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 - – challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, wage bills are increasing, 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 -
Ability to lead change in Strategy & Execution field
– Bicycle Sharing 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 Bicycle Sharing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– On Two Wheels in Paris: The Velib' Bicycle-Sharing Program firm has clearly differentiated products in the market place. This has enabled Bicycle Sharing to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bicycle Sharing to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Bicycle Sharing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bicycle Sharing 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.
Ability to recruit top talent
– Bicycle Sharing is one of the leading recruiters in the industry. Managers in the On Two Wheels in Paris: The Velib' Bicycle-Sharing Program are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
Highly skilled collaborators
– Bicycle Sharing 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 On Two Wheels in Paris: The Velib' Bicycle-Sharing Program HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Innovation driven organization
– Bicycle Sharing is one of the most innovative firm in sector. Manager in On Two Wheels in Paris: The Velib' Bicycle-Sharing Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Bicycle Sharing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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 Bicycle Sharing 's lucrative customers.
Lack of clear differentiation of Bicycle Sharing products
– To increase the profitability and margins on the products, Bicycle Sharing needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Peter A. Coles, Elena Corsi, Vincent Dessain suggests that, Bicycle Sharing is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Bicycle Sharing has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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.
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.
Products dominated business model
– Even though Bicycle Sharing 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 - On Two Wheels in Paris: The Velib' Bicycle-Sharing Program should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Bicycle Sharing 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bicycle Sharing 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.
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 -
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bicycle Sharing is facing challenges because of the dominance of functional experts in the organization. On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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.
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.
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.
Buying journey improvements
– Bicycle Sharing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. On Two Wheels in Paris: The Velib' Bicycle-Sharing Program 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.
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.
Better consumer reach
– The expansion of the 5G network will help Bicycle Sharing to increase its market reach. Bicycle Sharing will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help 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.
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 Bicycle Sharing in the consumer business. Now Bicycle Sharing can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bicycle Sharing 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 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 -
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 Bicycle Sharing.
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 .
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 Bicycle Sharing in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bicycle Sharing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 Bicycle Sharing 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.
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.
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 acceleration in Forth Industrial Revolution
– Bicycle Sharing has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bicycle Sharing 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.
Environmental challenges
– Bicycle Sharing 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. Bicycle Sharing can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.