SWOT Analysis / TOWS Matrix for NewJersey Resources (United States)
Based on various researches at Oak Spring University , NewJersey Resources is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing energy prices, cloud computing is disrupting traditional business models, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of NewJersey Resources
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NewJersey Resources can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NewJersey Resources, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NewJersey Resources 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 NewJersey Resources can be done for the following purposes –
1. Strategic planning of NewJersey Resources
2. Improving business portfolio management of NewJersey Resources
3. Assessing feasibility of the new initiative in United States
4. Making a Natural Gas Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NewJersey Resources
Strengths of NewJersey Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NewJersey Resources are -
High brand equity
– NewJersey Resources has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NewJersey Resources to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– NewJersey Resources is one of the leading players in the Natural Gas Utilities 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.
Highly skilled collaborators
– NewJersey Resources has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Natural Gas Utilities industry. Secondly the value chain collaborators of NewJersey Resources have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of NewJersey Resources in the Utilities sector have low bargaining power. NewJersey Resources has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NewJersey Resources to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– NewJersey Resources is present in almost all the verticals within the Natural Gas Utilities industry. This has provided NewJersey Resources 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.
Sustainable margins compare to other players in Natural Gas Utilities industry
– NewJersey Resources has clearly differentiated products in the market place. This has enabled NewJersey Resources to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped NewJersey Resources to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– NewJersey Resources has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NewJersey Resources 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.
Analytics focus
– NewJersey Resources 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 Natural Gas Utilities 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.
Innovation driven organization
– NewJersey Resources is one of the most innovative firm in Natural Gas Utilities sector.
Organizational Resilience of NewJersey Resources
– The covid-19 pandemic has put organizational resilience at the centre of everthing NewJersey Resources does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- NewJersey Resources 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 NewJersey Resources is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NewJersey Resources emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Natural Gas Utilities industry
– NewJersey Resources is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of NewJersey Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NewJersey Resources are -
High operating costs
– Compare to the competitors, NewJersey Resources has high operating costs in the Natural Gas Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract NewJersey Resources lucrative customers.
Skills based hiring in Natural Gas Utilities industry
– The stress on hiring functional specialists at NewJersey Resources 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.
Ability to respond to the competition
– As the decision making is very deliberative at NewJersey Resources, in the dynamic environment of Natural Gas Utilities industry it has struggled to respond to the nimble upstart competition. NewJersey Resources has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As NewJersey Resources is one of the leading players in the Natural Gas Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Natural Gas Utilities industry in last five years.
High bargaining power of channel partners in Natural Gas Utilities industry
– because of the regulatory requirements in United States, NewJersey Resources 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 Natural Gas Utilities industry.
Low market penetration in new markets
– Outside its home market of United States, NewJersey Resources needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of NewJersey Resources products
– To increase the profitability and margins on the products, NewJersey Resources needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of NewJersey Resources supply chain. Even after few cautionary changes, NewJersey Resources is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left NewJersey Resources vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of NewJersey Resources is dominated by functional specialists. It is not different from other players in the Natural Gas Utilities industry, but NewJersey Resources needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NewJersey Resources to focus more on services in the Natural Gas Utilities industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, NewJersey Resources is slow explore the new channels of communication. These new channels of communication can help NewJersey Resources to provide better information regarding Natural Gas Utilities products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of NewJersey Resources strategy
– From the outside it seems that the employees of NewJersey Resources 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.
NewJersey Resources Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NewJersey Resources are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for NewJersey Resources in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Natural Gas Utilities industry, and it will provide faster access to the consumers.
Manufacturing automation
– NewJersey Resources can use the latest technology developments to improve its manufacturing and designing process in Natural Gas 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects NewJersey Resources can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– NewJersey Resources can improve the customer journey of consumers in the Natural Gas Utilities industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help NewJersey Resources to increase its market reach. NewJersey Resources 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NewJersey Resources 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 NewJersey Resources to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, NewJersey Resources is facing challenges because of the dominance of functional experts in the organization. NewJersey Resources can utilize new technology in the field of Natural Gas Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of NewJersey Resources has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help NewJersey Resources to build a more holistic ecosystem for NewJersey Resources products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– NewJersey Resources has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Natural Gas Utilities sector. This continuous investment in analytics has enabled NewJersey Resources to build a competitive advantage using analytics. The analytics driven competitive advantage can help NewJersey Resources 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 NewJersey Resources 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, NewJersey Resources 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NewJersey Resources can use these opportunities to build new business models that can help the communities that NewJersey Resources operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Developing new processes and practices
– NewJersey Resources can develop new processes and procedures in Natural Gas 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.
Threats NewJersey Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NewJersey Resources are -
Regulatory challenges
– NewJersey Resources 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 Natural Gas Utilities industry regulations.
Stagnating economy with rate increase
– NewJersey Resources 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 Natural Gas Utilities industry.
Increasing wage structure of NewJersey Resources
– 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 NewJersey Resources.
High dependence on third party suppliers
– NewJersey Resources 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.
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. NewJersey Resources 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.
Technology acceleration in Forth Industrial Revolution
– NewJersey Resources has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, NewJersey Resources needs to keep up with the evolution of technology in the Natural Gas Utilities sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for NewJersey Resources in Natural Gas Utilities industry. The Natural Gas 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.
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.
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.
Environmental challenges
– NewJersey Resources 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. NewJersey Resources can take advantage of this fund but it will also bring new competitors in the Natural Gas Utilities industry.
Consumer confidence and its impact on NewJersey Resources 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 Natural Gas Utilities industry and other sectors.
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 NewJersey Resources in the Natural Gas Utilities sector and impact the bottomline of the organization.
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 NewJersey Resources business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of NewJersey Resources Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NewJersey Resources 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 NewJersey Resources 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 NewJersey Resources 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 NewJersey Resources 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 NewJersey Resources needs to make to build a sustainable competitive advantage.
