The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel

This sequel accompanies Case Number 2047.0. Designed for a course in public finance or in transportation, this case describes the financial crisis that, in 2013, loomed over the Southeastern Pennsylvania Transportation Authority (SEPTA), the transit system serving Philadelphia and four surrounding counties. The difficulties were predominantly in the system's long-inadequate capital budget, which funded maintenance, repair, and replacement costs for the aging legacy system, but these problems were severe enough that they were threatening day-to-day operations. SEPTA had been forced to delay needed reinvestment in the system for so many years that, absent significant new funding, the SEPTA board and general manager warned that they would be forced to shrink its system dramatically over the next 10 years, reducing service in the city of Philadelphia and nearly eliminating suburban commuter rail service. To ground the discussion, the case provides political and structural background about SEPTA, alongside the recent financial history of both operating and capital budgets, allowing students to understand the nature of the funding difficulties that had historically beset the authority. The case also provides enough information on transit finance to support a more general conversation. Case exhibits include demographic and commuting data for the five counties served by SEPTA; fare and subsidy information by mode of transport; fare elasticity by mode of transport; sources of subsidy in both operating and capital budgets; information about the tax burden in Pennsylvania; the projected consequences of abolishing SEPTA for commuting costs, jobs, and property values; and pros and cons of using different kinds of state funding to finance transit. A brief 2-page sequel describes how proponents were eventually able to win legislative approval for additional funding, and what the legislature ultimately chose as its revenue source. Case number 2047.1

Authors :: Jose Gomez-Ibanez, Jay K. Rosengard, Pamela Varley

Topics :: Finance & Accounting

Tags :: Policy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel" written by Jose Gomez-Ibanez, Jay K. Rosengard, Pamela Varley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Septa Transit facing as an external strategic factors. Some of the topics covered in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel case study are - Strategic Management Strategies, Policy and Finance & Accounting.

Some of the macro environment factors that can be used to understand the The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing energy prices, cloud computing is disrupting traditional business models, geopolitical disruptions, etc

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Introduction to SWOT Analysis of The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Septa Transit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Septa Transit 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel can be done for the following purposes –
1. Strategic planning using facts provided in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel case study
2. Improving business portfolio management of Septa Transit
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Septa Transit

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Strengths The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Septa Transit in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel Harvard Business Review case study are -

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Septa Transit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Septa Transit 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.

Training and development

– Septa Transit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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.

Successful track record of launching new products

– Septa Transit has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Septa Transit 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.

Learning organization

- Septa Transit 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 Septa Transit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Septa Transit in the sector have low bargaining power. The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Septa Transit to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of Septa Transit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Finance & Accounting industry

– The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel firm has clearly differentiated products in the market place. This has enabled Septa Transit to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Septa Transit to invest into research and development (R&D) and innovation.

High brand equity

– Septa Transit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Septa Transit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Effective Research and Development (R&D)

– Septa Transit 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

– Septa Transit 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– Septa Transit 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 Jose Gomez-Ibanez, Jay K. Rosengard, Pamela Varley 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.

Strong track record of project management

– Septa Transit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel are -

Skills based hiring

– The stress on hiring functional specialists at Septa Transit 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel, it seems that the employees of Septa Transit 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.

Products dominated business model

– Even though Septa Transit has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel should strive to include more intangible value offerings along with its core products and services.

Slow decision making process

– As mentioned earlier in the report, Septa Transit has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Septa Transit even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Low market penetration in new markets

– Outside its home market of Septa Transit, firm in the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Increasing silos among functional specialists

– The organizational structure of Septa Transit is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Septa Transit needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Septa Transit to focus more on services rather than just following the product oriented approach.

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 Septa Transit supply chain. Even after few cautionary changes mentioned in the HBR case study - The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Septa Transit vulnerable to further global disruptions in South East Asia.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 Septa Transit has relatively successful track record of launching new products.

High cash cycle compare to competitors

Septa Transit 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.

Capital Spending Reduction

– Even during the low interest decade, Septa Transit 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.

Aligning sales with marketing

– It come across in the case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel can leverage the sales team experience to cultivate customer relationships as Septa Transit is planning to shift buying processes online.

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Opportunities The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel | 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel are -

Better consumer reach

– The expansion of the 5G network will help Septa Transit to increase its market reach. Septa Transit 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.

Learning at scale

– Online learning technologies has now opened space for Septa Transit to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Low interest rates

– Even though inflation is raising its head in most developed economies, Septa Transit 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.

Manufacturing automation

– Septa Transit can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.

Creating value in data economy

– The success of analytics program of Septa Transit has opened avenues for new revenue streams for the organization in the industry. This can help Septa Transit to build a more holistic ecosystem as suggested in the The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel case study. Septa Transit can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Leveraging digital technologies

– Septa Transit 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.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Septa Transit 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. Septa Transit 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.

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 Septa Transit 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Septa Transit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Septa Transit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Septa Transit can use these opportunities to build new business models that can help the communities that Septa Transit operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.

Loyalty marketing

– Septa Transit 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.

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. Septa Transit can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Septa Transit 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel .

Consumer confidence and its impact on Septa Transit 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.

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.

Regulatory challenges

– Septa Transit 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 Finance & Accounting industry regulations.

Shortening product life cycle

– it is one of the major threat that Septa Transit is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Septa Transit in the Finance & Accounting industry. The Finance & Accounting 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.

Technology acceleration in Forth Industrial Revolution

– Septa Transit has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Septa Transit needs to keep up with the evolution of technology in the Finance & Accounting 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.

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 Septa Transit in the Finance & Accounting sector and impact the bottomline 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. Septa Transit 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.

Environmental challenges

– Septa Transit 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. Septa Transit can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel, Septa Transit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .

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. Septa Transit needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Increasing wage structure of Septa Transit

– 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 Septa Transit.

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Weighted SWOT Analysis of The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Sequel 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 Septa Transit needs to make to build a sustainable competitive advantage.

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