Lac-Megantic Train Derailment: Putting Out the Fires (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lac-Megantic Train Derailment: Putting Out the Fires (A)
In the early morning of Saturday, July 6, 2013, the chairman of the Montreal, Maine & Atlantic Railway Limited faced a catastrophic situation when a company train carrying crude oil derailed in the small town of Lac-MA?gantic, Quebec, Canada, causing a series of explosions that decimated the downtown core. Emergency crews fought to put out fires and search for survivors; residents were relocated to a local school to escape the noxious fumes, but the death toll and number of missing continued to rise. In the days that followed, as the provincial police and federal agencies began to investigate and suggested they might lay charges of criminal negligence, the company, which had no permanent public relations staff, needed to devise a communication strategy to reassure various stakeholders who were looking for answers as to why the derailment occurred, who would be held accountable and ultimately what action would be taken in the aftermath of such a deadly event. Also available is the supplement case 9B13M136.
Swot Analysis of "Lac-Megantic Train Derailment: Putting Out the Fires (A)" written by Jana Seijts, Paul Bigus includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Derailment Lac facing as an external strategic factors. Some of the topics covered in Lac-Megantic Train Derailment: Putting Out the Fires (A) case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Lac-Megantic Train Derailment: Putting Out the Fires (A) casestudy better are - – increasing commodity prices, technology disruption, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
geopolitical disruptions, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Lac-Megantic Train Derailment: Putting Out the Fires (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lac-Megantic Train Derailment: Putting Out the Fires (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Derailment Lac, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Derailment Lac 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) can be done for the following purposes –
1. Strategic planning using facts provided in Lac-Megantic Train Derailment: Putting Out the Fires (A) case study
2. Improving business portfolio management of Derailment Lac
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 Derailment Lac
Strengths Lac-Megantic Train Derailment: Putting Out the Fires (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Derailment Lac in Lac-Megantic Train Derailment: Putting Out the Fires (A) Harvard Business Review case study are -
Learning organization
- Derailment Lac 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 Derailment Lac is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lac-Megantic Train Derailment: Putting Out the Fires (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Derailment Lac 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 Derailment Lac in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Derailment Lac 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.
High brand equity
– Derailment Lac has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Derailment Lac to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Derailment Lac 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Derailment Lac digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Derailment Lac 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.
Training and development
– Derailment Lac has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Lac-Megantic Train Derailment: Putting Out the Fires (A) 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.
Highly skilled collaborators
– Derailment Lac 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Derailment Lac is one of the leading recruiters in the industry. Managers in the Lac-Megantic Train Derailment: Putting Out the Fires (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Derailment Lac 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
– Derailment Lac has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Derailment Lac 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.
Low bargaining power of suppliers
– Suppliers of Derailment Lac in the sector have low bargaining power. Lac-Megantic Train Derailment: Putting Out the Fires (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Derailment Lac to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Lac-Megantic Train Derailment: Putting Out the Fires (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lac-Megantic Train Derailment: Putting Out the Fires (A) are -
Interest costs
– Compare to the competition, Derailment Lac has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Derailment Lac 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Derailment Lac 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.
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 Derailment Lac supply chain. Even after few cautionary changes mentioned in the HBR case study - Lac-Megantic Train Derailment: Putting Out the Fires (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Derailment Lac vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lac-Megantic Train Derailment: Putting Out the Fires (A), in the dynamic environment Derailment Lac has struggled to respond to the nimble upstart competition. Derailment Lac has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Jana Seijts, Paul Bigus suggests that, Derailment Lac 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
– Derailment Lac 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Derailment Lac has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Derailment Lac, firm in the HBR case study Lac-Megantic Train Derailment: Putting Out the Fires (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Lac-Megantic Train Derailment: Putting Out the Fires (A), 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 Lac-Megantic Train Derailment: Putting Out the Fires (A), is just above the industry average. Derailment Lac 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) | 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) 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. Derailment Lac 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 Derailment Lac can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Derailment Lac 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 Derailment Lac to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Derailment Lac can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Derailment Lac in the consumer business. Now Derailment Lac can target international markets with far fewer capital restrictions requirements than the existing system.
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 Derailment Lac 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Derailment Lac 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.
Building a culture of innovation
– managers at Derailment Lac 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.
Using analytics as competitive advantage
– Derailment Lac 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Derailment Lac 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 Derailment Lac to increase its market reach. Derailment Lac 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Derailment Lac can use these opportunities to build new business models that can help the communities that Derailment Lac operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Derailment Lac 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.
Buying journey improvements
– Derailment Lac can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lac-Megantic Train Derailment: Putting Out the Fires (A) 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.
Threats Lac-Megantic Train Derailment: Putting Out the Fires (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lac-Megantic Train Derailment: Putting Out the Fires (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Derailment Lac 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lac-Megantic Train Derailment: Putting Out the Fires (A), Derailment Lac 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 .
Consumer confidence and its impact on Derailment Lac 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.
Shortening product life cycle
– it is one of the major threat that Derailment Lac is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Derailment Lac in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Derailment Lac 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. Derailment Lac 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. Derailment Lac can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Derailment Lac 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.
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 Derailment Lac.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Derailment Lac 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) .
Regulatory challenges
– Derailment Lac 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.
Weighted SWOT Analysis of Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Lac-Megantic Train Derailment: Putting Out the Fires (A) 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 Derailment Lac needs to make to build a sustainable competitive advantage.
