The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis 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

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 2047.0

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" 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 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 casestudy better are - – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing commodity prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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

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 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 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 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 | 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 Harvard Business Review case study are -

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 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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.

Operational resilience

– The operational resilience strategy in the The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis 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.

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.

Innovation driven organization

– Septa Transit is one of the most innovative firm in sector. Manager in The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

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 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.

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 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

High switching costs

– The high switching costs that Septa Transit 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 Finance & Accounting industry

– The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis 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.

Cross disciplinary teams

– Horizontal connected teams at the Septa Transit 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.

Organizational Resilience of Septa Transit

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Septa Transit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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

Lack of clear differentiation of Septa Transit products

– To increase the profitability and margins on the products, Septa Transit needs to provide more differentiated products than what it is currently offering in the marketplace.

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 should strive to include more intangible value offerings along with its core products and services.

No frontier risks strategy

– After analyzing the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis, is just above the industry average. Septa Transit 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.

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 operating costs

– Compare to the competitors, firm in the HBR case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis 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 Septa Transit 's lucrative customers.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Septa Transit is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

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

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, 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.

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.

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 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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

Redefining models of collaboration and team work

– As explained in the weaknesses section, Septa Transit is facing challenges because of the dominance of functional experts in the organization. The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis 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.

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.

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.

Developing new processes and practices

– Septa Transit can develop new processes and procedures in Finance & Accounting 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.

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.

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 case study. Septa Transit can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.

Using analytics as competitive advantage

– Septa Transit 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 The Quest for Sustainable Public Transit Funding: SEPTA's 2013 Capital Budget Crisis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Septa Transit to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Septa Transit in the consumer business. Now Septa Transit can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Septa Transit 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 Septa Transit to hire the very best people irrespective of their geographical location.

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

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, 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 dependence on third party suppliers

– Septa Transit high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Increasing wage structure of 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.

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 .

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.

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 Septa Transit business can come under increasing regulations regarding data privacy, data security, 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.

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.

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.

Easy access to finance

– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Septa Transit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

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.

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.

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