Seeking Differentiation: Taxi Branding in Hong Kong SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Seeking Differentiation: Taxi Branding in Hong Kong
Investigates whether taxi drivers in Hong Kong will differentiate their services. Bounded by fixed fares and license quotas set by the government, the taxi industry finds it hard to compete either on price or service. The problem in Hong Kong is that most of the taxis are found at taxi stands/ranks or on the street. Price and quality competition at taxi stands and ranks is effectively prohibited either through regulations or enforced customs, which require that passengers employ the first taxi in the queue. There are also informational problems with passengers hailing on the street and, thus, they are unlikely to turn away the first taxi that comes to them as they do not know when the next taxi will arrive. Identifies different modes of competition for taxis. The findings provide a factual base for policy discussions on raising the quality of taxi services.
Authors :: Yue-Chim Richard Wong, Ka-Fu Wong, Alexandra Yiu, Carola Ramon-Berjano
Swot Analysis of "Seeking Differentiation: Taxi Branding in Hong Kong" written by Yue-Chim Richard Wong, Ka-Fu Wong, Alexandra Yiu, Carola Ramon-Berjano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Taxi Taxis facing as an external strategic factors. Some of the topics covered in Seeking Differentiation: Taxi Branding in Hong Kong case study are - Strategic Management Strategies, Pricing, Product development, Regulation and Technology & Operations.
Some of the macro environment factors that can be used to understand the Seeking Differentiation: Taxi Branding in Hong Kong casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, wage bills are increasing, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Seeking Differentiation: Taxi Branding in Hong Kong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Seeking Differentiation: Taxi Branding in Hong Kong case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taxi Taxis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taxi Taxis 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 Seeking Differentiation: Taxi Branding in Hong Kong can be done for the following purposes –
1. Strategic planning using facts provided in Seeking Differentiation: Taxi Branding in Hong Kong case study
2. Improving business portfolio management of Taxi Taxis
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 Taxi Taxis
Strengths Seeking Differentiation: Taxi Branding in Hong Kong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taxi Taxis in Seeking Differentiation: Taxi Branding in Hong Kong Harvard Business Review case study are -
Learning organization
- Taxi Taxis 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 Taxi Taxis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Seeking Differentiation: Taxi Branding in Hong Kong Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Taxi Taxis is one of the leading recruiters in the industry. Managers in the Seeking Differentiation: Taxi Branding in Hong Kong 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 Technology & Operations segment
- digital transformation varies from industry to industry. For Taxi Taxis digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Taxi Taxis 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.
Ability to lead change in Technology & Operations field
– Taxi Taxis 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 Taxi Taxis in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Taxi Taxis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Seeking Differentiation: Taxi Branding in Hong Kong 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.
Cross disciplinary teams
– Horizontal connected teams at the Taxi Taxis 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.
Sustainable margins compare to other players in Technology & Operations industry
– Seeking Differentiation: Taxi Branding in Hong Kong firm has clearly differentiated products in the market place. This has enabled Taxi Taxis to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Taxi Taxis to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Taxi Taxis in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Taxi Taxis is one of the most innovative firm in sector. Manager in Seeking Differentiation: Taxi Branding in Hong Kong Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Taxi Taxis 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.
Strong track record of project management
– Taxi Taxis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Taxi Taxis 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 Seeking Differentiation: Taxi Branding in Hong Kong - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Seeking Differentiation: Taxi Branding in Hong Kong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seeking Differentiation: Taxi Branding in Hong Kong are -
Lack of clear differentiation of Taxi Taxis products
– To increase the profitability and margins on the products, Taxi Taxis needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Taxi Taxis, firm in the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Taxi Taxis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Seeking Differentiation: Taxi Branding in Hong Kong can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong, is just above the industry average. Taxi Taxis needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong 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 Taxi Taxis 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Yue-Chim Richard Wong, Ka-Fu Wong, Alexandra Yiu, Carola Ramon-Berjano suggests that, Taxi Taxis 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Seeking Differentiation: Taxi Branding in Hong Kong 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 Taxi Taxis has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Seeking Differentiation: Taxi Branding in Hong Kong HBR case study mentions - Taxi Taxis 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong, it seems that the employees of Taxi Taxis 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.
Need for greater diversity
– Taxi Taxis 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.
Increasing silos among functional specialists
– The organizational structure of Taxi Taxis is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Taxi Taxis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Taxi Taxis to focus more on services rather than just following the product oriented approach.
Opportunities Seeking Differentiation: Taxi Branding in Hong Kong | 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 Seeking Differentiation: Taxi Branding in Hong Kong are -
Developing new processes and practices
– Taxi Taxis 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Taxi Taxis can use these opportunities to build new business models that can help the communities that Taxi Taxis operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Taxi Taxis 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.
Manufacturing automation
– Taxi Taxis 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.
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 Taxi Taxis in the consumer business. Now Taxi Taxis can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Taxi Taxis has opened avenues for new revenue streams for the organization in the industry. This can help Taxi Taxis to build a more holistic ecosystem as suggested in the Seeking Differentiation: Taxi Branding in Hong Kong case study. Taxi Taxis can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Taxi Taxis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Taxi Taxis is facing challenges because of the dominance of functional experts in the organization. Seeking Differentiation: Taxi Branding in Hong Kong 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.
Buying journey improvements
– Taxi Taxis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Seeking Differentiation: Taxi Branding in Hong Kong 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Taxi Taxis 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.
Building a culture of innovation
– managers at Taxi Taxis 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Taxi Taxis can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taxi Taxis 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, Seeking Differentiation: Taxi Branding in Hong Kong, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Seeking Differentiation: Taxi Branding in Hong Kong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong 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.
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. Taxi Taxis 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 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. Taxi Taxis needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Taxi Taxis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Taxi Taxis.
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 Taxi Taxis in the Technology & Operations sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Taxi Taxis 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 wage structure of Taxi Taxis
– 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 Taxi Taxis.
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. Taxi Taxis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Taxi Taxis 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.
Technology acceleration in Forth Industrial Revolution
– Taxi Taxis has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Taxi Taxis 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taxi Taxis 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 Seeking Differentiation: Taxi Branding in Hong Kong .
Weighted SWOT Analysis of Seeking Differentiation: Taxi Branding in Hong Kong 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 Seeking Differentiation: Taxi Branding in Hong Kong 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 Seeking Differentiation: Taxi Branding in Hong Kong 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 Seeking Differentiation: Taxi Branding in Hong Kong 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 Seeking Differentiation: Taxi Branding in Hong Kong 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 Taxi Taxis needs to make to build a sustainable competitive advantage.