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
This case 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 infrastructure investment arm. The tunnel opened for traffic in 2005. This case 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-operate-transfer project finance arrangements put into place to develop and finance the tunnel venture. The case 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 Frederik Pretorius, Mary Ho 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, 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 - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing transportation and logistics costs, increasing commodity prices, supply chains are disrupted by pandemic , geopolitical disruptions,
technology disruption, there is backlash against globalization, 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 -
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.
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.
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.
Ability to recruit top talent
– Tunnel Infrastructure is one of the leading recruiters in the industry. Managers in the Infrastructure Finance: The Sydney Cross City Tunnel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Tunnel Infrastructure 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.
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.
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.
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.
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.
Organizational Resilience of Tunnel Infrastructure
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tunnel Infrastructure does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Tunnel Infrastructure 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 Tunnel Infrastructure in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Infrastructure Finance: The Sydney Cross City Tunnel 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 Tunnel Infrastructure has relatively successful track record of launching new products.
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.
High cash cycle compare to competitors
Tunnel Infrastructure 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 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.
Capital Spending Reduction
– Even during the low interest decade, Tunnel Infrastructure 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.
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 Tunnel Infrastructure supply chain. Even after few cautionary changes mentioned in the HBR case study - Infrastructure Finance: The Sydney Cross City Tunnel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tunnel Infrastructure vulnerable to further global disruptions in South East Asia.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Infrastructure Finance: The Sydney Cross City Tunnel, is just above the industry average. Tunnel Infrastructure needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Tunnel Infrastructure 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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Tunnel Infrastructure 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tunnel Infrastructure 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, Infrastructure Finance: The Sydney Cross City Tunnel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Tunnel Infrastructure 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.
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.
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.
Manufacturing automation
– Tunnel Infrastructure 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.
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.
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.
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.
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.
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.
Using analytics as competitive advantage
– Tunnel Infrastructure 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 Infrastructure Finance: The Sydney Cross City Tunnel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tunnel Infrastructure to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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. Tunnel Infrastructure needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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 .
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.
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.
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.
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 Tunnel Infrastructure.
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 .
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.
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.
Technology acceleration in Forth Industrial Revolution
– Tunnel Infrastructure has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Tunnel Infrastructure 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.
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.
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 Tunnel Infrastructure business can come under increasing regulations regarding data privacy, data security, etc.
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.
