On Two Wheels in Paris: The Velib' Bicycle-Sharing Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of On Two Wheels in Paris: The Velib' Bicycle-Sharing Program
To maximize their effectiveness, color cases should be printed in color.French advertising company JCDecaux and the city of Paris jointly developed VA?lib', a wildly popular bicycle sharing system. Despite VA?lib's public appeal, vandalism and theft led to ballooning operating costs-costs borne by JCDecaux alone. The two parties opted to renegotiate their contract, which would impact prices, revenue sharing, cost allocation, and the operation of the system as a whole. Could the parties agree on a common strategy that would meet their objectives, while still delivering a first class bicycle sharing service to the city of Paris?
Authors :: Peter A. Coles, Elena Corsi, Vincent Dessain
Swot Analysis of "On Two Wheels in Paris: The Velib' Bicycle-Sharing Program" written by Peter A. Coles, Elena Corsi, Vincent Dessain includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bicycle Sharing facing as an external strategic factors. Some of the topics covered in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program case study are - Strategic Management Strategies, Growth strategy, International business, Joint ventures, Marketing, Negotiations, Policy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the On Two Wheels in Paris: The Velib' Bicycle-Sharing Program casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
increasing commodity prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of On Two Wheels in Paris: The Velib' Bicycle-Sharing Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bicycle Sharing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bicycle Sharing 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program can be done for the following purposes –
1. Strategic planning using facts provided in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program case study
2. Improving business portfolio management of Bicycle Sharing
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 Bicycle Sharing
Strengths On Two Wheels in Paris: The Velib' Bicycle-Sharing Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bicycle Sharing in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program Harvard Business Review case study are -
Analytics focus
– Bicycle Sharing 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 Peter A. Coles, Elena Corsi, Vincent Dessain 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.
Diverse revenue streams
– Bicycle Sharing is present in almost all the verticals within the industry. This has provided firm in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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.
Superior customer experience
– The customer experience strategy of Bicycle Sharing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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.
Low bargaining power of suppliers
– Suppliers of Bicycle Sharing in the sector have low bargaining power. On Two Wheels in Paris: The Velib' Bicycle-Sharing Program has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bicycle Sharing to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Bicycle Sharing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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.
High brand equity
– Bicycle Sharing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bicycle Sharing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Bicycle Sharing 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 Bicycle Sharing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Bicycle Sharing 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.
Effective Research and Development (R&D)
– Bicycle Sharing 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Bicycle Sharing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bicycle Sharing 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.
Organizational Resilience of Bicycle Sharing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bicycle Sharing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses On Two Wheels in Paris: The Velib' Bicycle-Sharing Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of On Two Wheels in Paris: The Velib' Bicycle-Sharing Program are -
No frontier risks strategy
– After analyzing the HBR case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program, 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.
Aligning sales with marketing
– It come across in the case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program can leverage the sales team experience to cultivate customer relationships as Bicycle Sharing is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 Bicycle Sharing has relatively successful track record of launching new products.
High cash cycle compare to competitors
Bicycle Sharing 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program, it seems that the employees of Bicycle Sharing 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.
Increasing silos among functional specialists
– The organizational structure of Bicycle Sharing is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bicycle Sharing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bicycle Sharing to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Bicycle Sharing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program, in the dynamic environment Bicycle Sharing has struggled to respond to the nimble upstart competition. Bicycle Sharing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Bicycle Sharing 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. Bicycle Sharing 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bicycle Sharing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program, is just above the industry average. Bicycle Sharing 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.
Opportunities On Two Wheels in Paris: The Velib' Bicycle-Sharing Program | 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program are -
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. Bicycle Sharing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Bicycle Sharing has opened avenues for new revenue streams for the organization in the industry. This can help Bicycle Sharing to build a more holistic ecosystem as suggested in the On Two Wheels in Paris: The Velib' Bicycle-Sharing Program case study. Bicycle Sharing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Bicycle Sharing 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.
Loyalty marketing
– Bicycle Sharing 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.
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. Bicycle Sharing 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. Bicycle Sharing 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.
Leveraging digital technologies
– Bicycle Sharing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bicycle Sharing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bicycle Sharing can use these opportunities to build new business models that can help the communities that Bicycle Sharing operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Bicycle Sharing 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bicycle Sharing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Bicycle Sharing 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.
Building a culture of innovation
– managers at Bicycle Sharing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bicycle Sharing 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 Bicycle Sharing to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bicycle Sharing 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.
Threats On Two Wheels in Paris: The Velib' Bicycle-Sharing Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program, Bicycle Sharing 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 .
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. Bicycle Sharing needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Bicycle Sharing 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.
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 Bicycle Sharing business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bicycle Sharing 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program .
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.
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. Bicycle Sharing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Bicycle Sharing is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Bicycle Sharing 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.
Stagnating economy with rate increase
– Bicycle Sharing 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.
Increasing wage structure of Bicycle Sharing
– 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 Bicycle Sharing.
Regulatory challenges
– Bicycle Sharing 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.
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.
Weighted SWOT Analysis of On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 Bicycle Sharing needs to make to build a sustainable competitive advantage.