Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme
Studies a Hong Kong government environmental mandate to replace the territory's diesel-powered taxicab fleet with liquefied petroleum gas (LPG)-powered vehicles. In order to encourage the transition, taxi owners were given cash grants to purchase new LPG vehicles and drivers were promised "cheap" fuel. In exchange for selling at or below capped prices, certain companies received "free" land to develop dedicated LPG filling stations. Other local filling stations sold LPG fuel alongside gasoline and diesel fuel, although at market prices. All stations in the territory were supplied by fuel imported from abroad.
Swot Analysis of "Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme" written by Chester Chan, Mark Stimson, Ka-Fu Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lpg Fuel facing as an external strategic factors. Some of the topics covered in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme case study are - Strategic Management Strategies, Pricing, Regulation, Social responsibility, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme casestudy better are - – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lpg Fuel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lpg Fuel 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme can be done for the following purposes –
1. Strategic planning using facts provided in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme case study
2. Improving business portfolio management of Lpg Fuel
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lpg Fuel
Strengths Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lpg Fuel in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme Harvard Business Review case study are -
Organizational Resilience of Lpg Fuel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Lpg Fuel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Lpg Fuel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Lpg Fuel is one of the leading recruiters in the industry. Managers in the Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Lpg Fuel 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
– Lpg Fuel 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 Chester Chan, Mark Stimson, Ka-Fu Wong 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.
Superior customer experience
– The customer experience strategy of Lpg Fuel 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
– Lpg Fuel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lpg Fuel 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme firm has clearly differentiated products in the market place. This has enabled Lpg Fuel to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Lpg Fuel to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Lpg Fuel in the sector have low bargaining power. Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lpg Fuel to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Lpg Fuel is one of the most innovative firm in sector. Manager in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Lpg Fuel 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 Lpg Fuel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Lpg Fuel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lpg Fuel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, it seems that the employees of Lpg Fuel 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 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 Lpg Fuel supply chain. Even after few cautionary changes mentioned in the HBR case study - Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lpg Fuel vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lpg Fuel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Lpg Fuel 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 - Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Lpg Fuel is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Lpg Fuel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lpg Fuel to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Skills based hiring
– The stress on hiring functional specialists at Lpg Fuel 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.
Slow decision making process
– As mentioned earlier in the report, Lpg Fuel 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. Lpg Fuel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, in the dynamic environment Lpg Fuel has struggled to respond to the nimble upstart competition. Lpg Fuel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Lpg Fuel 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, Chester Chan, Mark Stimson, Ka-Fu Wong suggests that, Lpg Fuel 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.
Opportunities Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme | 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme are -
Manufacturing automation
– Lpg Fuel can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lpg Fuel 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.
Leveraging digital technologies
– Lpg Fuel 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 Lpg Fuel has opened avenues for new revenue streams for the organization in the industry. This can help Lpg Fuel to build a more holistic ecosystem as suggested in the Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme case study. Lpg Fuel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lpg Fuel can use these opportunities to build new business models that can help the communities that Lpg Fuel operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. Lpg Fuel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Lpg Fuel 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.
Using analytics as competitive advantage
– Lpg Fuel 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lpg Fuel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Lpg Fuel 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 Innovation & Entrepreneurship segment.
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 Lpg Fuel in the consumer business. Now Lpg Fuel can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Lpg Fuel 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.
Learning at scale
– Online learning technologies has now opened space for Lpg Fuel 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Lpg Fuel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme are -
Shortening product life cycle
– it is one of the major threat that Lpg Fuel is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lpg Fuel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lpg Fuel 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme .
Environmental challenges
– Lpg Fuel 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. Lpg Fuel can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Lpg Fuel business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Lpg Fuel 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 Innovation & Entrepreneurship industry regulations.
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 Lpg Fuel in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Lpg Fuel has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Lpg Fuel needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Consumer confidence and its impact on Lpg Fuel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lpg Fuel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Lpg Fuel 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.
Increasing wage structure of Lpg Fuel
– 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 Lpg Fuel.
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 Lpg Fuel.
Weighted SWOT Analysis of Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Lpg Fuel needs to make to build a sustainable competitive advantage.
