Case Study Description of Erie Thames Powerlines: The Hybrid Truck Decision
Erie Thames Powerlines, an electricity distributor in Southwestern Ontario, needed to determine the suitability of the company acquiring a hybrid truck as opposed to a conventional diesel utility truck. As of early July 2016, the truck suppliers (for both hybrid and diesel trucks) and the internal accounting department had provided substantial information with which to conduct a thorough analysis. The company also wanted to include some qualitative aspects, such as the reduction of noise pollution and the positive contributions of hybrid trucks both to the company's image and to its promotion of energy efficiency. The firm needed to build an appropriate business analysis that included both qualitative and quantitative elements to support a recommendation to the utility company's board of directors in August 2016.
Swot Analysis of "Erie Thames Powerlines: The Hybrid Truck Decision" written by Stephan Vachon, Ryan Mallany includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Truck Hybrid facing as an external strategic factors. Some of the topics covered in Erie Thames Powerlines: The Hybrid Truck Decision case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Erie Thames Powerlines: The Hybrid Truck Decision casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, technology disruption,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Erie Thames Powerlines: The Hybrid Truck Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Erie Thames Powerlines: The Hybrid Truck Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Truck Hybrid, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Truck Hybrid 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 Erie Thames Powerlines: The Hybrid Truck Decision can be done for the following purposes –
1. Strategic planning using facts provided in Erie Thames Powerlines: The Hybrid Truck Decision case study
2. Improving business portfolio management of Truck Hybrid
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Truck Hybrid
Strengths Erie Thames Powerlines: The Hybrid Truck Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Truck Hybrid in Erie Thames Powerlines: The Hybrid Truck Decision Harvard Business Review case study are -
Ability to recruit top talent
– Truck Hybrid is one of the leading recruiters in the industry. Managers in the Erie Thames Powerlines: The Hybrid Truck Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Truck Hybrid digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Truck Hybrid 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 Truck Hybrid
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Truck Hybrid does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Finance & Accounting industry
– Erie Thames Powerlines: The Hybrid Truck Decision firm has clearly differentiated products in the market place. This has enabled Truck Hybrid to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Truck Hybrid to invest into research and development (R&D) and innovation.
Innovation driven organization
– Truck Hybrid is one of the most innovative firm in sector. Manager in Erie Thames Powerlines: The Hybrid Truck Decision Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Truck Hybrid 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 Stephan Vachon, Ryan Mallany 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.
Low bargaining power of suppliers
– Suppliers of Truck Hybrid in the sector have low bargaining power. Erie Thames Powerlines: The Hybrid Truck Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Truck Hybrid to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Erie Thames Powerlines: The Hybrid Truck Decision 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 switching costs
– The high switching costs that Truck Hybrid 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
– Truck Hybrid has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Truck Hybrid to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Truck Hybrid 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 Truck Hybrid in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Truck Hybrid in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Erie Thames Powerlines: The Hybrid Truck Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Erie Thames Powerlines: The Hybrid Truck Decision are -
Aligning sales with marketing
– It come across in the case study Erie Thames Powerlines: The Hybrid Truck Decision 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 Erie Thames Powerlines: The Hybrid Truck Decision can leverage the sales team experience to cultivate customer relationships as Truck Hybrid is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Erie Thames Powerlines: The Hybrid Truck Decision, in the dynamic environment Truck Hybrid has struggled to respond to the nimble upstart competition. Truck Hybrid has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Erie Thames Powerlines: The Hybrid Truck Decision, it seems that the employees of Truck Hybrid 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Erie Thames Powerlines: The Hybrid Truck Decision 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 Truck Hybrid 's lucrative customers.
High cash cycle compare to competitors
Truck Hybrid 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.
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 Truck Hybrid supply chain. Even after few cautionary changes mentioned in the HBR case study - Erie Thames Powerlines: The Hybrid Truck Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Truck Hybrid vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Truck Hybrid 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 bargaining power of channel partners
– Because of the regulatory requirements, Stephan Vachon, Ryan Mallany suggests that, Truck Hybrid 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.
Skills based hiring
– The stress on hiring functional specialists at Truck Hybrid 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.
Interest costs
– Compare to the competition, Truck Hybrid 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.
Slow decision making process
– As mentioned earlier in the report, Truck Hybrid 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. Truck Hybrid 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.
Opportunities Erie Thames Powerlines: The Hybrid Truck Decision | 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 Erie Thames Powerlines: The Hybrid Truck Decision are -
Creating value in data economy
– The success of analytics program of Truck Hybrid has opened avenues for new revenue streams for the organization in the industry. This can help Truck Hybrid to build a more holistic ecosystem as suggested in the Erie Thames Powerlines: The Hybrid Truck Decision case study. Truck Hybrid can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Truck Hybrid 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. Truck Hybrid 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Truck Hybrid 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
– Truck Hybrid can develop new processes and procedures in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Truck Hybrid 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.
Loyalty marketing
– Truck Hybrid 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.
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 Truck Hybrid 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Truck Hybrid is facing challenges because of the dominance of functional experts in the organization. Erie Thames Powerlines: The Hybrid Truck Decision 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.
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 Truck Hybrid in the consumer business. Now Truck Hybrid can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Truck Hybrid can use these opportunities to build new business models that can help the communities that Truck Hybrid operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Truck Hybrid 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, Erie Thames Powerlines: The Hybrid Truck Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Truck Hybrid 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.
Threats Erie Thames Powerlines: The Hybrid Truck Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Erie Thames Powerlines: The Hybrid Truck Decision are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Truck Hybrid in the Finance & Accounting industry. The Finance & Accounting 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. Truck Hybrid needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Erie Thames Powerlines: The Hybrid Truck Decision, Truck Hybrid may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Truck Hybrid with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Truck Hybrid 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 Erie Thames Powerlines: The Hybrid Truck Decision .
Stagnating economy with rate increase
– Truck Hybrid 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.
Consumer confidence and its impact on Truck Hybrid 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.
Increasing wage structure of Truck Hybrid
– 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 Truck Hybrid.
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 Truck Hybrid.
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 Truck Hybrid in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– Truck Hybrid 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 Finance & Accounting industry regulations.
Environmental challenges
– Truck Hybrid 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. Truck Hybrid can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Technology acceleration in Forth Industrial Revolution
– Truck Hybrid has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Truck Hybrid needs to keep up with the evolution of technology in the Finance & Accounting 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.
Weighted SWOT Analysis of Erie Thames Powerlines: The Hybrid Truck Decision 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 Erie Thames Powerlines: The Hybrid Truck Decision 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 Erie Thames Powerlines: The Hybrid Truck Decision 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 Erie Thames Powerlines: The Hybrid Truck Decision 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 Erie Thames Powerlines: The Hybrid Truck Decision 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 Truck Hybrid needs to make to build a sustainable competitive advantage.
