Case Study Description of Towngas: Achieving Competitive Advantage Through Customer Relationship Management
Towngas, an exclusive supplier of piped naphtha gas and one of the oldest energy suppliers in Hong Kong, invested millions of dollars in its customer relationship management program. The results were higher customer satisfaction as well as new products that generate extra revenue. Explores the reason behind Towngas' choice to use CRM as a tool to strengthen its business and the ways it successfully implemented its CRM strategies. Also discusses why many other companies that had also invested a lot of money in CRM did not succeed in getting the expected return.
Swot Analysis of "Towngas: Achieving Competitive Advantage Through Customer Relationship Management" written by Benjamin Yen, Monica Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Towngas Crm facing as an external strategic factors. Some of the topics covered in Towngas: Achieving Competitive Advantage Through Customer Relationship Management case study are - Strategic Management Strategies, Customer service, Customers and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Towngas: Achieving Competitive Advantage Through Customer Relationship Management casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Towngas: Achieving Competitive Advantage Through Customer Relationship Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Towngas: Achieving Competitive Advantage Through Customer Relationship Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Towngas Crm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Towngas Crm 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management can be done for the following purposes –
1. Strategic planning using facts provided in Towngas: Achieving Competitive Advantage Through Customer Relationship Management case study
2. Improving business portfolio management of Towngas Crm
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Towngas Crm
Strengths Towngas: Achieving Competitive Advantage Through Customer Relationship Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Towngas Crm in Towngas: Achieving Competitive Advantage Through Customer Relationship Management Harvard Business Review case study are -
Successful track record of launching new products
– Towngas Crm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Towngas Crm 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 Towngas Crm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Towngas Crm 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 Towngas Crm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Towngas: Achieving Competitive Advantage Through Customer Relationship Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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.
Diverse revenue streams
– Towngas Crm is present in almost all the verticals within the industry. This has provided firm in Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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.
Analytics focus
– Towngas Crm 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 Benjamin Yen, Monica Wong 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.
Low bargaining power of suppliers
– Suppliers of Towngas Crm in the sector have low bargaining power. Towngas: Achieving Competitive Advantage Through Customer Relationship Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Towngas Crm to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Towngas Crm 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Towngas Crm 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 Towngas Crm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Towngas Crm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Towngas Crm is one of the leading recruiters in the industry. Managers in the Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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
– Towngas Crm is one of the most innovative firm in sector. Manager in Towngas: Achieving Competitive Advantage Through Customer Relationship Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Towngas: Achieving Competitive Advantage Through Customer Relationship Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Towngas: Achieving Competitive Advantage Through Customer Relationship Management are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas Crm has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Towngas Crm is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Towngas Crm has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners
– Because of the regulatory requirements, Benjamin Yen, Monica Wong suggests that, Towngas Crm 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.
Low market penetration in new markets
– Outside its home market of Towngas Crm, firm in the HBR case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management, in the dynamic environment Towngas Crm has struggled to respond to the nimble upstart competition. Towngas Crm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Towngas Crm 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.
Aligning sales with marketing
– It come across in the case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management can leverage the sales team experience to cultivate customer relationships as Towngas Crm is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Towngas: Achieving Competitive Advantage Through Customer Relationship Management HBR case study mentions - Towngas Crm 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.
Lack of clear differentiation of Towngas Crm products
– To increase the profitability and margins on the products, Towngas Crm needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas Crm 's lucrative customers.
Opportunities Towngas: Achieving Competitive Advantage Through Customer Relationship Management | 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Towngas Crm 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, Towngas: Achieving Competitive Advantage Through Customer Relationship Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Towngas Crm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Towngas Crm is facing challenges because of the dominance of functional experts in the organization. Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Towngas Crm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Towngas Crm to increase its market reach. Towngas Crm 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.
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 Towngas Crm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Towngas Crm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Towngas Crm 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.
Leveraging digital technologies
– Towngas Crm 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.
Developing new processes and practices
– Towngas Crm can develop new processes and procedures in Strategy & Execution 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
– Towngas Crm can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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 Towngas Crm in the consumer business. Now Towngas Crm can target international markets with far fewer capital restrictions requirements than the existing system.
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. Towngas Crm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Towngas: Achieving Competitive Advantage Through Customer Relationship Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management are -
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 Towngas Crm.
Consumer confidence and its impact on Towngas Crm 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.
Regulatory challenges
– Towngas Crm 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 Strategy & Execution industry regulations.
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 Towngas Crm business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Towngas Crm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Towngas Crm in the Strategy & Execution industry. The Strategy & Execution 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.
Technology acceleration in Forth Industrial Revolution
– Towngas Crm has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Towngas Crm needs to keep up with the evolution of technology in the Strategy & Execution 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Towngas Crm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Towngas Crm 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.
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 Towngas Crm in the Strategy & Execution sector and impact the bottomline of the organization.
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. Towngas Crm needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management, Towngas Crm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management 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 Towngas Crm needs to make to build a sustainable competitive advantage.