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 - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, supply chains are disrupted by pandemic ,
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 -
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.
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.
Diverse revenue streams
– Trucost Environmental is present in almost all the verticals within the industry. This has provided firm in Trucost: Valuing Corporate Environmental Impacts 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.
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.
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.
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.
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.
Highly skilled collaborators
– Trucost Environmental 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 Trucost: Valuing Corporate Environmental Impacts HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Analytics focus
– Trucost Environmental 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 Michael W. Toffel, Stephanie van Sice 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.
High switching costs
– The high switching costs that Trucost Environmental 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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Trucost: Valuing Corporate Environmental Impacts 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 Trucost Environmental has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Trucost: Valuing Corporate Environmental Impacts, it seems that the employees of Trucost Environmental 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.
No frontier risks strategy
– After analyzing the HBR case study Trucost: Valuing Corporate Environmental Impacts, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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 bargaining power of channel partners
– Because of the regulatory requirements, Michael W. Toffel, Stephanie van Sice suggests that, Trucost Environmental 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
– 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.
Capital Spending Reduction
– Even during the low interest decade, Trucost Environmental 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.
Lack of clear differentiation of Trucost Environmental products
– To increase the profitability and margins on the products, Trucost Environmental needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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 -
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.
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.
Buying journey improvements
– Trucost Environmental can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Trucost: Valuing Corporate Environmental Impacts 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Trucost Environmental is facing challenges because of the dominance of functional experts in the organization. Trucost: Valuing Corporate Environmental Impacts 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Trucost Environmental 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 Trucost Environmental to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Trucost Environmental 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, Trucost: Valuing Corporate Environmental Impacts, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Trucost Environmental in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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.
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.
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.
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 -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Trucost Environmental will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Trucost Environmental in the Technology & Operations industry. The Technology & Operations 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.
Consumer confidence and its impact on Trucost Environmental 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.
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 .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Trucost Environmental business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Trucost Environmental with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.