Pacific Gas and Electric Co Pa Pref (PCG_pa) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Pacific Gas and Electric Co Pa Pref (United States)

Based on various researches at Oak Spring University , Pacific Gas and Electric Co Pa Pref is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing commodity prices, etc

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Introduction to SWOT Analysis of Pacific Gas and Electric Co Pa Pref

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pacific Gas and Electric Co Pa Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pacific Gas and Electric Co Pa Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pacific Gas and Electric Co Pa Pref 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Pacific Gas and Electric Co Pa Pref can be done for the following purposes –
1. Strategic planning of Pacific Gas and Electric Co Pa Pref
2. Improving business portfolio management of Pacific Gas and Electric Co Pa Pref
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 Pacific Gas and Electric Co Pa Pref

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Strengths of Pacific Gas and Electric Co Pa Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Pacific Gas and Electric Co Pa Pref are -

Ability to recruit top talent

– Pacific Gas and Electric Co Pa Pref is one of the leading players in the Electric 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.

Effective Research and Development (R&D)

– Pacific Gas and Electric Co Pa Pref has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Pacific Gas and Electric Co Pa Pref 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.

Organizational Resilience of Pacific Gas and Electric Co Pa Pref

– The covid-19 pandemic has put organizational resilience at the centre of everthing Pacific Gas and Electric Co Pa Pref does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Diverse revenue streams

– Pacific Gas and Electric Co Pa Pref is present in almost all the verticals within the Electric Utilities industry. This has provided Pacific Gas and Electric Co Pa Pref 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.

Learning organization

- Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pacific Gas and Electric Co Pa Pref emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Electric Utilities industry

– Pacific Gas and Electric Co Pa Pref has clearly differentiated products in the market place. This has enabled Pacific Gas and Electric Co Pa Pref to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped Pacific Gas and Electric Co Pa Pref to invest into research and development (R&D) and innovation.

Innovation driven organization

– Pacific Gas and Electric Co Pa Pref is one of the most innovative firm in Electric Utilities sector.

High switching costs

– The high switching costs that Pacific Gas and Electric Co Pa Pref 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.

Cross disciplinary teams

– Horizontal connected teams at the Pacific Gas and Electric Co Pa Pref 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.

Highly skilled collaborators

– Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management in the Electric Utilities industry

– Pacific Gas and Electric Co Pa Pref is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Successful track record of launching new products

– Pacific Gas and Electric Co Pa Pref has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pacific Gas and Electric Co Pa Pref 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.

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Weaknesses of Pacific Gas and Electric Co Pa Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Pacific Gas and Electric Co Pa Pref are -

Interest costs

– Compare to the competition, Pacific Gas and Electric Co Pa Pref 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.

Employees’ less understanding of Pacific Gas and Electric Co Pa Pref strategy

– From the outside it seems that the employees of Pacific Gas and Electric Co Pa Pref 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 Electric Utilities industry

– The stress on hiring functional specialists at Pacific Gas and Electric Co Pa Pref 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

Pacific Gas and Electric Co Pa Pref 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 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 Pacific Gas and Electric Co Pa Pref supply chain. Even after few cautionary changes, Pacific Gas and Electric Co Pa Pref is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pacific Gas and Electric Co Pa Pref vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Pacific Gas and Electric Co Pa Pref 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.

Workers concerns about automation

– As automation is fast increasing in the Electric Utilities industry, Pacific Gas and Electric Co Pa Pref 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.

Slow decision making process

– As mentioned earlier in the report, Pacific Gas and Electric Co Pa Pref 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. Pacific Gas and Electric Co Pa Pref 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pacific Gas and Electric Co Pa Pref is slow explore the new channels of communication. These new channels of communication can help Pacific Gas and Electric Co Pa Pref to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

– From the outside it seems that Pacific Gas and Electric Co Pa Pref needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at Pacific Gas and Electric Co Pa Pref can leverage the sales team experience to cultivate customer relationships as Pacific Gas and Electric Co Pa Pref is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative at Pacific Gas and Electric Co Pa Pref, in the dynamic environment of Electric Utilities industry it has struggled to respond to the nimble upstart competition. Pacific Gas and Electric Co Pa Pref has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Pacific Gas and Electric Co Pa Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Pacific Gas and Electric Co Pa Pref are -

Developing new processes and practices

– Pacific Gas and Electric Co Pa Pref 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.

Loyalty marketing

– Pacific Gas and Electric Co Pa Pref 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.

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 Pacific Gas and Electric Co Pa Pref 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.

Building a culture of innovation

– managers at Pacific Gas and Electric Co Pa Pref 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.

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. Pacific Gas and Electric Co Pa Pref 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. Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref 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.

Creating value in data economy

– The success of analytics program of Pacific Gas and Electric Co Pa Pref has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Pacific Gas and Electric Co Pa Pref to build a more holistic ecosystem for Pacific Gas and Electric Co Pa Pref products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref 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, Pacific Gas and Electric Co Pa Pref is facing challenges because of the dominance of functional experts in the organization. Pacific Gas and Electric Co Pa Pref can utilize new technology in the field of Electric Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Pacific Gas and Electric Co Pa Pref in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pacific Gas and Electric Co Pa Pref can use these opportunities to build new business models that can help the communities that Pacific Gas and Electric Co Pa Pref operates in. Secondly it can use opportunities from government spending in Electric Utilities sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Electric Utilities industry, but it has also influenced the consumer preferences. Pacific Gas and Electric Co Pa Pref can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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Threats Pacific Gas and Electric Co Pa Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Pacific Gas and Electric Co Pa Pref are -

Technology acceleration in Forth Industrial Revolution

– Pacific Gas and Electric Co Pa Pref has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Pacific Gas and Electric Co Pa Pref needs to keep up with the evolution of technology in the Electric 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.

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.

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. Pacific Gas and Electric Co Pa Pref can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Shortening product life cycle

– it is one of the major threat that Pacific Gas and Electric Co Pa Pref is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Pacific Gas and Electric Co Pa Pref.

High dependence on third party suppliers

– Pacific Gas and Electric Co Pa Pref 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.

Regulatory challenges

– Pacific Gas and Electric Co Pa Pref 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.

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 Pacific Gas and Electric Co Pa Pref in the Electric Utilities sector and impact the bottomline of the organization.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Pacific Gas and Electric Co Pa Pref 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. Pacific Gas and Electric Co Pa Pref 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Electric Utilities industry are lowering. It can presents Pacific Gas and Electric Co Pa Pref with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electric Utilities sector.

Consumer confidence and its impact on Pacific Gas and Electric Co Pa Pref 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.

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.

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Weighted SWOT Analysis of Pacific Gas and Electric Co Pa Pref Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref 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 Pacific Gas and Electric Co Pa Pref needs to make to build a sustainable competitive advantage.

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