Communauto: A big idea for a big market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Communauto: A big idea for a big market
This case examines Communauto, North America's first carsharing organization, which is based in Montreal, Quebec, Canada. The case focuses primarily on Communauto's CEO, Benoit Robert, as he builds on his success and ponders how to make carsharing even more widespread and environmentally impactful. Unlike many sustainability oriented cases which focus on translating a 'concept' into a viable enterprise or offering, this case focuses on an organization that is already established, is financially sound, and is attaining its environmental objectives. Students examine how the founder can address the inevitable tension between growing the business and pursuing his ambitious goal of meaningfully reducing the environmental impact of personal transportation. It illustrates a for-profit model of social entrepreneurship in a North American context, providing a contrasting focal point to the multitude of cases that depict not-for-profit social entrepreneurship initiatives in less developed countries.
Authors :: Raymond Paquin, Dror Etzion, James Povitz, Benjamin Gruber
Swot Analysis of "Communauto: A big idea for a big market" written by Raymond Paquin, Dror Etzion, James Povitz, Benjamin Gruber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Communauto Carsharing facing as an external strategic factors. Some of the topics covered in Communauto: A big idea for a big market case study are - Strategic Management Strategies, Social enterprise and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Communauto: A big idea for a big market casestudy better are - – increasing commodity prices, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Communauto: A big idea for a big market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Communauto: A big idea for a big market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Communauto Carsharing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Communauto Carsharing 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 Communauto: A big idea for a big market can be done for the following purposes –
1. Strategic planning using facts provided in Communauto: A big idea for a big market case study
2. Improving business portfolio management of Communauto Carsharing
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Communauto Carsharing
Strengths Communauto: A big idea for a big market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Communauto Carsharing in Communauto: A big idea for a big market Harvard Business Review case study are -
Effective Research and Development (R&D)
– Communauto Carsharing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Communauto: A big idea for a big market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Communauto Carsharing 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 Raymond Paquin, Dror Etzion, James Povitz, Benjamin Gruber 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
– Communauto Carsharing is present in almost all the verticals within the industry. This has provided firm in Communauto: A big idea for a big market 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.
Ability to recruit top talent
– Communauto Carsharing is one of the leading recruiters in the industry. Managers in the Communauto: A big idea for a big market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Communauto: A big idea for a big market 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.
High brand equity
– Communauto Carsharing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Communauto Carsharing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Communauto Carsharing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Communauto: A big idea for a big market 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.
Innovation driven organization
– Communauto Carsharing is one of the most innovative firm in sector. Manager in Communauto: A big idea for a big market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Communauto Carsharing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Communauto Carsharing 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.
Highly skilled collaborators
– Communauto Carsharing 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 Communauto: A big idea for a big market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Communauto Carsharing 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 Communauto Carsharing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Communauto: A big idea for a big market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Communauto: A big idea for a big market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Communauto: A big idea for a big market are -
High cash cycle compare to competitors
Communauto Carsharing 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.
Aligning sales with marketing
– It come across in the case study Communauto: A big idea for a big market 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 Communauto: A big idea for a big market can leverage the sales team experience to cultivate customer relationships as Communauto Carsharing is planning to shift buying processes online.
Lack of clear differentiation of Communauto Carsharing products
– To increase the profitability and margins on the products, Communauto Carsharing needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Communauto Carsharing 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Communauto: A big idea for a big market, is just above the industry average. Communauto Carsharing 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.
Slow decision making process
– As mentioned earlier in the report, Communauto Carsharing 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. Communauto Carsharing 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.
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 Communauto Carsharing supply chain. Even after few cautionary changes mentioned in the HBR case study - Communauto: A big idea for a big market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Communauto Carsharing vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Raymond Paquin, Dror Etzion, James Povitz, Benjamin Gruber suggests that, Communauto Carsharing 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.
Slow to strategic competitive environment developments
– As Communauto: A big idea for a big market HBR case study mentions - Communauto Carsharing 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.
Increasing silos among functional specialists
– The organizational structure of Communauto Carsharing is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Communauto Carsharing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Communauto Carsharing to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Communauto Carsharing 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 Communauto: A big idea for a big market | 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 Communauto: A big idea for a big market are -
Manufacturing automation
– Communauto Carsharing can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Communauto Carsharing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Communauto Carsharing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Communauto: A big idea for a big market 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.
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. Communauto Carsharing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Communauto Carsharing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Communauto Carsharing can use these opportunities to build new business models that can help the communities that Communauto Carsharing operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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 Communauto Carsharing in the consumer business. Now Communauto Carsharing can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Communauto Carsharing 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 Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Communauto Carsharing 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.
Creating value in data economy
– The success of analytics program of Communauto Carsharing has opened avenues for new revenue streams for the organization in the industry. This can help Communauto Carsharing to build a more holistic ecosystem as suggested in the Communauto: A big idea for a big market case study. Communauto Carsharing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Communauto Carsharing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Communauto Carsharing 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, Communauto: A big idea for a big market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Communauto Carsharing can develop new processes and procedures in Leadership & Managing People 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.
Threats Communauto: A big idea for a big market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Communauto: A big idea for a big market are -
Technology acceleration in Forth Industrial Revolution
– Communauto Carsharing has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Communauto Carsharing needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Communauto Carsharing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Communauto Carsharing 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 Communauto: A big idea for a big market .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Communauto Carsharing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Communauto Carsharing 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.
Environmental challenges
– Communauto Carsharing 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. Communauto Carsharing can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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 Communauto Carsharing business can come under increasing regulations regarding data privacy, data security, etc.
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. Communauto Carsharing 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.
Shortening product life cycle
– it is one of the major threat that Communauto Carsharing is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of Communauto Carsharing
– 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 Communauto Carsharing.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Communauto Carsharing in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Communauto Carsharing.
Weighted SWOT Analysis of Communauto: A big idea for a big market 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 Communauto: A big idea for a big market 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 Communauto: A big idea for a big market 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 Communauto: A big idea for a big market 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 Communauto: A big idea for a big market 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 Communauto Carsharing needs to make to build a sustainable competitive advantage.
