PESTLE Analysis of Sri Lanka’s Energy Industry: Economic, Political, and Legal Factors

A PESTLE analysis is a framework used to assess the external environment in which a company operates or plans to launch a new product or service. In the case of the energy industry in Sri Lanka, this analysis considers economic, political, and legal factors. Currently, Sri Lanka is facing an economic and political crisis, with a shortage of foreign currency reserves, inflation, and a devaluation of the Sri Lankan rupee. This has led to an energy crisis, with long power cuts due to the inability to import fuel to generate electricity. The country has been dependent on India for fuel to help alleviate its crisis. The Russian-Ukraine war can also worsen Sri Lanka’s economy as Russia is one of its largest importers of tea, while arrivals from the warring nations form a major chunk of its tourists.      

Source: CBSL
Situational Analysis
External Environment Analysis
PESTLE Analysis
This is a framework that is used to assess the environment that a company is operating or hoping to
launch a new product/service. In the case of __________, Energy industry in Sri Lanka has been
evaluated using this concept.
Economic Factors
Currently, Sri Lanka is going through an economic and political crisis in which the country is almost
empty on their foreign currency reserves which has drastically reduced the ability to import and largely
caused inflation. Consequently, the Sri Lankan rupee devalued by 44% against US dollar so far this year.
As a result, the country has been experiencing long power cuts as it was unable to import fuel to
generate electricity and is hoped to continue at least for the next three years to meet with the
increasing demands.
Sri Lanka has been greatly dependent on India for fuel to help allay its crisis. In January, 2022, India
signed off on a $400-million credit swap facility and deferred an Asian Clearing House settlement of
$515.2 million.
The Russian-Ukraine war can also worsen Sri Lanka’s economy as Russia is one of its largest importers of
tea, while arrivals from the warring nations form a major chunk of its tourists. With the ongoing crisis
and depreciated Ruble, declining imports and tourism from the region have hit Sri Lanka hard.
Political and Legal Factors

Due to the political turmoil in the country, many sectors were affected, especially the energy industry.
The CEB Engineers boycotted as a way of opposing government plans of amending the power sector
legislation (proposed by Power and Energy Minister Kanchana Wijesekara) to remove restrictions on
competitive bidding for renewable power projects. This amendment was believed to have connections
with the wind power deal with Adani Group.
Two ministries are responsible for policy formulation and supervision of energy sector institutions and
utilities: Ministry of Power, Energy and Business Development prepares energy policy, supervises CEB
and other entities and The Public Utilities Commission of Sri Lanka (PUCSL) ensures safety regulation of
electricity industry.
Moreover, according to the budget, a seven-year exemption period was granted for any “renewable
energy project” established with a capacity to generate not less than one hundred Mega Watts solar or
wind power and supplies such power to national grid.
**Taxes**
The Electricity Act 2009 introduced limited unbundling, where all businesses remain under one
corporate ownership, while generation, transmission, and distribution functions were separately
licensed.
Technological Factors
Although Sri Lanka is behind in technology compared to developed countries, it is striving to bring in
advanced technology for power generation. Grid-connected solar power technology is becoming
popular among residential, commercial and industrial building owners.
Moreover, there are three emerging technologies in ESSs (large-scale Energy Storage Systems) that
could become viable for solar and wind in the near future.

 Smart batteries
 Thermal energy storage
 Hydrogen fuel cells
In addition, advanced technology is further used in improving the reliability in transmission and
distribution of electricity. Sophisticated software and hardware are readily accessible in the country to
maintain commercial quality of services by distribution utilities.
Potential offered by vehicle energy storage systems (ESS) will be studied considering ESS as a local
standby energy storage device, deploying those as an automated demand response (ADR) option and a
load profile management too.
Development of novel information and communications technology (ICT) applications such as for power
system automation, remote control, distributed real time event and data acquisition systems, and smart
metering will be encouraged.
Environmental and natural Factors
Nearly all parts of the electricity system can affect the environment, but varies in intensity. Energy
sector utilities are forced to strictly comply with environmental standards stipulated by the government.
There are concerns particularly for particulate matter, sulfur dioxide, carbon dioxide and source-specific
atmospheric emissions which is regulated by Central Environmental Authority.
Due to climate change and other environmental degradation, there is a high concern for alternative and
sustainable options such as non-conventional renewables, inter-fuel substitution, sector reforms and
alternatives to coal.
Moreover, Sri Lanka aspires to become a carbon neutral country by 2050 by making the most out of the
energy available and developing cleaner energy resources.
Social and demographic Factors

Electricity users can be grouped into several sectors. Therein, the residential
demand constitutes a large percentage of the overall electrical energy demand. For example,
domestic buildings consume around 40% of global generated energy (Saberbari & Saboori,
2014). Electricity users can be grouped into several sectors. Therein, the residential
demand constitutes a large percentage of the overall electrical energy demand. For example,
domestic buildings consume around 40% of global generated energy (Saberbari & Saboori,
2014). Family size, income levels, lifestyle choices, age structure are some determinants of electricity
usage.
Usually household energy consumption increases with the family income, so it is
reasonable to use family income as a factor to predict the energy usage of family. Here the
lowest income group uses a few electrical appliances and when the income goes high people
tend to use more appliances. Hence more electricity to have more comfort in life.
This graph shows that power consumption gradually increases up to family size 6,
and families that have more than six members show sudden increase.
***Skilled migration***

Internal Environmental Analysis
[2022] Tata Power Co. Mckinsey 7S Analysis / Framework (embapro.com)
Mckinsey 7s Framework Of Appropriation of Technology Tata Power Delhi Distribution Limited
(essay48.com)
https://www.tatapower.com/pdf/corporate-profile.pdf
103Annual-Report-2021-22.pdf (tatapower.com)
Solved VRIO / VRIN : Tata Power: Corporate Social Responsibility and Sustainability Analysis
(embapro.com)
Use company profile to fill in the resources
Internal Environmental Analysis
McKinsey 7s Framework
Strategy
Tata Power, India's largest integrated power company, is dedicated to its mission of "empowering a
billion lives via sustainable, affordable, and creative energy solutions."
Some of the strategic objectives for the upcoming years would be,
 Profitable expansion of the renewable energy, transmission and distribution, services, and
energy solutions industries.
 Placing a priority on sustainability with a goal of achieving carbon and water neutrality.
 Making use of digital platforms to power customer-focused enterprises.
 Creating upcoming energy-related services and solutions.
TATA Power Company is intending to achieve these objectives through differentiation by revolutionizing
into a customer-centric company with a bouquet of new services. Through data analytics, it seeks to
digitize many business sectors, including the production, transmission, and distribution of electric
power. The company further plans to introduce value-added services, improve customer satisfaction as
means of rendering customer-centric services. Also, TATA Power will be involving in developing
organizational capacities to drive the character change.
Tata Power being one of the India’s largest integrated power companies is committed to its vision to
“Empower a billion lives through sustainable, affordable and innovative energy solutions”. Some of the
strategic objectives for the upcoming years would be
 Profitable scaling up of renewables, transmission & Distribution, services & Energy solutions
business.
 Focusing on sustainability, with an intent to attain carbon and water neutrality.
 Leveraging digital platforms to drive customer-centric businesses.
 Developing future energy services and solutions.

TATA Power Company is intending to achieve these objectives through differentiation by transforming
into a customer-centric company with a bouquet of new services. It wants to digitize the business
verticals - including power generation, transmission and distribution - and enhance customer experience
through data analytics. For creating a customer-centric organisation, the company intends to roll out
value-added services for customers' delight, and improve and measure customer satisfaction. It will be
building organisational capabilities to drive the character switch.
Structure
TATA Power employs a flatter organizational hierarchy which is preferably a choice by progressive and
innovative organizations. Employees feel more comfortable and confident, and have more access to
information, with fewer administrative layers in between and more access to top management and
leadership. In other words, it has a short chain of command. Furthermore, this structure enables for
faster-decision making process for TATA Power that promotes employee engagement.
Also, to ensure proper communication between staff and different levels of management, the company
has put in place a sophisticated and detail communication system which greatly contributes to the
efficiency of the organizational structure. Communication that is systematic, specified, and organized
provides for a smooth flow of information and guarantees that no organizational objectives or goals are
jeopardized due to a lack of communication or misconceptions.
Appropriation of Technology Tata Power Delhi Distribution Limited has a flatter organizational hierarchy
that is supported by learning and progressive organizations. With lesser managerial levels in between
and more access to the senior management and leadership, the employees feel more secure and
confident and also have higher access to information. In other words, it has a short chain of command.
Moreover, the flatter hierarchy also allows quicker decision-making processes for Appropriation of
Technology Tata Power Delhi Distribution Limited and increases organizational commitment in the
employees.
Appropriation of Technology Tata Power Delhi Distribution Limited has a developed and intricate system
for ensuring communication between employees, and different managerial levels. The communication
systems at Appropriation of Technology Tata Power Delhi Distribution Limited enhance the overall
organizational structure. The systematic, defined, and organized communication allows an easy flow of
information and ensures that no organizational tasks and goals are compromised because of a lack of
communication, or misunderstandings.
**chain of command**
Systems
Appropriation of Technology Tata Power Delhi Distribution Limited has defined and well-demarcated
systems in place to ensure that the business operations are managed effectively and that there are no
conflicts or disputes. The systems at Appropriation of Technology Tata Power Delhi Distribution Limited
are largely departmental in nature, and include, for example:
- Human resource management
- Finance

- Marketing
- Operations
- Sales
- Supply chain management
- Public Relation Management
- Strategic leadership
TATA Power has specified and well-defined systems in place to guarantee that business activities are
managed seamlessly and that conflicts or problems do not arise. The company’s systems are primarily
departmental but interconnected in order to eradicate information silos.
Some of the systems that the company uses are as follows:
Customer Relationship Management: A system used by marketing, sales and business development
functions that helps to manage connections with existing customers and prospects.
Enterprise Resource Planning: The company relies on this system to handle daily operations such as
procurement, supply chain, project management, and risk management.
Human Resources Information System: TATA uses HRIS as a solution that maintains repository of
employee data and employee-related policies and procedures.
Electrical Power Management System: The organization has this system installed in its power
generation system and power stations to gather information on the power flow.
Plant Information Management System: This system provides TATA Power with information related to
plant operations and other manufacturing related information to improve efficiency and reliability.
Shared values
The core values of TATA Power Co. defines and communicates its core principles in order to develop a
creative and supportive organization that facilitates employees to perform efficiently while motivating
them. Some of their core values include:
Safety:
Care:
Agility:
Learning:
Ethics:

Style
Since the inception of the TATA Group, including TATA Power, the leadership style has been mostly
consistent. In order to improve its competitiveness in the present climate, the company has
implemented further leadership changes. The organization has a team-led culture and a communal
approach to leadership. Trust has grown to be a significant aspect and theme of the TATA Group since
Ratan Tata became its CEO, and its influence on TATA Power Co. has been significant. The organization
was completely restructured by adopting a more matrix-style to team development.
Praveer Sinha, CEO and MD of TATA Power Co., adopts a democratic style of management because he
encourages his employees to foster positive involvement and communication. The future leadership is
well-informed about future strategy and actively involved in making decisions. The leadership at lower
levels develops the majority of the group's long- and short-term strategies. This way, every employee is
given the chance to exchange ideas and participate in discussions harmoniously. However, in certain
occasions it has been noted that the CEO has exhibited some degree authoritarian style of leadership.
The TATA Group leadership style has been quite consistent since its existence way
back to 1868. The TATA Group has incorporated more leadership changes which are
essential in current environment to drive towards to be more competitive. In terms
of leadership style, TATA Group has adopted a team-led culture and collective
approach. With Ratan Tata as leader of the Group, the management style of the
entire TATA Group has changed considerably; trust became a huge facet and theme
of the group. Ratan Tata has put a complete organisational restructuring when he
took over in 1991 as leader of the TATA Group, by taking a more matrix-style
approach building teams.
Ratan Tata is a leader who engages more democratic style of leadership approach.
However at previous occasion has used other two kind of style as well. He is more
democratic because he always encourages his group leadership to be creating good
communication and participation. Future leadership are well informed about future

strategy and they are very well engaged in decision making process. Most of the
group long-term and short-term strategies are formulated by the lower rank of the
leadership. They are treated as stake holders. Until now TATA Group has got
leadership within them. Ratan Tata has occasionally shown some form of autocratic
style of leadership. Sometimes when needed especially when quick and informed
decisions have to be taken, but he is never too commanding in his nature, being a
man of few words and being more of a man of action, this is evident from the
manner he aggressively pushes for bold international deals, such as during the
global acquisitions of business powerhouses such as Corus, Jaguar and Land Rover,
and Tetley Tea. One of his senior leadership team member, Muthuraman( Executive
Director) refers him “Ratan was the chief architect of the Corus deal. I was worried
about the magnitude and the amount of money. But he instilled confidence.”
Staff
TATA Power employs an adequate number of staff throughout its global activities. Employees for various
job types and positions are employed both inside and externally based on the demand and skill levels
necessary. The total employee base for 2021-2022 is as follows:
The company constantly reviews the employee demand with the ever-evolving external environment
which also is on par with their business needs. Their talent acquisition process is fair, effective and
systematic which ensures that the workforce is capable of dealing with challenges of tomorrow while
also helping to deliver on organizational goals today. In addition, their diversity policy guarantees that
the employee base is diverse in terms ranging from gender and ethnicity to experience and skill level.

Talent acquisition and retention
With a continuously evolving external environment, we constantly evaluate our requirements for skilled
professionals, aligned with our business needs. Through fair, effective and systematic talent acquisition
practices, we ensure that we have the talent to tackle the challenges of tomorrow, while helping deliver
on organisational goals today. Adding to this is our diversity policy, which ensures that our workforce is
balanced on various measures of diversity – from gender and background to experience and skill set.
Training design is based on in-house AMP leadership competency framework that has been copyrighted.
We have a robust employee development framework that comprises our 3 Tier Leadership Development
programs, Senior Leaders Development Program (Tier 1), Achieving Your Leadership Potential (Tier 2)
and Emerging Leaders Program (Tier 3), that have been conceptualised, designed internally and are
executed and delivered in collaboration with best in class management institutions, IIM A, SPJIMR
Mumbai, XLRI Jamshedpur and TMTC Pune, and our Future Skill academies in areas of Digital, Project
Management, Sales and Customer Centricity that are aimed to make our employees future ready. We
adopt a blended learning pedagogy for employee development pivoted on class room training, virtual
live training, e-learning, coaching, action learning projects, on job training and mentoring among others.
Our eLearning platform ‘Gyankosh’ now has over 1 lakh learning resources, accessible anytime,
anywhere, across any device. Gyankosh was awarded ‘Skillsoft Program of the Year’ in 2020, ‘Skillsoft
Champion of the Year’ in 2021 at Skillsoft Global Perspectives, competing with some of the best
organisations globally.
TATA Power also ensures continuous communication between employees and management through
formal and informal means. To strengthen employee engagement, they consistently focus on their
concerns and aspirations and ensure that their needs are met in the best possible way. Employee
opinions and voices assist the company in refining its policies and programs, allowing for ongoing
development in the workforce experience. The organization also has particular employee engagement
strategies in place to guarantee that their productivity remains high while also allowing them to
maintain a healthy work-life balance. Achiever's Portal, Pulse Connect, VOICES, Engagement Action
Planning, Town halls, and Connect 2 Solve are all avenues for encouraging open discussion with
employees and empowering them.
Employee engagement
We foster a continuous dialogue between the employees and the management with formal and
informal initiatives. Through various engagements, we continuously listen to their concerns and
aspirations, and ensure that their requirements are addressed in the most optimal way. Their feedback
and voice help us refine our policies and programmes, and enable continuous improvement on the
people experience front. About 47.66% of our employees are represented by unions and collective

bargaining agreements. We maintain strong and enabling labour relations practices, to ensure that their
rights are respected and needs addressed.
We have a process of annual engagement survey process of capturing feedback and actioning to
enhance employee experience. We are now looking to capture more real time and frequent feedback
focusing on specific employee cohorts which have specific needs and challenges of each group, and
action upon feedback received. We have specific employee engagement initiatives that ensure that their
productivity remains optimal, while helping them maintain a fine work-life balance. Avenues such as
Achiever’s Portal, Pulse Connect, VOICES, Engagement Action Planning, Town halls and Connect 2 Solve
help in promoting open dialogues with employees and empowering them. It also offers employees a
platform to express themselves, recognise each other, share their views and provide feedback on policy
development as well as deployment. These initiatives have emerged and are continuously improved
based on feedback received from employees and organisation's changing imperatives. Efforts are made
to resolve employee grievances in a timely manner.
TATA Power Co. is an equal opportunity employer which operates on the core principle that diversity
alone can provide viewpoints that can foster innovation and create a company that is fit for the future.
Although they operate in a male-dominated sector, they are actively endeavoring to provide equal
opportunity regardless of gender.
Diversity and inclusion
Our diversity ratio for campus was over 30% last year. We have 22% gender diversity in sales and
customer facing roles, 34% in finance and accounting roles and 40% in digital and technology roles.
We are an equal opportunity employer working with the core belief that diversity alone can bring in
perspectives that can promote innovation and enable a future-fit organisation. Even as a heavy industry,
we take active interventions in ensuring that our workforce has notable non-male participation. We

have an articulated vision and clarity on D&I outcomes we want to achieve at the Tata Power Group
level. This dovetails into our performance scorecards, with specific goals for leaders, managers and HR,
and these metrics get tracked on a quarterly basis and discussed with leadership with clear actionables.
To create a culture of teamwork and to capitalise on the diverse thinking of the workforce, especially
our younger workforce, various cross functional teams, across the levels of the organisation, are formed
to work on critical projects for the organisation, e.g. Innorise.
Skill
One of the company’s main competitive advantages is its human resource. TATA Power Co. has a highly
skilled and capable workforce who are hired on the basis of their merits and qualifications. The company
takes pride in employing the best individuals and nurturing them further to promote growth and
development. They make sure that all job-related requirements are fulfilled and that the staff are
equipped with the necessary capabilities to carry out specific tasks in line with the company values,
cultures and business objectives.
In addition, they place a high priority on developing their employees’ skills. The training is designed
based on a proprietary in-house Advanced Management Program (AMP) leadership framework. This
includes their 3 tier Leadership Development programs: Senior Leaders Development Program (Tier 1),
Achieving Your Leadership Potential (Tier 2) and Emerging Leaders Program (Tier 3) which were
formulated and developed internally. Furthermore, they employ a blended learning philosophy that
involves on-the-job training, virtual live training, e-learning, action learning projects and many more.
2.4.1. Employee skills
Appropriation of Technology Tata Power Delhi Distribution Limited has a commendable workforce, with
high skills and capacities. All employees are recruited based on their merit and qualifications.
Appropriation of Technology Tata Power Delhi Distribution Limited prides itself on hiring the best
professionals and grooming them further to facilitate growth and development.

2.4.2. Employee skills vs task requirements
Appropriation of Technology Tata Power Delhi Distribution Limited has defined tasks and job roles and
hires and trains employees for skill levels accordingly with respect to those. The company ensures that
all its job requirements are met and that employees have the sufficient skills to perform their respective
jobs in accordance with the values and culture as well as the business goals and strategy of
Appropriation of Technology Tata Power Delhi Distribution Limited.
2.4.3. Skill management
Appropriation of Technology Tata Power Delhi Distribution Limited pays particular attention to
enhancing the skills and capacities of its employees. It arranges regular training and workshops –
internally as well as externally managed- to provide growth and development opportunities for its
employees. Appropriation of Technology Tata Power Delhi Distribution Limited focuses on personal as
well as professional growth for its employees and works accordingly with them.
2.4.4. Company’s competitive advantage
The human resource is one of the core competitive advantages of the company. The skills of employees
are developed specifically for job roles and requirements at Appropriation of Technology Tata Power
Delhi Distribution Limited and provide a competitive benefit to the company – where players cannot
imitate employee skills or training. This creates a unique and non-substitutable competency for
Appropriation of Technology Tata Power Delhi Distribution Limited.
SWOT Analysis
SWOT Analysis can help TATA Power build upon its strengths and opportunities while addressing its
weaknesses as well as threats to improve its market position.
Tata Power Strengths
The strengths of Tata Power looks at the key aspects of its business which gives it competitive advantage
in the market. Some important factors in a brand's strengths include its financial position, experienced
workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the
SWOT Analysis of Tata Power :
1. Can leverage on the “Tata” brand which signifies Trust
2. Capable of expansion since it has large reserves and low Debt-Equity Ratio
3. Access to newer technologies
4. Tata Power uses various ways of generating power i.e. thermal, hydro, wind, solar energies etc.
5. Malaysia, Saudia Arabia, Kuwait, Singapore, Cyprus etc are some places where Tata Power has made
its presence felt.
6. Despite having a comparitively small employee workforce of 3000-odd employees, the skills of each
employee is of the highest level

Some of the essential aspects of the company such as strong financial position, skilled personnel, brand
value and product differentiation contribute to an edge in the competition. Following are TATA Power’s
strengths:
Differentiated product portfolio targeted at various customer segments within power utility industry:
The company’s wide product offerings have aided the business in penetrating various market segments
within the same sector which has greatly contributed to diversified revenue streams.
One of the pioneers in innovation: Although several companies strive to innovate for survival in this
industry, TATA Power has already taken the lead with a solid track record of consumer-driven
innovation.
Broad geographic reach including global presence: The company has a strong and extensive network
of dealership and associates that not only facilitates in providing exceptional and efficient services but
also in handling competitive challenges within the industry. Moreover, the company has made
significant presence in countries such as Malaysia, Kuwait, Saudi Arabia, Singapore and Cyprus.
Highly skilled human resource: The workforce in TATA Power is one of their competitive advantages and
they are continually trained and developed for professional and personal growth. Also, they are
acquired based on merits and qualifications to ensure they have the best out of best.
High profit margins compared to its rivals: Although the company is experiencing downward pressure
on profits, it is still pulling in better profit margins compared to other companies in this sector.
Successful product mix: Tata Power Co. offers its customers a wide range of product mix options which
enables the company to appeal to different customer segments in this particular sector and a majority of
products have been successful to a greater extent.
Strengths are the firm's capabilities and resources that it can use to design, develop, and sustain
competitive advantage in the marketplace
- Brands catering to different customers segments within Electric Utilities segment - Tata Power Co.
extensive product offerings have helped the company to penetrate different customer segments in
Electric Utilities segment. It has also helped the organization to diversify revenue streams.
- Track record of innovation - Even though most players in the Utilities strive to innovate, Tata Power
Co. has successful record at consumer driven innovation.
- Wide geographic presence - Tata Power Co. has extensive dealer network and associates network that
not only help in delivering efficient services to the customers but also help in managing competitive
challenges in Electric Utilities industry.

- Talent management at Tata Power Co. and skill development of the employees - Human resources
are integral to the success of Tata Power Co. in Electric Utilities industry.
- High margins compare to Electric Utilities industry's competitors - Even though Tata Power Co. is
facing downward pressure on profitability, compare to competitors it is still racking in higher profit
margins.
- Success of new product mix - Tata Power Co. provides exhaustive product mix options to its customers.
It helps the company in catering to various customers segments in the Electric Utilities industry.
Tata Power Weaknesses
The weaknesses of a brand are certain aspects of its business which are it can improve to increase its
position further. Certain weaknesses can be defined as attributes which the company is lacking or in
which the competitors are better. Here are the weaknesses in the Tata Power SWOT Analysis:
1.Limited Market share due to intense competition
2.Limited presence in South India which is a lucrative market having IT hubs and no presence in Central
India.
Weaknesses of Tata Power Co. can either be absence of strengths or resources of capabilities that are
required but at present the organization doesn't have. Leaders have to be certain if the weakness is
present because of lack of strategic planning or as a result of strategic choice.
The weaknesses of TATA Power are different aspects of the business that can be either improved further
to strengthen its position or attributes that the company lacks compared to its competitors. The
following are the weaknesses identified in the SWOT analysis:
High dependence on dealer networks: Internet and Artificial Intelligence have drastically changed the
way businesses in the utility industry operates and have opened doors for more opportunities. However,
TATA Power Co. should increase its focus on building a robust supply chain which might be a costly
decision but will have long-term benefits in terms of competition.
Inadequate investments in customer-centric services: Although the company has considered
transforming into a customer-centric organization in the upcoming years, it has failed to focus on this
aspect for the past years. This may let its competitors to acquire an edge in the future. Therefore, the
company must enhance its expenditure in research and development, particularly in customer-oriented
applications.
Easily replicable business model: The business model of TATA Power Co. can be easily emulated by its
rivals in the market due to the absence of a sophisticated platform that integrates suppliers, vendors
and end users.

Difficulty in replacing the existing workforce: Employees in electric utility industry require high
technical skills and knowledge, and the company already has the best workforce and replacing them
would be a difficult and costly task to find the right talent.
- Extra cost of building new supply chain and logistics network - Internet and Artificial Intelligence has
significantly altered the business model in the Utilities industry and given the decreasing significance of
the dealer network Tata Power Co. has to build a new robust supply chain network. That can be
extremely expensive.
- Low investments into Tata Power Co.'s customer oriented services - This can lead to competitors
gaining advantage in near future. Tata Power Co. needs to increase investment into research and
development especially in customer services oriented applications.
- High cost of replacing existing experts within the Tata Power Co.. Few employees are responsible for
the Tata Power Co.'s knowledge base and replacing them will be extremely difficult in the present
conditions.
- Declining per unit revenue for Tata Power Co. - competitiveness in the Electric Utilities industry is
putting downward pressure on the profitability. A starting guide to manage this situation for
companyname is – objectively assessing the present value propositions of the various products.
- Business Model of Tata Power Co. can be easily imitated by the competitors in the Electric Utilities
industry. To overcome these challenges companyname needs to build a platform model that can
integrate suppliers, vendors and end users.
- Declining market share of Tata Power Co. with increasing revenues - the Electric Utilities industry is
growing faster than the company. In such a scenario Tata Power Co. has to carefully analyze the various
trends within the Utilities sector and figure out what it needs to do to drive future growth.
Tata Power Opportunities
The opportunities for any brand can include areas of improvement to increase its business. A brand's
opportunities can lie in geographic expansion, product improvements, better communication etc.
Following are the opportunities in Tata Power SWOT Analysis:
1.Increasing demand for power
2.Non-conventional sources of power

3.Expansion into third world countries and global expansion
Opportunities are potential areas where the firm can identify potential for - growth, profits, and market
share.
The opportunities for TATA Power Co. are the areas such as technology advancement, growing demand
for power, in which the company can capitalize on to increase or strengthen its business in its new
market Sri Lanka. The following are the opportunities identified for TATA Power Co. in Sri Lanka:
Demand for power: Sri Lanka’s overall electricity producing capacity of 40GWh as of 2021 and it is
forecasted to grow at almost 5% annually. The country is looking for Foreign Direct Investments to
increase the capacity to meet current and future power demands.
Demand for renewable energy: Due to the financial crisis in Sri Lanka, they have highly controlled the
imports of fuel which has resulted in prolong power outages. This has forced the country to rely more on
renewable energy resources and solar power is considered a lucrative option in the recent times.
Increase in inclination to higher end products: Although Sri Lanka is going through a hard time in terms
of economy, there still exist a large group of people who are willing to purchase products for the brand
recognition, value or positive customer experience despite the heavy price tag. Since TATA Power Co. is
well-renowned across the globe, it might be a win-win situation for the company to boost profits.
Rapid shifts in customer preferences: Customers today are more likely to experiment / test new product
in the market, owing to increased disposable incomes, easy access to information, and rapid acceptance
of technical products. Tata Power Co. must keep a close eye on not only the Electric Utilities business,
but also the broader Utilities sector.
Technological innovations and advances: Sri Lanka has the capacity to accommodate new technologies
in addition to the existing ones. Transmission and distribution efficiency has significantly increased as a
result. This will be a good opportunity for TATA Power Co. to bring in new technology within Sri Lanka’s
capacity to improve productivity.
Opportunities in the internet world: Tata Power Co. will be able to provide new services to clients in the
electric utilities sector as online services are increasingly used by consumers.
Easy tax policy:
- Rapid Expansion of Economy As the US economy is improving faster than any other developed
economy, it will provide Tata Power Co. an opportunity to expand into the US market. Tata Power Co.
already have know-how to operate into the competitive US market.
- Trend of customers migrating to higher end products - It represents great opportunity for Tata Power
Co., as the firm has strong brand recognition in the premium segment, customers have experience with
excellent customer services provided by Tata Power Co. brands in the lower segment. It can be a win-
win for the company and provides an opportunity to increase the profitability.

- Customer preferences are fast changing - Driven by rising disposable incomes, easy access to
information, and fast adoption of technological products, customers today are more willing to
experiment / try new products in the market. Tata Power Co. has to carefully monitor not only wider
trends within the Electric Utilities industry but also in the wider Utilities sector.
- Accelerated technological innovations and advances are improving industrial productivity, allowing
suppliers to manufacture vast array of products and services. This can help Tata Power Co. to
significantly venture into adjacent products.
- Lower inflation rate - The low inflation rate bring more stability in the market, enable credit at lower
interest rate to the customers of Tata Power Co.. This will increase the consumption of Tata Power Co.
products.
- Opportunities in Online Space - Increasing adoption of online services by customers will also enable
Tata Power Co. to provide new offerings to the customers in Electric Utilities industry.
Tata Power Threats
The threats for any business can be factors which can negatively impact its business. Some factors like
increased competitor activity, changing government policies, alternate products or services etc. can be
threats. The threats in the SWOT Analysis of Tata Power are as mentioned:
1. Fluctuating International prices of coal
2.Changes in International policies regarding import of coal and oil
3. Government policies and regulations
Threats are factors that can be potential dangers to the firm's business models because of changes in
macro economic factors and changing consumer perceptions. Threats can be managed but not
controlled.
The threats for TATA Power are the factors that the company has little to no control as it emerges from
the external environment that may be in the form of heavy rivalry, strict governmental policies, growing
concern for the environment. The following are the risks identified in Tata Power's SWOT analysis:
Monopoly power in the Sri Lankan Power sector: The state-owned CEB holds a complete monopoly in
terms of energy production, distribution and technological application. They have closed doors for every
other company and they retain total control. Although power generating and power plants have
contracts with private sectors, the CEB still has control over them. However, now Sri Lanka encourages
investments from private sectors to look for more renewable options, and Adani Group setting foot in
the country is one good example for which provisional approval was granted for two wind projects
(286MW in Mannar and 234MW in Pooneryn).

Political and economic instability: The economic crisis that resulted from the political corruption in the
nation has had a negative impact on every business, including the electricity and energy sectors.
Governmental rules may alter during power changes or as a result of unstable economic conditions.
Therefore, it may create an unfavorable environment for a new venture as TATA Power Co. in Sri Lanka.
Strict concern for environment: Electricity generation emits a significant amount of greenhouse gases,
contributing to smog, acid rain, and the development of fine particulate matter. To mitigate the adverse
effects on the environment, stringent rules and regulations are in place. Moreover, it is encouraged for
all industries including power sector to adopt green or environmentally friendly practices. It might pose
a challenge to TATA Power Co. to comply with all the laws and international standards, and it might
come at a cost.
Influence of international factors: Sri Lanka’s dependency on the international market for oil, pose
some degree of national security threats. The heavy dependence on the production and transportation
of fossil fuels causes national vulnerabilities since the rules enacted by the exporting countries can
impact the importing country.
High rate of skilled migration: Since the country's economic downturn, the rate of skilled migration has
skyrocketed. Because the power sector demands highly qualified and capable engineers and other
technicians, TATA Power Co. may have difficulty getting the proper expertise within the country.
- Trade Relation between US and China can affect Tata Power Co. growth plans - This can lead to full
scale trade war which can hamper the potential of Tata Power Co. to expand operations in China.
- Competitors catching up with the product development - Even though at present the Tata Power Co. is
still leader in product innovation in the Electric Utilities segment. It is facing stiff challenges from
international and local competitors.
- Commoditization of the product segment - The biggest challenge for Tata Power Co. and other players
in the industry is the increasing commoditization of the products in Utilities industry.
- Saturation in urban market and stagnation in the rural markets - For Tata Power Co. this trend is an
ongoing challenge in the Electric Utilities segment. One of the reasons is that the adoption of products is
slow in rural market. Secondly it is more costly for Tata Power Co. to serve the rural customers than
urban customers given the vast distances and lack of infrastructure.
- Growing technological expertise of local players in the export market - One of the biggest threats of
tie-up with the local players in the export market for Tata Power Co. is threat of losing IPR. The
intellectual property rights framework is not very strong in emerging markets especially in China.
- Changing demographics - As the babyboomers are retiring and new generation finding hard to replace
their purchasing power. This can lead to higher profits in the short run for Tata Power Co. but reducing
margins over the long run as young people are less brand loyal and more open to experimentation.
Rivalry: Adani’s project – wind energy