Case Study Description of Improving ComfortDelGro's Flagging Taxi Business
Sandy Sim is a senior consultant at Future Solutions, a strategy consulting firm. She was tasked by Comfort Del Gro (CDG), a multinational land transport company, to help revive their taxi business in Singapore. Companies like Grab, a regional third-party taxi-booking app, and Uber, a global transportation app, made use of technology to improve the booking of taxis and introduced private cars to meet the demand for taxis, especially at peak hours. Many customers found their services better and more convenient to use. Some taxi drivers prefer to use the Grab app for client bookings or drive private cars instead. What should Sim recommend for CDG to turn around its flagging fortunes in the taxi segment?
Swot Analysis of "Improving ComfortDelGro's Flagging Taxi Business" written by Kannan Srikanth, CW Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Taxi Cdg facing as an external strategic factors. Some of the topics covered in Improving ComfortDelGro's Flagging Taxi Business case study are - Strategic Management Strategies, Disruptive innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Improving ComfortDelGro's Flagging Taxi Business casestudy better are - – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is backlash against globalization, geopolitical disruptions,
increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Improving ComfortDelGro's Flagging Taxi Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Improving ComfortDelGro's Flagging Taxi Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taxi Cdg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taxi Cdg 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 Improving ComfortDelGro's Flagging Taxi Business can be done for the following purposes –
1. Strategic planning using facts provided in Improving ComfortDelGro's Flagging Taxi Business case study
2. Improving business portfolio management of Taxi Cdg
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Taxi Cdg
Strengths Improving ComfortDelGro's Flagging Taxi Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taxi Cdg in Improving ComfortDelGro's Flagging Taxi Business Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Taxi Cdg in the sector have low bargaining power. Improving ComfortDelGro's Flagging Taxi Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taxi Cdg to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Taxi Cdg is one of the leading recruiters in the industry. Managers in the Improving ComfortDelGro's Flagging Taxi Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Taxi Cdg is one of the most innovative firm in sector. Manager in Improving ComfortDelGro's Flagging Taxi Business Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Improving ComfortDelGro's Flagging Taxi Business 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.
Analytics focus
– Taxi Cdg 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 Kannan Srikanth, CW Chan 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.
Diverse revenue streams
– Taxi Cdg is present in almost all the verticals within the industry. This has provided firm in Improving ComfortDelGro's Flagging Taxi Business 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.
Training and development
– Taxi Cdg has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Improving ComfortDelGro's Flagging Taxi Business 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
– Taxi Cdg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Taxi Cdg 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.
Superior customer experience
– The customer experience strategy of Taxi Cdg in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Taxi Cdg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Taxi Cdg 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.
Learning organization
- Taxi Cdg 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 Cdg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Improving ComfortDelGro's Flagging Taxi Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Taxi Cdg
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Taxi Cdg does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Improving ComfortDelGro's Flagging Taxi Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Improving ComfortDelGro's Flagging Taxi Business are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Improving ComfortDelGro's Flagging Taxi Business, is just above the industry average. Taxi Cdg 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Improving ComfortDelGro's Flagging Taxi Business 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 Cdg has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Improving ComfortDelGro's Flagging Taxi Business 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 Improving ComfortDelGro's Flagging Taxi Business can leverage the sales team experience to cultivate customer relationships as Taxi Cdg is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Improving ComfortDelGro's Flagging Taxi Business, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 bargaining power of channel partners
– Because of the regulatory requirements, Kannan Srikanth, CW Chan suggests that, Taxi Cdg 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 Cdg supply chain. Even after few cautionary changes mentioned in the HBR case study - Improving ComfortDelGro's Flagging Taxi Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taxi Cdg vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Taxi Cdg, firm in the HBR case study Improving ComfortDelGro's Flagging Taxi Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Improving ComfortDelGro's Flagging Taxi Business, in the dynamic environment Taxi Cdg has struggled to respond to the nimble upstart competition. Taxi Cdg has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Taxi Cdg 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. Taxi Cdg 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Improving ComfortDelGro's Flagging Taxi Business, it seems that the employees of Taxi Cdg 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.
Capital Spending Reduction
– Even during the low interest decade, Taxi Cdg 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.
Opportunities Improving ComfortDelGro's Flagging Taxi Business | 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 Improving ComfortDelGro's Flagging Taxi Business are -
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 Cdg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Taxi Cdg can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Improving ComfortDelGro's Flagging Taxi Business 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.
Manufacturing automation
– Taxi Cdg can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Loyalty marketing
– Taxi Cdg 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Taxi Cdg 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 Taxi Cdg to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Taxi Cdg 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.
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 Cdg 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Taxi Cdg can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Taxi Cdg 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.
Using analytics as competitive advantage
– Taxi Cdg 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 Improving ComfortDelGro's Flagging Taxi Business - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Taxi Cdg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Taxi Cdg has opened avenues for new revenue streams for the organization in the industry. This can help Taxi Cdg to build a more holistic ecosystem as suggested in the Improving ComfortDelGro's Flagging Taxi Business case study. Taxi Cdg 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 Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Taxi Cdg 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 Cdg 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 Cdg 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, Improving ComfortDelGro's Flagging Taxi Business, 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 Improving ComfortDelGro's Flagging Taxi Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Improving ComfortDelGro's Flagging Taxi Business are -
Consumer confidence and its impact on Taxi Cdg 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.
High dependence on third party suppliers
– Taxi Cdg 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Improving ComfortDelGro's Flagging Taxi Business, Taxi Cdg may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Taxi Cdg has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Taxi Cdg needs to keep up with the evolution of technology in the Strategy & Execution 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 Taxi Cdg in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Taxi Cdg
– 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 Cdg.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Taxi Cdg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– Taxi Cdg 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 Cdg can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Taxi Cdg 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 Strategy & Execution industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Taxi Cdg with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Taxi Cdg 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.
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 Cdg.
Weighted SWOT Analysis of Improving ComfortDelGro's Flagging Taxi Business 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 Improving ComfortDelGro's Flagging Taxi Business 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 Improving ComfortDelGro's Flagging Taxi Business 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 Improving ComfortDelGro's Flagging Taxi Business 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 Improving ComfortDelGro's Flagging Taxi Business 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 Cdg needs to make to build a sustainable competitive advantage.
