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 - – challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Ludhiana City Bus Services Limited: Pricing for Profits Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
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 -
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.
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.
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.
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.
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.
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 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Neeraj Pandey, Gaganpreet Singh suggests that, Lcbsl Bus is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lcbsl Bus can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lcbsl Bus can use these opportunities to build new business models that can help the communities that Lcbsl Bus operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
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 -
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.
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.
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.
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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lcbsl Bus business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lcbsl Bus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 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.
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.
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.
