Pricing Carbon: The Birth of British Columbia's Carbon Tax SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pricing Carbon: The Birth of British Columbia's Carbon Tax
In 2008, British Columbia became one of the few jurisdictions in the world to successfully implement a comprehensive carbon tax. The architect of the tax, Premier Gordon Campbell, championed the broad-based carbon tax that applied to nearly all fossil fuels and made it "revenue neutral." Every dollar raised from the tax would be returned to BC residents and businesses in the form of personal income and corporate tax cuts. Campbell was an unlikely proponent of the carbon tax. As the leader of the traditionally conservative BC Liberal Party, he had cut taxes in the past, but now he had reason to believe a revenue neutral carbon tax could be a winner for both the environment and the economy. But with elections just months away and growing public distrust of the tax, combined with a noisy campaign against the tax mounted by the opposition New Democratic Party, the tax's fate, and that of Campbell's political career was far from certain. This case provides an insider's account of how the carbon tax was designed, with the strong role Premier Gordon Campbell played in its creation. It also explores political and other challenges the government faced when designing and implementing the tax.
Swot Analysis of "Pricing Carbon: The Birth of British Columbia's Carbon Tax" written by Henry Lee, Anjani Datla includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax Carbon facing as an external strategic factors. Some of the topics covered in Pricing Carbon: The Birth of British Columbia's Carbon Tax case study are - Strategic Management Strategies, Sustainability and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Pricing Carbon: The Birth of British Columbia's Carbon Tax casestudy better are - – supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing energy prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Pricing Carbon: The Birth of British Columbia's Carbon Tax
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pricing Carbon: The Birth of British Columbia's Carbon Tax case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax Carbon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax Carbon 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax can be done for the following purposes –
1. Strategic planning using facts provided in Pricing Carbon: The Birth of British Columbia's Carbon Tax case study
2. Improving business portfolio management of Tax Carbon
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 Tax Carbon
Strengths Pricing Carbon: The Birth of British Columbia's Carbon Tax | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax Carbon in Pricing Carbon: The Birth of British Columbia's Carbon Tax Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Tax Carbon in the sector have low bargaining power. Pricing Carbon: The Birth of British Columbia's Carbon Tax has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tax Carbon to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Tax Carbon 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.
High switching costs
– The high switching costs that Tax Carbon 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.
Ability to lead change in Leadership & Managing People field
– Tax Carbon is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Tax Carbon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Tax Carbon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Tax Carbon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tax Carbon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Tax Carbon 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Tax Carbon 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 Tax Carbon is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pricing Carbon: The Birth of British Columbia's Carbon Tax Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Tax Carbon is present in almost all the verticals within the industry. This has provided firm in Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Tax Carbon 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 Henry Lee, Anjani Datla 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.
Organizational Resilience of Tax Carbon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tax Carbon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Pricing Carbon: The Birth of British Columbia's Carbon Tax | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pricing Carbon: The Birth of British Columbia's Carbon Tax are -
High bargaining power of channel partners
– Because of the regulatory requirements, Henry Lee, Anjani Datla suggests that, Tax Carbon 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.
No frontier risks strategy
– After analyzing the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tax Carbon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pricing Carbon: The Birth of British Columbia's Carbon Tax can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Tax Carbon 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Tax Carbon, firm in the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Tax Carbon 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 - Pricing Carbon: The Birth of British Columbia's Carbon Tax should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax, it seems that the employees of Tax Carbon 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.
Increasing silos among functional specialists
– The organizational structure of Tax Carbon is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Tax Carbon needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tax Carbon to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax can leverage the sales team experience to cultivate customer relationships as Tax Carbon is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Tax Carbon needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Tax Carbon 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.
Opportunities Pricing Carbon: The Birth of British Columbia's Carbon Tax | 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tax Carbon 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 Tax Carbon to hire the very best people irrespective of their geographical location.
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. Tax Carbon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tax Carbon can use these opportunities to build new business models that can help the communities that Tax Carbon operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Tax Carbon 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tax Carbon 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.
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. Tax Carbon can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Tax Carbon 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tax Carbon 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 Tax Carbon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tax Carbon 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. Tax Carbon 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 Tax Carbon 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, Tax Carbon 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.
Manufacturing automation
– Tax Carbon 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.
Learning at scale
– Online learning technologies has now opened space for Tax Carbon 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.
Threats Pricing Carbon: The Birth of British Columbia's Carbon Tax External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax are -
Stagnating economy with rate increase
– Tax Carbon 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tax Carbon 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, Tax Carbon 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax .
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 Tax Carbon business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Tax Carbon
– 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 Tax Carbon.
Shortening product life cycle
– it is one of the major threat that Tax Carbon is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Tax Carbon 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. Tax Carbon can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Pricing Carbon: The Birth of British Columbia's Carbon Tax, Tax Carbon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
High dependence on third party suppliers
– Tax Carbon 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.
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. Tax Carbon 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.
Consumer confidence and its impact on Tax Carbon 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.
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 Tax Carbon.
Weighted SWOT Analysis of Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax 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 Tax Carbon needs to make to build a sustainable competitive advantage.
