Congestion Charging in London (B): The Economics of Charging SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Congestion Charging in London (B): The Economics of Charging
In July 2004, Ken Livingstone, the Mayor of Greater London, had to decide whether or not to expand the system of congestion charging he had implemented 17 months earlier. Skeptics had predicted fierce popular opposition or chaos from the original scheme, which required that cars and trucks pay a charge of A?5 (US$7.95) to enter an 8-square-mile area of Central London between the hours of 7:00 am and 6:30 pm, Monday through Friday. The critics were confounded, however, when the A?5 charge resulted in a substantial reduction in Central London congestion and the payment and enforcement mechanisms proved to be remarkably convenient and fair. The Mayor's proposal to extend the A?5 charge to a congested area immediately to the west seemed risky, however, since the technical and political problems of charging might grow disproportionately with the size of the charging zone. HKS Case Number 1788.0
Swot Analysis of "Congestion Charging in London (B): The Economics of Charging" written by Jose Gomez-Ibanez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Charging Congestion facing as an external strategic factors. Some of the topics covered in Congestion Charging in London (B): The Economics of Charging case study are - Strategic Management Strategies, Financial analysis, Innovation, Leadership, Policy, Project management, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Congestion Charging in London (B): The Economics of Charging casestudy better are - – geopolitical disruptions, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is backlash against globalization, cloud computing is disrupting traditional business models,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Congestion Charging in London (B): The Economics of Charging
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Congestion Charging in London (B): The Economics of Charging case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Charging Congestion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Charging Congestion 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 Congestion Charging in London (B): The Economics of Charging can be done for the following purposes –
1. Strategic planning using facts provided in Congestion Charging in London (B): The Economics of Charging case study
2. Improving business portfolio management of Charging Congestion
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 Charging Congestion
Strengths Congestion Charging in London (B): The Economics of Charging | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Charging Congestion in Congestion Charging in London (B): The Economics of Charging Harvard Business Review case study are -
Highly skilled collaborators
– Charging Congestion 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 Congestion Charging in London (B): The Economics of Charging HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Charging Congestion 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.
Superior customer experience
– The customer experience strategy of Charging Congestion in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Charging Congestion digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Charging Congestion 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
- Charging Congestion 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 Charging Congestion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Congestion Charging in London (B): The Economics of Charging Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Charging Congestion has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Congestion Charging in London (B): The Economics of Charging 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.
Operational resilience
– The operational resilience strategy in the Congestion Charging in London (B): The Economics of Charging 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Congestion Charging in London (B): The Economics of Charging firm has clearly differentiated products in the market place. This has enabled Charging Congestion to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Charging Congestion to invest into research and development (R&D) and innovation.
Organizational Resilience of Charging Congestion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Charging Congestion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Charging Congestion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Charging Congestion 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.
Innovation driven organization
– Charging Congestion is one of the most innovative firm in sector. Manager in Congestion Charging in London (B): The Economics of Charging Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Charging Congestion is present in almost all the verticals within the industry. This has provided firm in Congestion Charging in London (B): The Economics of Charging 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.
Weaknesses Congestion Charging in London (B): The Economics of Charging | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Congestion Charging in London (B): The Economics of Charging are -
Increasing silos among functional specialists
– The organizational structure of Charging Congestion is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Charging Congestion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Charging Congestion to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Congestion Charging in London (B): The Economics of Charging, it seems that the employees of Charging Congestion don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Charging Congestion 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 operating costs
– Compare to the competitors, firm in the HBR case study Congestion Charging in London (B): The Economics of Charging 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 Charging Congestion 's lucrative customers.
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 Charging Congestion supply chain. Even after few cautionary changes mentioned in the HBR case study - Congestion Charging in London (B): The Economics of Charging, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Charging Congestion vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Charging Congestion products
– To increase the profitability and margins on the products, Charging Congestion needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Charging Congestion has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Congestion Charging in London (B): The Economics of Charging HBR case study mentions - Charging Congestion 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.
Products dominated business model
– Even though Charging Congestion 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 - Congestion Charging in London (B): The Economics of Charging should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Congestion Charging in London (B): The Economics of Charging, is just above the industry average. Charging Congestion 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 bargaining power of channel partners
– Because of the regulatory requirements, Jose Gomez-Ibanez suggests that, Charging Congestion 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 Congestion Charging in London (B): The Economics of Charging | 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 Congestion Charging in London (B): The Economics of Charging 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. Charging Congestion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Charging Congestion in the consumer business. Now Charging Congestion can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Charging Congestion 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 Congestion Charging in London (B): The Economics of Charging - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Charging Congestion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Charging Congestion can use these opportunities to build new business models that can help the communities that Charging Congestion operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Manufacturing automation
– Charging Congestion 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.
Loyalty marketing
– Charging Congestion 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 Charging Congestion 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.
Building a culture of innovation
– managers at Charging Congestion 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.
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. Charging Congestion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Charging Congestion has opened avenues for new revenue streams for the organization in the industry. This can help Charging Congestion to build a more holistic ecosystem as suggested in the Congestion Charging in London (B): The Economics of Charging case study. Charging Congestion 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 Charging Congestion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Charging Congestion to increase its market reach. Charging Congestion will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Charging Congestion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Congestion Charging in London (B): The Economics of Charging 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.
Threats Congestion Charging in London (B): The Economics of Charging External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Congestion Charging in London (B): The Economics of Charging are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Charging Congestion 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 Congestion Charging in London (B): The Economics of Charging .
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 Charging Congestion in the Leadership & Managing People sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Charging Congestion 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.
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.
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.
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 Charging Congestion 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. Charging Congestion 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 Charging Congestion
– 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 Charging Congestion.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Charging Congestion 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.
Technology acceleration in Forth Industrial Revolution
– Charging Congestion has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Charging Congestion 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.
Regulatory challenges
– Charging Congestion 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 Leadership & Managing People industry regulations.
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. Charging Congestion needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Consumer confidence and its impact on Charging Congestion 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.
Weighted SWOT Analysis of Congestion Charging in London (B): The Economics of Charging 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 Congestion Charging in London (B): The Economics of Charging 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 Congestion Charging in London (B): The Economics of Charging 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 Congestion Charging in London (B): The Economics of Charging 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 Congestion Charging in London (B): The Economics of Charging 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 Charging Congestion needs to make to build a sustainable competitive advantage.
