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 - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, there is backlash against globalization, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, increasing household debt because of falling income levels, 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 -
Sustainable margins compare to other players in Leadership & Managing People industry
– Communauto: A big idea for a big market firm has clearly differentiated products in the market place. This has enabled Communauto Carsharing to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Communauto Carsharing to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
High switching costs
– The high switching costs that Communauto Carsharing 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.
Low bargaining power of suppliers
– Suppliers of Communauto Carsharing in the sector have low bargaining power. Communauto: A big idea for a big market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Communauto Carsharing to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
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.
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 -
Interest costs
– Compare to the competition, Communauto Carsharing 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Communauto: A big idea for a big market, it seems that the employees of Communauto Carsharing 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 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.
Low market penetration in new markets
– Outside its home market of Communauto Carsharing, firm in the HBR case study Communauto: A big idea for a big market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Communauto Carsharing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Communauto: A big idea for a big market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 operating costs
– Compare to the competitors, firm in the HBR case study Communauto: A big idea for a big market 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 Communauto Carsharing 's lucrative customers.
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.
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.
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.
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.
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 -
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. Communauto Carsharing 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. Communauto Carsharing 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.
Loyalty marketing
– Communauto Carsharing 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 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.
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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Communauto Carsharing 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Communauto Carsharing is facing challenges because of the dominance of functional experts in the organization. Communauto: A big idea for a big market case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Communauto Carsharing 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 Communauto: A big idea for a big market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Communauto Carsharing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
Regulatory challenges
– Communauto Carsharing 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.
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.
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. Communauto Carsharing needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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.
Stagnating economy with rate increase
– Communauto Carsharing 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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Communauto: A big idea for a big market, Communauto Carsharing 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 .
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 Communauto Carsharing in the Leadership & Managing People sector and impact the bottomline of the organization.
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 .
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.