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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing household debt because of falling income levels,
there is backlash against globalization, there is increasing trade war between United States & China, 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 -
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.
Highly skilled collaborators
– Towngas Crm 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Cross disciplinary teams
– Horizontal connected teams at the Towngas Crm 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.
Ability to lead change in Strategy & Execution field
– Towngas Crm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Towngas Crm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Towngas: Achieving Competitive Advantage Through Customer Relationship Management firm has clearly differentiated products in the market place. This has enabled Towngas Crm to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Towngas Crm to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Towngas Crm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Towngas Crm has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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 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 Towngas Crm supply chain. Even after few cautionary changes mentioned in the HBR case study - Towngas: Achieving Competitive Advantage Through Customer Relationship Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Towngas Crm vulnerable to further global disruptions in South East Asia.
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.
Interest costs
– Compare to the competition, Towngas Crm 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.
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.
Skills based hiring
– The stress on hiring functional specialists at Towngas Crm 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Towngas: Achieving Competitive Advantage Through Customer Relationship Management, it seems that the employees of Towngas Crm 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 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.
Products dominated business model
– Even though Towngas Crm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Towngas: Achieving Competitive Advantage Through Customer Relationship Management should strive to include more intangible value offerings along with its core products and services.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Towngas Crm is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Towngas Crm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Towngas Crm to focus more on services rather than just following the product oriented approach.
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 -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Towngas Crm 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. Towngas Crm 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Towngas Crm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Towngas Crm 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 Towngas Crm to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Towngas Crm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Towngas: Achieving Competitive Advantage Through Customer Relationship Management suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
Building a culture of innovation
– managers at Towngas Crm 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 Strategy & Execution segment.
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.
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.
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.
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 -
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.
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.
Environmental challenges
– Towngas Crm 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. Towngas Crm can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
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 .
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Towngas Crm 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 Towngas: Achieving Competitive Advantage Through Customer Relationship Management .
Shortening product life cycle
– it is one of the major threat that Towngas Crm is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Towngas Crm
– 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 Towngas Crm.
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.
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.