Ludhiana City Bus Services Limited: Pricing for Profits SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Ludhiana City Bus Services Limited: Pricing for Profits
Ludhiana City Bus Service Limited (LCBSL) was created to improve the urban transportation system in the city of Ludhiana, India. As per the existing pricing strategy, bus fares (one of key revenue source for LCBSL) were set by the state government. LCBSL management was convinced that there was ample scope for raising the bus fares. The partial project implementation had been generating a return on capital of 1.9 per cent. To reduce this breakeven period and achieve targeted returns on capital of 4 per cent, management was considering the option to increase fares across different distance categories. Would this price restructuring be a game changer for LCBSL and a benchmark pricing strategy for other city bus service projects to follow?
Swot Analysis of "Ludhiana City Bus Services Limited: Pricing for Profits" written by Neeraj Pandey, Gaganpreet Singh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lcbsl Bus facing as an external strategic factors. Some of the topics covered in Ludhiana City Bus Services Limited: Pricing for Profits case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Ludhiana City Bus Services Limited: Pricing for Profits casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, geopolitical disruptions, increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Ludhiana City Bus Services Limited: Pricing for Profits
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ludhiana City Bus Services Limited: Pricing for Profits case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lcbsl Bus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lcbsl Bus 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 Ludhiana City Bus Services Limited: Pricing for Profits can be done for the following purposes –
1. Strategic planning using facts provided in Ludhiana City Bus Services Limited: Pricing for Profits case study
2. Improving business portfolio management of Lcbsl Bus
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lcbsl Bus
Strengths Ludhiana City Bus Services Limited: Pricing for Profits | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lcbsl Bus in Ludhiana City Bus Services Limited: Pricing for Profits Harvard Business Review case study are -
Training and development
– Lcbsl Bus has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ludhiana City Bus Services Limited: Pricing for Profits Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Lcbsl Bus 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 industry. The technology infrastructure suggested by Neeraj Pandey, Gaganpreet Singh can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Lcbsl Bus has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Ludhiana City Bus Services Limited: Pricing for Profits - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Ludhiana City Bus Services Limited: Pricing for Profits firm has clearly differentiated products in the market place. This has enabled Lcbsl Bus to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Lcbsl Bus to invest into research and development (R&D) and innovation.
Innovation driven organization
– Lcbsl Bus is one of the most innovative firm in sector. Manager in Ludhiana City Bus Services Limited: Pricing for Profits Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Lcbsl Bus is one of the leading recruiters in the industry. Managers in the Ludhiana City Bus Services Limited: Pricing for Profits are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Lcbsl Bus are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
High brand equity
– Lcbsl Bus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lcbsl Bus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Lcbsl Bus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lcbsl Bus 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.
Superior customer experience
– The customer experience strategy of Lcbsl Bus in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Lcbsl Bus has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Ludhiana City Bus Services Limited: Pricing for Profits HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Lcbsl Bus in the sector have low bargaining power. Ludhiana City Bus Services Limited: Pricing for Profits has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lcbsl Bus to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Ludhiana City Bus Services Limited: Pricing for Profits | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ludhiana City Bus Services Limited: Pricing for Profits are -
Need for greater diversity
– Lcbsl Bus has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lcbsl Bus is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ludhiana City Bus Services Limited: Pricing for Profits can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Lcbsl Bus, firm in the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Lcbsl Bus supply chain. Even after few cautionary changes mentioned in the HBR case study - Ludhiana City Bus Services Limited: Pricing for Profits, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lcbsl Bus vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits, it seems that the employees of Lcbsl Bus 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 operating costs
– Compare to the competitors, firm in the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lcbsl Bus 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Lcbsl Bus 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
– It come across in the case study Ludhiana City Bus Services Limited: Pricing for Profits that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ludhiana City Bus Services Limited: Pricing for Profits can leverage the sales team experience to cultivate customer relationships as Lcbsl Bus is planning to shift buying processes online.
Lack of clear differentiation of Lcbsl Bus products
– To increase the profitability and margins on the products, Lcbsl Bus needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ludhiana City Bus Services Limited: Pricing for Profits HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lcbsl Bus has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Lcbsl Bus 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 industry using digital technology.
Opportunities Ludhiana City Bus Services Limited: Pricing for Profits | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Ludhiana City Bus Services Limited: Pricing for Profits are -
Loyalty marketing
– Lcbsl Bus 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.
Building a culture of innovation
– managers at Lcbsl Bus 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 Sales & Marketing segment.
Better consumer reach
– The expansion of the 5G network will help Lcbsl Bus to increase its market reach. Lcbsl Bus will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Lcbsl Bus can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Lcbsl Bus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Lcbsl Bus 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.
Creating value in data economy
– The success of analytics program of Lcbsl Bus has opened avenues for new revenue streams for the organization in the industry. This can help Lcbsl Bus to build a more holistic ecosystem as suggested in the Ludhiana City Bus Services Limited: Pricing for Profits case study. Lcbsl Bus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lcbsl Bus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lcbsl Bus 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, as suggested in case study, Ludhiana City Bus Services Limited: Pricing for Profits, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Lcbsl Bus 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lcbsl Bus 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. Lcbsl Bus 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lcbsl Bus is facing challenges because of the dominance of functional experts in the organization. Ludhiana City Bus Services Limited: Pricing for Profits case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Lcbsl Bus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Ludhiana City Bus Services Limited: Pricing for Profits External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits 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.
Technology acceleration in Forth Industrial Revolution
– Lcbsl Bus has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Lcbsl Bus needs to keep up with the evolution of technology in the Sales & Marketing 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.
Regulatory challenges
– Lcbsl Bus 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 Sales & Marketing industry regulations.
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. Lcbsl Bus 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.
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 Lcbsl Bus.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lcbsl Bus 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 prominent markets illustrated in HBR case study Ludhiana City Bus Services Limited: Pricing for Profits .
Stagnating economy with rate increase
– Lcbsl Bus 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 field.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ludhiana City Bus Services Limited: Pricing for Profits, Lcbsl Bus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lcbsl Bus in the Sales & Marketing industry. The Sales & Marketing 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.
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. Lcbsl Bus needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Environmental challenges
– Lcbsl Bus 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. Lcbsl Bus can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lcbsl Bus with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Ludhiana City Bus Services Limited: Pricing for Profits Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits 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 the case study Ludhiana City Bus Services Limited: Pricing for Profits 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 the Harvard case study Ludhiana City Bus Services Limited: Pricing for Profits 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 Ludhiana City Bus Services Limited: Pricing for Profits is 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 Lcbsl Bus needs to make to build a sustainable competitive advantage.