Congestion Charging in London (A) The Western Extension 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 (A) The Western Extension
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 (A) The Western Extension" 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 (A) The Western Extension 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 (A) The Western Extension casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Congestion Charging in London (A) The Western Extension
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Congestion Charging in London (A) The Western Extension 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 (A) The Western Extension can be done for the following purposes –
1. Strategic planning using facts provided in Congestion Charging in London (A) The Western Extension 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 (A) The Western Extension | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Charging Congestion in Congestion Charging in London (A) The Western Extension Harvard Business Review case study are -
Innovation driven organization
– Charging Congestion is one of the most innovative firm in sector. Manager in Congestion Charging in London (A) The Western Extension Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 (A) The Western Extension 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 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.
Effective Research and Development (R&D)
– Charging Congestion 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 Congestion Charging in London (A) The Western Extension - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Congestion Charging in London (A) The Western Extension 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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Congestion Charging in London (A) The Western Extension 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.
Analytics focus
– Charging Congestion 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 Jose Gomez-Ibanez 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.
High switching costs
– The high switching costs that Charging Congestion 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Charging Congestion in the sector have low bargaining power. Congestion Charging in London (A) The Western Extension has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Charging Congestion to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Congestion Charging in London (A) The Western Extension | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Congestion Charging in London (A) The Western Extension are -
Aligning sales with marketing
– It come across in the case study Congestion Charging in London (A) The Western Extension 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 Congestion Charging in London (A) The Western Extension can leverage the sales team experience to cultivate customer relationships as Charging Congestion is planning to shift buying processes online.
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 (A) The Western Extension, 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 operating costs
– Compare to the competitors, firm in the HBR case study Congestion Charging in London (A) The Western Extension 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Charging Congestion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Congestion Charging in London (A) The Western Extension 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 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Congestion Charging in London (A) The Western Extension 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 Charging Congestion has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Congestion Charging in London (A) The Western Extension 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.
Slow decision making process
– As mentioned earlier in the report, Charging Congestion 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. Charging Congestion 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.
Low market penetration in new markets
– Outside its home market of Charging Congestion, firm in the HBR case study Congestion Charging in London (A) The Western Extension needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Opportunities Congestion Charging in London (A) The Western Extension | 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 (A) The Western Extension are -
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.
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 (A) The Western Extension case study. Charging Congestion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Charging Congestion 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, Congestion Charging in London (A) The Western Extension, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Charging Congestion 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. Charging Congestion 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.
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 (A) The Western Extension - 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.
Developing new processes and practices
– Charging Congestion 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.
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 Charging Congestion 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.
Leveraging digital technologies
– Charging Congestion 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Charging Congestion 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.
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.
Threats Congestion Charging in London (A) The Western Extension 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 (A) The Western Extension 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
– 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.
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.
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.
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.
Environmental challenges
– Charging Congestion 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. Charging Congestion can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Charging Congestion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Charging Congestion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
Weighted SWOT Analysis of Congestion Charging in London (A) The Western Extension 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 (A) The Western Extension 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 (A) The Western Extension 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 (A) The Western Extension 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 (A) The Western Extension 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.