SWOT Analysis / TOWS Matrix for Spark Infrastructure (Australia)
Based on various researches at Oak Spring University , Spark Infrastructure is operating in a macro-environment that has been destablized by – wage bills are increasing, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Spark Infrastructure
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Spark Infrastructure can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Spark Infrastructure, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Spark Infrastructure 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 Spark Infrastructure can be done for the following purposes –
1. Strategic planning of Spark Infrastructure
2. Improving business portfolio management of Spark Infrastructure
3. Assessing feasibility of the new initiative in Australia
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Spark Infrastructure
Strengths of Spark Infrastructure | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Spark Infrastructure are -
Organizational Resilience of Spark Infrastructure
– The covid-19 pandemic has put organizational resilience at the centre of everthing Spark Infrastructure does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Spark Infrastructure is present in almost all the verticals within the Electric Utilities industry. This has provided Spark Infrastructure 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.
High brand equity
– Spark Infrastructure has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Spark Infrastructure to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Spark Infrastructure has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Spark Infrastructure 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.
Operational resilience
– The operational resilience strategy of Spark Infrastructure comprises – understanding the underlying the factors in the Electric Utilities industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Learning organization
- Spark Infrastructure 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 Spark Infrastructure is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Spark Infrastructure emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Spark Infrastructure is one of the leading players in the Electric Utilities industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Spark Infrastructure 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.
Digital Transformation in Electric Utilities industry
- digital transformation varies from industry to industry. For Spark Infrastructure digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Spark Infrastructure 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.
Strong track record of project management in the Electric Utilities industry
– Spark Infrastructure is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Spark Infrastructure is one of the most innovative firm in Electric Utilities sector.
Low bargaining power of suppliers
– Suppliers of Spark Infrastructure in the Utilities sector have low bargaining power. Spark Infrastructure has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Spark Infrastructure to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Spark Infrastructure | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Spark Infrastructure are -
No frontier risks strategy
– From the 10K / annual statement of Spark Infrastructure, 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.
Interest costs
– Compare to the competition, Spark Infrastructure 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.
Increasing silos among functional specialists
– The organizational structure of Spark Infrastructure is dominated by functional specialists. It is not different from other players in the Electric Utilities industry, but Spark Infrastructure needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Spark Infrastructure to focus more on services in the Electric Utilities industry rather than just following the product oriented approach.
Employees’ less understanding of Spark Infrastructure strategy
– From the outside it seems that the employees of Spark Infrastructure 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.
High dependence on Spark Infrastructure ‘s star products
– The top 2 products and services of Spark Infrastructure still accounts for major business revenue. This dependence on star products in Electric Utilities industry has resulted into insufficient focus on developing new products, even though Spark Infrastructure has relatively successful track record of launching new products.
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 Spark Infrastructure supply chain. Even after few cautionary changes, Spark Infrastructure is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Spark Infrastructure vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Electric Utilities industry, Spark Infrastructure 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Spark Infrastructure is slow explore the new channels of communication. These new channels of communication can help Spark Infrastructure to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Spark Infrastructure 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. Spark Infrastructure 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.
Low market penetration in new markets
– Outside its home market of Australia, Spark Infrastructure needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Spark Infrastructure 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.
Spark Infrastructure Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Spark Infrastructure are -
Leveraging digital technologies
– Spark Infrastructure 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 Spark Infrastructure can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Spark Infrastructure 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Spark Infrastructure 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Spark Infrastructure 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 Spark Infrastructure to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Spark Infrastructure 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.
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 Spark Infrastructure in the Electric Utilities industry. Now Spark Infrastructure can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Spark Infrastructure 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.
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. Spark Infrastructure 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. Spark Infrastructure 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Spark Infrastructure 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 Spark Infrastructure to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Spark Infrastructure has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electric Utilities sector. This continuous investment in analytics has enabled Spark Infrastructure to build a competitive advantage using analytics. The analytics driven competitive advantage can help Spark Infrastructure to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Spark Infrastructure can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Spark Infrastructure has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Spark Infrastructure to build a more holistic ecosystem for Spark Infrastructure products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Spark Infrastructure External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Spark Infrastructure are -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Spark Infrastructure 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.
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. Spark Infrastructure will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Spark Infrastructure in the Electric Utilities sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Spark Infrastructure is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Spark Infrastructure 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. Spark Infrastructure can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.
Stagnating economy with rate increase
– Spark Infrastructure 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 Electric Utilities industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electric Utilities industry are lowering. It can presents Spark Infrastructure with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electric Utilities sector.
Regulatory challenges
– Spark Infrastructure 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 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. Spark Infrastructure needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.
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 Spark Infrastructure.
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 Spark Infrastructure business can come under increasing regulations regarding data privacy, data security, etc.
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. Spark Infrastructure can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Spark Infrastructure Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Spark Infrastructure 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 Spark Infrastructure 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 Spark Infrastructure 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 Spark Infrastructure 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 Spark Infrastructure needs to make to build a sustainable competitive advantage.