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 - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, increasing government debt because of Covid-19 spendings, 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 -
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.
Low bargaining power of suppliers
– Suppliers of Taxi Taxis in the sector have low bargaining power. Seeking Differentiation: Taxi Branding in Hong Kong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taxi Taxis to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Successful track record of launching new products
– Taxi Taxis has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Taxi Taxis 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.
Organizational Resilience of Taxi Taxis
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Taxi Taxis does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Diverse revenue streams
– Taxi Taxis is present in almost all the verticals within the industry. This has provided firm in Seeking Differentiation: Taxi Branding in Hong Kong 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.
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.
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.
Analytics focus
– Taxi Taxis 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 Yue-Chim Richard Wong, Ka-Fu Wong, Alexandra Yiu, Carola Ramon-Berjano 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.
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.
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 -
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.
Interest costs
– Compare to the competition, Taxi Taxis 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 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Seeking Differentiation: Taxi Branding in Hong Kong, in the dynamic environment Taxi Taxis has struggled to respond to the nimble upstart competition. Taxi Taxis has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Seeking Differentiation: Taxi Branding in Hong Kong, 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 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Taxi Taxis 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.
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 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 Taxi Taxis supply chain. Even after few cautionary changes mentioned in the HBR case study - Seeking Differentiation: Taxi Branding in Hong Kong, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taxi Taxis vulnerable to further global disruptions in South East Asia.
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 -
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.
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. Taxi Taxis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Taxi Taxis 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.
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.
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.
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.
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.
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.
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.
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.
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. Taxi Taxis 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. Taxi Taxis 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.
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.
Better consumer reach
– The expansion of the 5G network will help Taxi Taxis to increase its market reach. Taxi Taxis 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.
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 -
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.
Environmental challenges
– Taxi Taxis 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. Taxi Taxis can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Taxi Taxis 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. Taxi Taxis needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Seeking Differentiation: Taxi Branding in Hong Kong, Taxi Taxis 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 Taxi Taxis business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Taxi Taxis 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.
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.
Shortening product life cycle
– it is one of the major threat that Taxi Taxis 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 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.
