Ludhiana City Bus Services Limited: Pricing for Profits SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
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 - – there is backlash against globalization, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
High switching costs
– The high switching costs that Lcbsl Bus 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.
Organizational Resilience of Lcbsl Bus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lcbsl Bus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Diverse revenue streams
– Lcbsl Bus is present in almost all the verticals within the industry. This has provided firm in Ludhiana City Bus Services Limited: Pricing for Profits case study 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.
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.
Learning organization
- Lcbsl Bus 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 Lcbsl Bus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ludhiana City Bus Services Limited: Pricing for Profits Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
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 -
Interest costs
– Compare to the competition, Lcbsl Bus 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ludhiana City Bus Services Limited: Pricing for Profits, in the dynamic environment Lcbsl Bus has struggled to respond to the nimble upstart competition. Lcbsl Bus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Ludhiana City Bus Services Limited: Pricing for Profits, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. 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.
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.
Slow decision making process
– As mentioned earlier in the report, Lcbsl Bus has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Lcbsl Bus 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.
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.
Increasing silos among functional specialists
– The organizational structure of Lcbsl Bus is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Lcbsl Bus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lcbsl Bus to focus more on services rather than just following the product oriented approach.
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.
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.
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.
Slow to strategic competitive environment developments
– As Ludhiana City Bus Services Limited: Pricing for Profits HBR case study mentions - Lcbsl Bus takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lcbsl Bus 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 Lcbsl Bus to hire the very best people irrespective of their geographical location.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Lcbsl Bus 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.
Developing new processes and practices
– Lcbsl Bus can develop new processes and procedures in Sales & Marketing 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.
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.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lcbsl Bus in the consumer business. Now Lcbsl Bus can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lcbsl Bus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
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.
Using analytics as competitive advantage
– Lcbsl Bus has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Ludhiana City Bus Services Limited: Pricing for Profits - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lcbsl Bus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 -
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 Lcbsl Bus in the Sales & Marketing sector and impact the bottomline of the organization.
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 .
High dependence on third party suppliers
– Lcbsl Bus high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Lcbsl Bus demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Shortening product life cycle
– it is one of the major threat that Lcbsl Bus is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
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 .
Increasing wage structure of Lcbsl Bus
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lcbsl Bus.
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.
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.
