Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump
This case traces the evolution of Taiwan's high-speed railroad from project inception in the late 1980s until its financial problems in 2009 describing the planning efforts, ridership projections, financial plans and cost-benefit analysis involved in the project, as well as the contracting process for the project. This project was one of the largest infrastructure projects in the world and one of the largest infrastructure projects ever built, using a "public-private partnership" (PPP) - a method for infrastructure development where the private sector would build and operate a project for several decades and then transfer ownership to the government. However, in 2009, after only two years of operation, Taiwan High Speed Rail Corporation (THSRC), the private consortium responsible for building and operating the high-speed rail system, was in deep financial trouble due to low ridership and the worldwide economic crisis. Unable to pay back the principal on its bank loans, the President of THSRC requested a meeting with Taiwan's Minister of Transportation and Communications asking to hand the railroad over to the government to run. THSRC requested that compensation be set by an independent third party, as provided for in the event of a government takeover in the government's original contract with the company. Readers are left with the question of what Taiwan's Minister of Transportation and Communications should do in response to THSRC's request. The case can be used in class discussions on the management of public-private partnerships, government procurement/contracting, and on decision-making. HKS Case Number 1910.0
Swot Analysis of "Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump" written by Chung-Yuang Jan, Steve Kelman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Taiwan's Thsrc facing as an external strategic factors. Some of the topics covered in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump case study are - Strategic Management Strategies, Economy, Financial management, Government, Human resource management, International business, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump casestudy better are - – wage bills are increasing, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, technology disruption,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taiwan's Thsrc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taiwan's Thsrc 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump can be done for the following purposes –
1. Strategic planning using facts provided in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump case study
2. Improving business portfolio management of Taiwan's Thsrc
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 Taiwan's Thsrc
Strengths Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taiwan's Thsrc in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Taiwan's Thsrc 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.
Highly skilled collaborators
– Taiwan's Thsrc 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Taiwan's Thsrc 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Taiwan's Thsrc
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Taiwan's Thsrc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Taiwan's Thsrc is one of the most innovative firm in sector. Manager in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Taiwan's Thsrc is one of the leading recruiters in the industry. Managers in the Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Taiwan's Thsrc is present in almost all the verticals within the industry. This has provided firm in Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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.
High brand equity
– Taiwan's Thsrc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Taiwan's Thsrc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump firm has clearly differentiated products in the market place. This has enabled Taiwan's Thsrc to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Taiwan's Thsrc to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Taiwan's Thsrc 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 Taiwan's Thsrc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Taiwan's Thsrc in the sector have low bargaining power. Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taiwan's Thsrc to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump are -
Slow to strategic competitive environment developments
– As Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump HBR case study mentions - Taiwan's Thsrc 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, is just above the industry average. Taiwan's Thsrc 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.
Products dominated business model
– Even though Taiwan's Thsrc 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 - Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's Thsrc 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, in the dynamic environment Taiwan's Thsrc has struggled to respond to the nimble upstart competition. Taiwan's Thsrc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Taiwan's Thsrc 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.
No frontier risks strategy
– After analyzing the HBR case study Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, 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.
High cash cycle compare to competitors
Taiwan's Thsrc 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.
Need for greater diversity
– Taiwan's Thsrc 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 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 Taiwan's Thsrc supply chain. Even after few cautionary changes mentioned in the HBR case study - Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taiwan's Thsrc vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Taiwan's Thsrc 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump | 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump are -
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 Taiwan's Thsrc in the consumer business. Now Taiwan's Thsrc can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Taiwan's Thsrc 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, Taiwan's Thsrc can use these opportunities to build new business models that can help the communities that Taiwan's Thsrc operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Taiwan's Thsrc 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.
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. Taiwan's Thsrc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Taiwan's Thsrc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Taiwan's Thsrc can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Taiwan's Thsrc 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 Taiwan's Thsrc to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Taiwan's Thsrc 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 Taiwan's Thsrc 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.
Manufacturing automation
– Taiwan's Thsrc 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
– Taiwan's Thsrc 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taiwan's Thsrc 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, Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump are -
Increasing wage structure of Taiwan's Thsrc
– 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 Taiwan's Thsrc.
Technology acceleration in Forth Industrial Revolution
– Taiwan's Thsrc has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Taiwan's Thsrc 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.
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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump, Taiwan's Thsrc 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 Taiwan's Thsrc 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
– Taiwan's Thsrc 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Taiwan's Thsrc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Taiwan's Thsrc can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Taiwan's Thsrc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Taiwan's Thsrc 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 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. Taiwan's Thsrc needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Taiwan's Thsrc is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taiwan's Thsrc 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump .
Weighted SWOT Analysis of Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's High-Speed Rail: A Public-Private Partnership Hits a Speed Bump 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 Taiwan's Thsrc needs to make to build a sustainable competitive advantage.