ABB SWOT & PESTLE Analysis

Strength

1. Global footprint: ABB enjoys a dominant position in several markets that it serves. The company is one of the leading power and automation engineering companies in the world with operations in around 100 countries across Europe, Asia, Middle East and Africa (AMEA), and the Americas. ABB, one of the largest manufacturers of electric motors and drives, serves these markets through a global production, engineering and service base. The company's strong positions in these markets are well backed by its local R&D and product development capabilities, which enable it to match and even exceed local competitors in terms of the speed of product development and deployment. In the time ahead, with the maximum demand for infrastructure projects to come from developing countries, ABB is well placed to exploit that in the long run.

2. Long Term Contracts: With the long-term nature of the contract in the infrastructure projects, a stable and constant revenue is ensured to ABB. Also, with the development and expansion of local service base, a long term relationship with clients with the potential of repeat orders is ensured.

3. Diverse product portfolio: ABB is highly focused on technological development to help drive its competitiveness in the marketplace. It invests hugely in R&D, which in turn develop new and innovative products as well as strengthen its existing product portfolio.

Weakness

1. Involvement in anti-competitive practices: ABB has been involved in various antitrust activities. In 2014, the EU Commission took the decision regarding its investigation of anticompetitive practices in the cables industry. In 2013, the company and Brazilian Antitrust Authority (CADE) agreed to settle its ongoing investigation into ABB’s involvement in anticompetitive practices in the cables industry. Company's cables business remains under investigation for alleged anticompetitive practices in certain other jurisdictions. ABB’s brand image is adversely affected by its frequent involvement in these investigations.

Opportunity

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Threat

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Political

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Economic

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Social

1. Acceptance of automation and digital technologies: Automation and digital technologies will significantly change the business processes and the nature of work. There will be reskilling of labor required and can also result in workforce redundancy in some areas. ABB is majorly investing in automation and digital technologies in its business segments, but social acceptance of the same and the rate of adoption may vary with the increase in sophistication of automation and digitization. Regulatory policies and approach taken by businesses can also slow down adoption. Also individuals may not be comfortable interacting with machines especially in sensitive areas like hospitals where the decisions to be made are critical.

Technological

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Legal

1. Strong regulatory and business compliance program: An organizational culture with integrity embedded into business processes is important for an organization to mature as a responsible company. ABB has built a strong compliance program over the years and the company strives to include integrity embedded in its people, businesses and processes. Further Integrity is also one of ABB's five strategic imperatives. ABB’s employees are also trained to abide by antitrust requirements and be aware of the regulatory risks and safeguarding of confidential information when dealing with business partners and the larger communities where it operates. ABB has been previously involved with Brazilian Antitrust Authority (CADE) in 2013 for involvement in anticompetitive practices and the new organizational standards ensure higher regulatory compliance.

Environmental

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