Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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 (Sequel)
This sequel accompanies case KS1170. 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 (Sequel)" 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 (Sequel) 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 (Sequel) casestudy better are - – increasing energy prices, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, technology disruption, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel)
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 (Sequel) 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 (Sequel) can be done for the following purposes –
1. Strategic planning using facts provided in Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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 (Sequel) | 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 (Sequel) Harvard Business Review case study are -
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.
Effective Research and Development (R&D)
– Tax Carbon 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 Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Tax Carbon is one of the leading recruiters in the industry. Managers in the Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Strong track record of project management
– Tax Carbon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) firm has clearly differentiated products in the market place. This has enabled Tax Carbon to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Tax Carbon to invest into research and development (R&D) and innovation.
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.
Innovation driven organization
– Tax Carbon is one of the most innovative firm in sector. Manager in Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Tax Carbon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tax Carbon 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.
Operational resilience
– The operational resilience strategy in the Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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.
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 (Sequel) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) | 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 (Sequel) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel), 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.
Capital Spending Reduction
– Even during the low interest decade, Tax Carbon 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.
Skills based hiring
– The stress on hiring functional specialists at Tax Carbon 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 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 (Sequel) should strive to include more intangible value offerings along with its core products and services.
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 (Sequel) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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 Tax Carbon has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) HBR case study mentions - Tax Carbon 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.
Lack of clear differentiation of Tax Carbon products
– To increase the profitability and margins on the products, Tax Carbon needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
No frontier risks strategy
– After analyzing the HBR case study Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel), 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.
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 Tax Carbon supply chain. Even after few cautionary changes mentioned in the HBR case study - Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tax Carbon vulnerable to further global disruptions in South East Asia.
Opportunities Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) | 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 (Sequel) are -
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.
Buying journey improvements
– Tax Carbon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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.
Creating value in data economy
– The success of analytics program of Tax Carbon has opened avenues for new revenue streams for the organization in the industry. This can help Tax Carbon to build a more holistic ecosystem as suggested in the Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) case study. Tax Carbon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Tax Carbon 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.
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 Tax Carbon in the consumer business. Now Tax Carbon can target international markets with far fewer capital restrictions requirements than the existing system.
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 Tax Carbon 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.
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.
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 (Sequel) - 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.
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.
Leveraging digital technologies
– Tax Carbon 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.
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.
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.
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.
Threats Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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 (Sequel) are -
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.
Technology acceleration in Forth Industrial Revolution
– Tax Carbon has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Tax Carbon 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 Tax Carbon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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 Tax Carbon in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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.
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. Tax Carbon needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Tax Carbon 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tax Carbon 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.
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.
Weighted SWOT Analysis of Pricing Carbon: The Birth of British Columbia's Carbon Tax (Sequel) 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 (Sequel) 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 (Sequel) 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 (Sequel) 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 (Sequel) 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.
