Case Study Description of Trucost: Valuing Corporate Environmental Impacts
To maximize their effectiveness, color cases should be printed in color.Trucost provided corporate environmental performance data and analysis to institutional investors and corporate managers, but after operating for a decade had yet to achieve profitability. Trucost was struggling to effectively differentiate its high quality products from its lower-cost competitors, and needed to develop a strategy to educate the marketplace and pursue new distribution channels. Increased investor interest in environmental issues-and an ever growing number of corporate environmental ranking-led to a proliferation of competitors to Trucost, and an industry shakeout were predicted. How should Trucost compete?
Authors :: Michael W. Toffel, Stephanie van Sice
Topics :: Technology & Operations
Tags :: Marketing, Social enterprise, Social responsibility, Supply chain, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Trucost: Valuing Corporate Environmental Impacts" written by Michael W. Toffel, Stephanie van Sice includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Trucost Environmental facing as an external strategic factors. Some of the topics covered in Trucost: Valuing Corporate Environmental Impacts case study are - Strategic Management Strategies, Marketing, Social enterprise, Social responsibility, Supply chain, Sustainability and Technology & Operations.
Some of the macro environment factors that can be used to understand the Trucost: Valuing Corporate Environmental Impacts casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, 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, etc
Introduction to SWOT Analysis of Trucost: Valuing Corporate Environmental Impacts
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Trucost: Valuing Corporate Environmental Impacts case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Trucost Environmental, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Trucost Environmental 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 Trucost: Valuing Corporate Environmental Impacts can be done for the following purposes –
1. Strategic planning using facts provided in Trucost: Valuing Corporate Environmental Impacts case study
2. Improving business portfolio management of Trucost Environmental
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Trucost Environmental
Strengths Trucost: Valuing Corporate Environmental Impacts | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Trucost Environmental in Trucost: Valuing Corporate Environmental Impacts Harvard Business Review case study are -
Organizational Resilience of Trucost Environmental
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Trucost Environmental does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Trucost Environmental is one of the leading recruiters in the industry. Managers in the Trucost: Valuing Corporate Environmental Impacts 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)
– Trucost Environmental 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 Trucost: Valuing Corporate Environmental Impacts - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Trucost Environmental has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Trucost Environmental to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Trucost Environmental 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
– Trucost Environmental has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Trucost Environmental 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.
Operational resilience
– The operational resilience strategy in the Trucost: Valuing Corporate Environmental Impacts 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.
Sustainable margins compare to other players in Technology & Operations industry
– Trucost: Valuing Corporate Environmental Impacts firm has clearly differentiated products in the market place. This has enabled Trucost Environmental to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Trucost Environmental to invest into research and development (R&D) and innovation.
Innovation driven organization
– Trucost Environmental is one of the most innovative firm in sector. Manager in Trucost: Valuing Corporate Environmental Impacts Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Trucost Environmental has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Trucost: Valuing Corporate Environmental Impacts 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.
Superior customer experience
– The customer experience strategy of Trucost Environmental in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Trucost Environmental 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 Trucost Environmental is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Trucost: Valuing Corporate Environmental Impacts Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Trucost: Valuing Corporate Environmental Impacts | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Trucost: Valuing Corporate Environmental Impacts are -
Slow to strategic competitive environment developments
– As Trucost: Valuing Corporate Environmental Impacts HBR case study mentions - Trucost Environmental 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.
High cash cycle compare to competitors
Trucost Environmental 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.
Skills based hiring
– The stress on hiring functional specialists at Trucost Environmental 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Trucost Environmental 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.
Need for greater diversity
– Trucost Environmental 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.
Interest costs
– Compare to the competition, Trucost Environmental 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Trucost Environmental is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Trucost: Valuing Corporate Environmental Impacts can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Trucost: Valuing Corporate Environmental Impacts 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 Trucost Environmental 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Trucost: Valuing Corporate Environmental Impacts 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 Trucost: Valuing Corporate Environmental Impacts can leverage the sales team experience to cultivate customer relationships as Trucost Environmental is planning to shift buying processes online.
Products dominated business model
– Even though Trucost Environmental 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 - Trucost: Valuing Corporate Environmental Impacts should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Trucost: Valuing Corporate Environmental Impacts, in the dynamic environment Trucost Environmental has struggled to respond to the nimble upstart competition. Trucost Environmental has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Trucost: Valuing Corporate Environmental Impacts | 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 Trucost: Valuing Corporate Environmental Impacts are -
Better consumer reach
– The expansion of the 5G network will help Trucost Environmental to increase its market reach. Trucost Environmental 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, Trucost Environmental can use these opportunities to build new business models that can help the communities that Trucost Environmental operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Creating value in data economy
– The success of analytics program of Trucost Environmental has opened avenues for new revenue streams for the organization in the industry. This can help Trucost Environmental to build a more holistic ecosystem as suggested in the Trucost: Valuing Corporate Environmental Impacts case study. Trucost Environmental can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Trucost Environmental can develop new processes and procedures in Technology & Operations 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.
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 Trucost Environmental in the consumer business. Now Trucost Environmental can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Trucost Environmental 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Trucost Environmental can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Trucost Environmental can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Trucost Environmental 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.
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 Trucost Environmental 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.
Loyalty marketing
– Trucost Environmental 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.
Using analytics as competitive advantage
– Trucost Environmental 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 Trucost: Valuing Corporate Environmental Impacts - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Trucost Environmental to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Trucost Environmental can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Threats Trucost: Valuing Corporate Environmental Impacts External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Trucost: Valuing Corporate Environmental Impacts are -
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Trucost Environmental can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Trucost Environmental needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Trucost Environmental in the Technology & Operations sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Trucost Environmental 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.
Stagnating economy with rate increase
– Trucost Environmental can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Trucost Environmental 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 Trucost: Valuing Corporate Environmental Impacts .
Shortening product life cycle
– it is one of the major threat that Trucost Environmental is facing in Technology & Operations 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.
Environmental challenges
– Trucost Environmental 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. Trucost Environmental can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Trucost Environmental
– 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 Trucost Environmental.
Technology acceleration in Forth Industrial Revolution
– Trucost Environmental has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Trucost Environmental needs to keep up with the evolution of technology in the Technology & Operations 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Trucost: Valuing Corporate Environmental Impacts, Trucost Environmental may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Weighted SWOT Analysis of Trucost: Valuing Corporate Environmental Impacts 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 Trucost: Valuing Corporate Environmental Impacts 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 Trucost: Valuing Corporate Environmental Impacts 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 Trucost: Valuing Corporate Environmental Impacts 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 Trucost: Valuing Corporate Environmental Impacts 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 Trucost Environmental needs to make to build a sustainable competitive advantage.
