges because of the dominance of functional experts in the organization. NextEra Energy Deb K 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.
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.
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.
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 -
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.
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.
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.
High dependence on third party suppliers
– NextEra Energy Deb K 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, NextEra Energy Deb K 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 NextEra Energy Deb K prominent markets.
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
– 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.
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.
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.
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.
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.
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.
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.
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.
