Infrastructure Finance: The Sydney Cross City Tunnel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Infrastructure Finance: The Sydney Cross City Tunnel
Explores events surrounding the development of the Sydney Cross City Tunnel, an innovative infrastructure project developed by the New South Wales government in Australia in conjunction with Cheung Kong Infrastructure, Cheung Kong's Hong Kong-listed infrastructure investment arm. The tunnel opened for traffic in 2005. Analyzes three matters: the political and institutional background that led to the decision to develop the Cross City Tunnel; the general economic assumptions upon which the venture had been based; and the build-own-operate-transfer project finance arrangements put into place to develop and finance the tunnel venture. Explains the project finance arrangements surrounding a typical road transport infrastructure which seems to have failed, and raises questions about estimates of demand for the tunnel and traffic management arrangements surrounding access to the tunnel.
Swot Analysis of "Infrastructure Finance: The Sydney Cross City Tunnel" written by Mary Ho, Frederik Pretorius includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tunnel Infrastructure facing as an external strategic factors. Some of the topics covered in Infrastructure Finance: The Sydney Cross City Tunnel case study are - Strategic Management Strategies, Project management, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Infrastructure Finance: The Sydney Cross City Tunnel casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Infrastructure Finance: The Sydney Cross City Tunnel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Infrastructure Finance: The Sydney Cross City Tunnel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tunnel Infrastructure, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel can be done for the following purposes –
1. Strategic planning using facts provided in Infrastructure Finance: The Sydney Cross City Tunnel case study
2. Improving business portfolio management of Tunnel Infrastructure
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 Tunnel Infrastructure
Strengths Infrastructure Finance: The Sydney Cross City Tunnel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tunnel Infrastructure in Infrastructure Finance: The Sydney Cross City Tunnel Harvard Business Review case study are -
High switching costs
– The high switching costs that Tunnel Infrastructure 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.
Low bargaining power of suppliers
– Suppliers of Tunnel Infrastructure in the sector have low bargaining power. Infrastructure Finance: The Sydney Cross City Tunnel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tunnel Infrastructure to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tunnel Infrastructure is present in almost all the verticals within the industry. This has provided firm in Infrastructure Finance: The Sydney Cross City Tunnel 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.
Training and development
– Tunnel Infrastructure has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Infrastructure Finance: The Sydney Cross City Tunnel 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.
Effective Research and Development (R&D)
– Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Strategy & Execution industry
– Infrastructure Finance: The Sydney Cross City Tunnel firm has clearly differentiated products in the market place. This has enabled Tunnel Infrastructure to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Tunnel Infrastructure to invest into research and development (R&D) and innovation.
Strong track record of project management
– Tunnel Infrastructure is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Tunnel Infrastructure has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tunnel Infrastructure 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.
Operational resilience
– The operational resilience strategy in the Infrastructure Finance: The Sydney Cross City Tunnel 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.
Innovation driven organization
– Tunnel Infrastructure is one of the most innovative firm in sector. Manager in Infrastructure Finance: The Sydney Cross City Tunnel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Tunnel Infrastructure has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tunnel Infrastructure to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Tunnel Infrastructure 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 Tunnel Infrastructure is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Infrastructure Finance: The Sydney Cross City Tunnel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Infrastructure Finance: The Sydney Cross City Tunnel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Infrastructure Finance: The Sydney Cross City Tunnel are -
Workers concerns about automation
– As automation is fast increasing in the segment, Tunnel Infrastructure needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Infrastructure Finance: The Sydney Cross City Tunnel, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Products dominated business model
– Even though Tunnel Infrastructure 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 - Infrastructure Finance: The Sydney Cross City Tunnel should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Tunnel Infrastructure 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. Tunnel Infrastructure 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.
Lack of clear differentiation of Tunnel Infrastructure products
– To increase the profitability and margins on the products, Tunnel Infrastructure needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Infrastructure Finance: The Sydney Cross City Tunnel 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 Infrastructure Finance: The Sydney Cross City Tunnel can leverage the sales team experience to cultivate customer relationships as Tunnel Infrastructure is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Infrastructure Finance: The Sydney Cross City Tunnel 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 Tunnel Infrastructure 's lucrative customers.
Slow to strategic competitive environment developments
– As Infrastructure Finance: The Sydney Cross City Tunnel HBR case study mentions - Tunnel Infrastructure 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Infrastructure Finance: The Sydney Cross City Tunnel, in the dynamic environment Tunnel Infrastructure has struggled to respond to the nimble upstart competition. Tunnel Infrastructure has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Tunnel Infrastructure, firm in the HBR case study Infrastructure Finance: The Sydney Cross City Tunnel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Tunnel Infrastructure is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Tunnel Infrastructure needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tunnel Infrastructure to focus more on services rather than just following the product oriented approach.
Opportunities Infrastructure Finance: The Sydney Cross City Tunnel | 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 Infrastructure Finance: The Sydney Cross City Tunnel are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tunnel Infrastructure can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Tunnel Infrastructure can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Infrastructure Finance: The Sydney Cross City Tunnel 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.
Developing new processes and practices
– Tunnel Infrastructure 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tunnel Infrastructure can use these opportunities to build new business models that can help the communities that Tunnel Infrastructure operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Tunnel Infrastructure 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.
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. Tunnel Infrastructure can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Tunnel Infrastructure in the consumer business. Now Tunnel Infrastructure can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Tunnel Infrastructure to increase its market reach. Tunnel Infrastructure 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tunnel Infrastructure 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tunnel Infrastructure is facing challenges because of the dominance of functional experts in the organization. Infrastructure Finance: The Sydney Cross City Tunnel 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.
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. Tunnel Infrastructure 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. Tunnel Infrastructure 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.
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. Tunnel Infrastructure can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tunnel Infrastructure 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.
Threats Infrastructure Finance: The Sydney Cross City Tunnel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Infrastructure Finance: The Sydney Cross City Tunnel are -
Environmental challenges
– Tunnel Infrastructure 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. Tunnel Infrastructure can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel, Tunnel Infrastructure 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 .
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tunnel Infrastructure can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Tunnel Infrastructure is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel .
Increasing wage structure of Tunnel Infrastructure
– 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 Tunnel Infrastructure.
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 Tunnel Infrastructure 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tunnel Infrastructure with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Tunnel Infrastructure 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.
Consumer confidence and its impact on Tunnel Infrastructure 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.
Weighted SWOT Analysis of Infrastructure Finance: The Sydney Cross City Tunnel 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 Infrastructure Finance: The Sydney Cross City Tunnel 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 Infrastructure Finance: The Sydney Cross City Tunnel 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 Infrastructure Finance: The Sydney Cross City Tunnel 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 Infrastructure Finance: The Sydney Cross City Tunnel 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 Tunnel Infrastructure needs to make to build a sustainable competitive advantage.