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 - – there is increasing trade war between United States & China, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, increasing energy prices, 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 -
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.
Cross disciplinary teams
– Horizontal connected teams at the Trucost Environmental 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.
Low bargaining power of suppliers
– Suppliers of Trucost Environmental in the sector have low bargaining power. Trucost: Valuing Corporate Environmental Impacts has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Trucost Environmental to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Technology & Operations field
– Trucost Environmental 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 Trucost Environmental in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
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.
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.
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 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.
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 Trucost Environmental supply chain. Even after few cautionary changes mentioned in the HBR case study - Trucost: Valuing Corporate Environmental Impacts, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Trucost Environmental vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Trucost Environmental, firm in the HBR case study Trucost: Valuing Corporate Environmental Impacts needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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 -
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.
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.
Building a culture of innovation
– managers at Trucost Environmental 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 Technology & Operations segment.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Trucost Environmental can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Trucost Environmental can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 -
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.
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.
Regulatory challenges
– Trucost Environmental 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 Technology & Operations industry regulations.
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.
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 .
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.
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.
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.
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.
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.
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.
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.
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.