Verbund AG Kat. A (VERB) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Verbund AG Kat. A (Germany)

Based on various researches at Oak Spring University , Verbund AG Kat. A is operating in a macro-environment that has been destablized by – increasing commodity prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Verbund AG Kat. A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Verbund AG Kat. A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Verbund AG Kat. A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Verbund AG Kat. A 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 Verbund AG Kat. A can be done for the following purposes –
1. Strategic planning of Verbund AG Kat. A
2. Improving business portfolio management of Verbund AG Kat. A
3. Assessing feasibility of the new initiative in Germany
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Verbund AG Kat. A

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Strengths of Verbund AG Kat. A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Verbund AG Kat. A are -

Organizational Resilience of Verbund AG Kat. A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Verbund AG Kat. A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Electric Utilities industry

- digital transformation varies from industry to industry. For Verbund AG Kat. A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Verbund AG Kat. A 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.

Diverse revenue streams

– Verbund AG Kat. A is present in almost all the verticals within the Electric Utilities industry. This has provided Verbund AG Kat. A 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.

Cross disciplinary teams

– Horizontal connected teams at the Verbund AG Kat. A 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.

High switching costs

– The high switching costs that Verbund AG Kat. A 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.

High brand equity

– Verbund AG Kat. A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Verbund AG Kat. A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Electric Utilities industry

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

Effective Research and Development (R&D)

– Verbund AG Kat. A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Verbund AG Kat. A 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.

Strong track record of project management in the Electric Utilities industry

– Verbund AG Kat. A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Superior customer experience

– The customer experience strategy of Verbund AG Kat. A in Electric Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Verbund AG Kat. A is one of the most innovative firm in Electric Utilities sector.

Learning organization

- Verbund AG Kat. A 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 Verbund AG Kat. A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Verbund AG Kat. A emphasize – knowledge, initiative, and innovation.

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Weaknesses of Verbund AG Kat. A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Verbund AG Kat. A are -

Low market penetration in new markets

– Outside its home market of Germany, Verbund AG Kat. A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Increasing silos among functional specialists

– The organizational structure of Verbund AG Kat. A is dominated by functional specialists. It is not different from other players in the Electric Utilities industry, but Verbund AG Kat. A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Verbund AG Kat. A to focus more on services in the Electric Utilities industry rather than just following the product oriented approach.

Products dominated business model

– Even though Verbund AG Kat. A has some of the most successful models in the Electric Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Verbund AG Kat. A should strive to include more intangible value offerings along with its core products and services.

Interest costs

– Compare to the competition, Verbund AG Kat. A has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Compensation and incentives

– The revenue per employee of Verbund AG Kat. A is just above the Electric Utilities industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Skills based hiring in Electric Utilities industry

– The stress on hiring functional specialists at Verbund AG Kat. A 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 operating costs

– Compare to the competitors, Verbund AG Kat. A has high operating costs in the Electric Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Verbund AG Kat. A lucrative customers.

Workers concerns about automation

– As automation is fast increasing in the Electric Utilities industry, Verbund AG Kat. A needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

High bargaining power of channel partners in Electric Utilities industry

– because of the regulatory requirements in Germany, Verbund AG Kat. A is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Electric Utilities industry.

Slow to strategic competitive environment developments

– As Verbund AG Kat. A is one of the leading players in the Electric Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electric Utilities industry in last five years.

Slow decision making process

– As mentioned earlier in the report, Verbund AG Kat. A 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. Verbund AG Kat. A 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.

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Verbund AG Kat. A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Verbund AG Kat. A are -

Buying journey improvements

– Verbund AG Kat. A can improve the customer journey of consumers in the Electric 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Verbund AG Kat. A 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.

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 Verbund AG Kat. A 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.

Developing new processes and practices

– Verbund AG Kat. A 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.

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. Verbund AG Kat. A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Loyalty marketing

– Verbund AG Kat. A 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Verbund AG Kat. A is facing challenges because of the dominance of functional experts in the organization. Verbund AG Kat. A 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.

Increase in government spending

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

Leveraging digital technologies

– Verbund AG Kat. A 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Verbund AG Kat. A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Verbund AG Kat. A 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. Verbund AG Kat. A 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.

Use of Bitcoin and other crypto currencies for transactions in Electric Utilities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Verbund AG Kat. A in the Electric Utilities industry. Now Verbund AG Kat. A can target international markets with far fewer capital restrictions requirements than the existing system.

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. Verbund AG Kat. A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Verbund AG Kat. A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Verbund AG Kat. A are -

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 Verbund AG Kat. A in the Electric Utilities sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Verbund AG Kat. A has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Verbund AG Kat. A 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.

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 Verbund AG Kat. A.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Verbund AG Kat. A 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.

Increasing wage structure of Verbund AG Kat. A

– 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 Verbund AG Kat. A.

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. Verbund AG Kat. A needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.

Environmental challenges

– Verbund AG Kat. A 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. Verbund AG Kat. A can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Verbund AG Kat. A in Electric Utilities industry. The Electric Utilities industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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 Verbund AG Kat. A business can come under increasing regulations regarding data privacy, data security, 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. Verbund AG Kat. A 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.

High dependence on third party suppliers

– Verbund AG Kat. A high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Consumer confidence and its impact on Verbund AG Kat. A 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.

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.

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Weighted SWOT Analysis of Verbund AG Kat. A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Verbund AG Kat. A 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 Verbund AG Kat. A 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 Verbund AG Kat. A 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 Verbund AG Kat. A 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 Verbund AG Kat. A needs to make to build a sustainable competitive advantage.

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