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 - – increasing government debt because of Covid-19 spendings, there is backlash against globalization, technology disruption, wage bills are increasing, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, 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 -
Training and development
– Lpg Fuel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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.
Cross disciplinary teams
– Horizontal connected teams at the Lpg Fuel 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Lpg Fuel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lpg Fuel 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.
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.
Diverse revenue streams
– Lpg Fuel is present in almost all the verticals within the industry. This has provided firm in Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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.
Operational resilience
– The operational resilience strategy in the Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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.
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.
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.
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.
Highly skilled collaborators
– Lpg Fuel 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 Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
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.
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.
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.
Slow to strategic competitive environment developments
– As Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme HBR case study mentions - Lpg Fuel takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Lpg Fuel 's lucrative customers.
High cash cycle compare to competitors
Lpg Fuel 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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 Lpg Fuel has relatively successful track record of launching new products.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lpg Fuel is facing challenges because of the dominance of functional experts in the organization. Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lpg Fuel 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, Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lpg Fuel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lpg Fuel 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 Lpg Fuel to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lpg Fuel in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lpg Fuel 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. Lpg Fuel 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.
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.
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 -
Stagnating economy with rate increase
– Lpg Fuel 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.
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 .
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.
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 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cost for Cleaner Air: Hong Kong's LPG Vehicle Scheme, Lpg Fuel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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. Lpg Fuel needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Lpg Fuel 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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lpg Fuel in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.