Iberdrola's Strategy: Business Model, Competition, and Performance

This report provides an in-depth examination of Iberdrola's strategy and business model, focusing on its competition strategy and performance measurement. Iberdrola's approach is centered around three strategic pillars: renewable energy production, smart grids, and customer-centric solutions, positioning it as a global leader in sustainable energy. The report utilizes the Balanced Scorecard (BSC) framework to evaluate performance across financial, internal processes, customer, and learning and growth perspectives. Recommendations are offered to enhance Iberdrola's operations, including developing energy storage technologies, leveraging digital transformation, expanding into new markets, improving customer engagement, and investing in employee development. The analysis highlights Iberdrola's commitment to sustainability and its efforts to integrate environmental considerations into its value chain. Ultimately, the report underscores how Iberdrola's strategic initiatives contribute to its competitiveness, adaptability in the renewable energy market, and sustained growth and leadership.

CAPSTONE: STRATEGY

Executive Summary
This report examines Iberdrola's strategy and business model, as well as its
competition strategy and performance measurement. Iberdrola's approach is
built on three strategic pillars: Renewable energy production, smart grids,
and implementing customer-centric solutions, which are the main factors
that make it the worldwide leader in sustainable energy (Ivarez-Meaza et al.
2020). The Balanced Scorecard (BSC) is a framework used to measure
performance in financial, internal processes, customers, and learning and
growth perspectives (Santos et al. 2023).
Furthermore, this report will present recommendations such as developing
energy storage technologies, taking advantage of digital transformation,
entering new markets, increasing customer contact, and continuing
employee development(Berarducci & Alejandro 2022). Iberdrola can improve
its social and environmental impact by incorporating sustainability into its
operations and value chain (Berarducci & Alejandro 2022). The
abovementioned strategy makes Iberdrola competitive and flexible in the
renewable energy market and ensures its continued growth and leadership.
It's crucial for Iberdrola's financial plan to align with its corporate goals, as
this provides the company's economic stability and long-term viability
(Berarducci & Alejandro 2022).
Iberdrola Company
Iberdrola, the world's leading energy supplier and the most renewable
energy-producing company, is the head of innovation, sustainability, and
global expansion (Pisciarelli 2021). Its unique business model, based on
sustainable energy solutions involving renewable energy production, smart
grids, and efficient distribution, is making a global impact (Pisciarelli 2021).
Iberdrola's strategy is rooted in a long-term plan to mitigate environmental
negative effects. Transitioning to clean energy and creating new technologies
is a testament to its global leadership. This report aims to delve into the
business models and current strategies, provide a detailed competition
strategy, and evaluate Iberdrola’s performance through well-designed
measurement frameworks ( Berarducci & Alejandro 2022).
The report will focus on Iberdrola's strategic initiatives, market positioning,
competitive landscape, and performance metrics (Da Costa 2019). From a
financial standpoint, our analysis will focus on revenue growth, cost
management, and return on investment, ensuring alignment with the
corporate goals (Majumdarr et al. (2023). The customer perspective will
center on customer satisfaction, brand loyalty, and market share, reflecting

the company's fulfillment of customer needs and expectations (Cooney et al.
2022) (Da Costa 2019). Regarding internal processes, we will focus on
operational efficiency, innovation capabilities, and technological
advancements, exploring how Iberdrola can leverage its resources to achieve
these objectives (Miguel 2023). Lastly, the learning and growth aspect will
concentrate on organizational culture, employee development, and
knowledge management, that is essential for competitiveness and
sustainable growth (Miguel 2023).
Organizational Strategy
Iberdrola's strategy, in line with its vision, is to lead the transitioning
towards a decarbonized and sustainable model. This is supported by three
strategic pillars: renewable energy production, smart grids, and customer-
oriented solutions. These pillars are not just areas of focus, but the very
foundation of Iberdrola's mission to provide clean, reliable, and innovative
energy solutions to a diverse global customer base. Initially, the firm's
commitment to generating renewable energy was the cornerstone of its
strategy. (Francesco, 2021). The company invests in wind, solar, and
hydroelectric power to diminish its carbon footprint and help achieve global
climate goals (Cooney et al. 2022).
The devotion to renewable energy reduces the environmental impacts and
makes Iberdrola the leader in the energy transition, attracting investors and
boosting its image as a sustainable energy provider (Ivarez-Meaza et al.
2020). The strategic concentration on increasing its renewable capacity has
allowed the company to reduce its dependence on fossil fuels. Hence, it is
possible to meet the Paris Agreement that has been internationally agreed
upon (Ivarez-Meaza et al. 2020).
Smart grids are not just a part of Iberdrola's strategy; they are of strategic
essence. Iberdrola is revolutionizing energy distribution networks by
integrating cutting-edge digital technologies, making them more efficient,
reliable, and resilient (Ivarez-Meaza et al. 2020). Smart grids enable demand
response, energy storage solutions, and real-time monitoring, all of which are
vital for integrating a growing proportion of renewable energy into the grid.
Technology advancements will enhance transportation operations' efficiency
and improve customer satisfaction by offering more flexible and reliable
energy services (Revell et al. 2022).
Iberdrola's investment in smart grids and commitment to upgrading
infrastructure and fostering innovation position it as a model in the global

energy sector (Mohanty & Sarkar 2020). But it's not just about technology.
Iberdrola also places a strong emphasis on customer-centric solutions. The
company has adapted to its customer's needs by offering products and
services such as smart home technologies, EV charging infrastructure, and
energy efficiency programs (Matos & Madaleno, 2022). This customer-
focused approach is a commitment to building lasting relationships and
enhancing customer loyalty. Iberdrola recognizes that value-added services
and digital platforms that enhances the customer experience and create a
competitive edge, leading to long-term profitability (Revell et al. 2022).
Competition Strategy
Iberdrola's approach to the competition strategy is not just complex, it's
successful. It's designed to capitalize on its strengths while solving the
dynamic challenges of the energetic market. The main aspect of this strategy
is the achievement through innovation and sustainability (Santos et al.
2023). By using energy renewable sources like wind, solar, and hydroelectric
power, Iberdrola stands out from the traditional energy companies that
depend on fossil fuels (Revell et al. 2022). This is not just a trend; it's a
strategic move that aligns with the worldwide shift to cleaner energy. It is
also an extraordinary selling feature in markets increasingly dominated by
environmental concerns (Vinuelas 2019). Iberdrola has expanded and
conquered vital international markets such as the United States, the United
Kingdom, and Brazil (Revell et al., 2022). This is because geographical
diversification can reduce the risks caused by market volatility and
regulatory changes in any region (Cooney et al. 2022). Iberdrola's ability to
balance its revenue streams by arranging different regulatory frameworks
and energy markets and taking advantage of global growth opportunities is a
testament to its strategic expertise (Miguel, 2023).
Strategic alliances and acquiring other companies are also essential to
Iberdrola's competitive strategy. By working with technology companies,
renewable energy startups, and other necessary parties, any company can
be ahead of the game regarding technology and innovation (Santos et al.
2023). The joint ventures grant access to new technologies, markets, and
expertise, strengthening Iberdrola. Moreover, Iberdrola focuses heavily on
research and development to advance new ideas and remain a technology
leader (Ivarez-Meaza et al. 2020). With constant research and development,

Iberdrola continues to innovate by improving its renewable energy
technologies, grid capabilities, and customer-centric solutions. This
dedication to innovation makes the operation process more efficient and
increases the product's total value for customers (Ivarez-Meaza et al. 2020).
Performance Measurement
Iberdrola utilizes a comprehensive performance measurement framework to
ensure alignment with strategic goals and effective progress monitoring
(Berarducci & Alejandro, 2022). The company employs financial and non-
financial metrics to gain a complete view of its performance. Financial
metrics like profitability, return on investment, revenue growth, and cost
efficiency are constantly monitored by management and serve as the basis
for understanding the company's financial health, business efficiency, and
market position (Berarducci & Alejandro, 2022). In addition to economic
measures, Iberdrola relies on environmental and social performance
indicators.
The company's key performance indicators (KPIs) include greenhouse gas
emissions reduction, renewable energy installation, energy efficiency, and
social impact metrics. These non-financial criteria align with Iberdrola's
sustainability and ESG (Environmental, Social, and Governance) agenda,
providing a comprehensive understanding of the company's environmental
and societal impact (Garrido-Merchan et al. 2023).
.1: Balanced Scorecard of Iberdrola Company
1:1 Financial Perspective
The BSC's financial focus is on the economic factors that ensure the
longevity and profitability of Iberdrola. Key numerical measures include
revenue growth, cost control, and return on investment (ROI) (Vinuelas
2019). Iberdrola aims to achieve high revenue growth by expanding its
renewable energy portfolio and entering new markets (Majumdarr et al
2023). Controlling costs is crucial for company survival. Therefore, the
company strives for operational efficiencies and process optimizations to
maintain competitiveness. ROI measures the success of investments in new
projects and technologies (Vinuelas 2019). It's essential to allocate resources
to projects and technologies that offer the best returns. Monitoring a
company's financial metrics provides insight into its economic health and
strategic financial position (Vinuelas 2019).

1:2 Customer Perspective
Iberdrola focuses on customer loyalty, satisfaction, and market share. The
company aims to improve customer satisfaction by offering reliable,
economically feasible, eco-friendly energy solutions (Da Costa 2019). They
use feedback mechanisms and satisfaction surveys used in aticipating
customer preferences and needs and then create custom solutions such as
smart home technologies and EV charging infrastructure (Da Costa 2019).
Market share analysis helps Iberdrola measure its competitive position in
different regions, enabling it to make necessary adjustments in marketing
and customer service to enhance its market position and customer loyalty.
The company's customer-centric initiatives aim to establish long-term
relationships with loyal customers (Revell et al. 2022).
1:3 Internal Processes Perspective
The internal processes perspective focuses on the operational efficiencies
and innovations that enable Iberdrola to execute its strategic agenda. This
section encompasses operational efficiency, process optimization, and
innovation capabilities (Majumdarr et al. 2023). Iberdrola achieves cost
reductions and increased service reliability through its efficient renewable
energy production and distribution processes. The main elements of this
strategy include innovative grid technology and advanced energy storage
systems, which enhance energy management and facilitate the integration
of renewables (Pisciarelli 2021). Furthermore, the innovation metrics ensure
that Iberdrola keeps up with the industry by adopting new technologies and
reflecting the research and development results, thereby helping Iberdrola
maintain a competitive edge (Majumdarr et al. 2023).
1:4 Learning and Growth Perspective
The blending of productivity and innovation emphasizes the importance of
organizational well-being, employee growth, and the development of a
learning culture (Pisciarelli 2021). This primary change includes employee
engagement, talent development, and knowledge management metrics.
Iberdrola implemented continuous training and development programs,
which allowed employees to become more competent (Migue 2023). As a
result, the workforce is well-prepared to meet the dynamic changes of
demands of the energy sector. Workplace surveys measure employee
satisfaction and organizational culture, providing insights for improving
worker morale and productivity (Miguel 2023).

Recommendations
Iberdrola should focus on several critical areas to capitalize on emerging
opportunities, enhance its performance, and solidify its position as a global
leader in the renewable energy industry. First, it is crucial to increase
investments in new energy storage technology. As the share of intermittent
renewable energy sources, such as wind and solar, continues to grow, energy
storage solutions can provide grid stability and reliability, ensuring an
uninterrupted energy supply (Majumdar et al., 2023). Additionally, Iberdrola
should focus on digitalization, particularly in big data and AI, to enable
predictive maintenance and operational optimization. The company can
quickly anticipate breakdowns, reduce energy production, and minimize
operational costs using current technology.
Moreover, improving customer engagement is another area that the
company should prioritize. Iberdrola can enhance its digital customer
experience by developing more user-friendly mobile apps and portals
offering real-time energy usage information, personalized advice, and
seamless services (Miguel 2023). These tools will enhance customer
satisfaction and encourage consumers to make more energy-efficient
decisions, aligning with Iberdrola's sustainability goals.
Conclusion
In conclusion, Iberdrola is a leader in the energy transition, with strengths in
renewable energy, smart grids, and customer-oriented solutions that it can
leverage to achieve its goals. The report presented a comprehensive
strategy and business model aligned with global sustainability trends and
cutting-edge technology. Through a balanced competition strategy and a
robust performance measurement system, Iberdrola is well-prepared to
navigate the complexities of the worldwide energy market.
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