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 government debt because of Covid-19 spendings, increasing energy prices, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, there is increasing trade war between United States & China, there is backlash against globalization, cloud computing is disrupting traditional business models, geopolitical disruptions, technology disruption, 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 -

Innovation driven organization

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

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.

Analytics focus

– Verbund AG Kat. A 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 Electric Utilities industry. The technology infrastructure of Germany 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.

Successful track record of launching new products

– Verbund AG Kat. A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Verbund AG Kat. A has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

High 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.

Ability to lead change in Electric Utilities

– Verbund AG Kat. A is one of the leading players in the Electric Utilities industry in Germany. Over the years it has not only transformed the business landscape in the Electric Utilities industry in Germany but also across the existing markets. The ability to lead change has enabled Verbund AG Kat. A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– Verbund AG Kat. A is one of the leading players in the Electric Utilities industry in Germany. It is in a position to attract the best talent available in Germany. The firm has a robust talent identification program that helps in identifying the brightest.

Training and development

– Verbund AG Kat. A has one of the best training and development program in Utilities 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.

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.

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.

Low bargaining power of suppliers

– Suppliers of Verbund AG Kat. A in the Utilities sector have low bargaining power. Verbund AG Kat. A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Verbund AG Kat. A to manage not only supply disruptions but also source products at highly competitive prices.

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.

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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 -

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.

Aligning sales with marketing

– From the outside it seems that Verbund AG Kat. A 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 Verbund AG Kat. A can leverage the sales team experience to cultivate customer relationships as Verbund AG Kat. A is planning to shift buying processes online.

Capital Spending Reduction

– Even during the low interest decade, Verbund AG Kat. A has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Electric Utilities industry using digital technology.

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.

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.

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.

Lack of clear differentiation of Verbund AG Kat. A products

– To increase the profitability and margins on the products, Verbund AG Kat. A needs to provide more differentiated products than what it is currently offering in the marketplace.

No frontier risks strategy

– From the 10K / annual statement of Verbund AG Kat. A, it seems that company is thinking out the frontier risks that can impact Electric Utilities 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.

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.

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.

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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 -

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.

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.

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Verbund AG Kat. A 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 Verbund AG Kat. A to hire the very best people irrespective of their geographical location.

Manufacturing automation

– Verbund AG Kat. A can use the latest technology developments to improve its manufacturing and designing process in Electric 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Verbund AG Kat. A 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 Verbund AG Kat. A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

Creating value in data economy

– The success of analytics program of Verbund AG Kat. A has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Verbund AG Kat. A to build a more holistic ecosystem for Verbund AG Kat. A products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, 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.

Building a culture of innovation

– managers at Verbund AG Kat. A 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.

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.

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.

Learning at scale

– Online learning technologies has now opened space for Verbund AG Kat. A 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.

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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.

Regulatory challenges

– Verbund AG Kat. A 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.

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.

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.

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.

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.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Verbund AG Kat. A 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 Verbund AG Kat. A prominent markets.

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.

Shortening product life cycle

– it is one of the major threat that Verbund AG Kat. A is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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.

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.

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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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