Wheels Group: Evolution of a Third-Party Logistics Service Provider SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wheels Group: Evolution of a Third-Party Logistics Service Provider
The president of Wheels Group and the founder and major shareholder of the company are evaluating alternatives for doubling the company's revenues over the next five years. They must decide between two competing growth strategies: an asset-based growth strategy and a nonasset-based growth one. Complicating the decision is the fact that approximately 75% of the company's revenues are currently derived from nonasset-based activity. Students can explore issues associated with developing, evaluating, and implementing business strategy within the third-party logistics industry.
Swot Analysis of "Wheels Group: Evolution of a Third-Party Logistics Service Provider" written by P. Fraser Johnson, Michael Sartor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nonasset Wheels facing as an external strategic factors. Some of the topics covered in Wheels Group: Evolution of a Third-Party Logistics Service Provider case study are - Strategic Management Strategies, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Wheels Group: Evolution of a Third-Party Logistics Service Provider casestudy better are - – there is increasing trade war between United States & China, technology disruption, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing energy prices, 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%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Wheels Group: Evolution of a Third-Party Logistics Service Provider
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wheels Group: Evolution of a Third-Party Logistics Service Provider case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nonasset Wheels, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nonasset Wheels 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider can be done for the following purposes –
1. Strategic planning using facts provided in Wheels Group: Evolution of a Third-Party Logistics Service Provider case study
2. Improving business portfolio management of Nonasset Wheels
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nonasset Wheels
Strengths Wheels Group: Evolution of a Third-Party Logistics Service Provider | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nonasset Wheels in Wheels Group: Evolution of a Third-Party Logistics Service Provider Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Nonasset Wheels 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.
Organizational Resilience of Nonasset Wheels
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nonasset Wheels does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Nonasset Wheels 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 Nonasset Wheels is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wheels Group: Evolution of a Third-Party Logistics Service Provider Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Nonasset Wheels in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Nonasset Wheels has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nonasset Wheels 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.
Strong track record of project management
– Nonasset Wheels is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Nonasset Wheels has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nonasset Wheels to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Nonasset Wheels 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 P. Fraser Johnson, Michael Sartor 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.
Training and development
– Nonasset Wheels has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wheels Group: Evolution of a Third-Party Logistics Service Provider 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Wheels Group: Evolution of a Third-Party Logistics Service Provider firm has clearly differentiated products in the market place. This has enabled Nonasset Wheels to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Nonasset Wheels to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Nonasset Wheels 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Nonasset Wheels is present in almost all the verticals within the industry. This has provided firm in Wheels Group: Evolution of a Third-Party Logistics Service Provider case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Wheels Group: Evolution of a Third-Party Logistics Service Provider | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wheels Group: Evolution of a Third-Party Logistics Service Provider are -
Capital Spending Reduction
– Even during the low interest decade, Nonasset Wheels 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.
Interest costs
– Compare to the competition, Nonasset Wheels 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.
Low market penetration in new markets
– Outside its home market of Nonasset Wheels, firm in the HBR case study Wheels Group: Evolution of a Third-Party Logistics Service Provider needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Nonasset Wheels 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.
No frontier risks strategy
– After analyzing the HBR case study Wheels Group: Evolution of a Third-Party Logistics Service Provider, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson, Michael Sartor suggests that, Nonasset Wheels 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Nonasset Wheels has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Nonasset Wheels is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Nonasset Wheels needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nonasset Wheels to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wheels Group: Evolution of a Third-Party Logistics Service Provider, in the dynamic environment Nonasset Wheels has struggled to respond to the nimble upstart competition. Nonasset Wheels has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Nonasset Wheels 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.
Need for greater diversity
– Nonasset Wheels has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Wheels Group: Evolution of a Third-Party Logistics Service Provider | 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nonasset Wheels 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. Nonasset Wheels 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nonasset Wheels 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 Nonasset Wheels to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Nonasset Wheels can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wheels Group: Evolution of a Third-Party Logistics Service Provider 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nonasset Wheels in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Nonasset Wheels can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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 Nonasset Wheels 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.
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. Nonasset Wheels can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Nonasset Wheels 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nonasset Wheels to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Nonasset Wheels has opened avenues for new revenue streams for the organization in the industry. This can help Nonasset Wheels to build a more holistic ecosystem as suggested in the Wheels Group: Evolution of a Third-Party Logistics Service Provider case study. Nonasset Wheels can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nonasset Wheels is facing challenges because of the dominance of functional experts in the organization. Wheels Group: Evolution of a Third-Party Logistics Service Provider 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.
Building a culture of innovation
– managers at Nonasset Wheels 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 Strategy & Execution segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nonasset Wheels 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.
Developing new processes and practices
– Nonasset Wheels can develop new processes and procedures in Strategy & Execution 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.
Threats Wheels Group: Evolution of a Third-Party Logistics Service Provider External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wheels Group: Evolution of a Third-Party Logistics Service Provider are -
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. Nonasset Wheels 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.
Shortening product life cycle
– it is one of the major threat that Nonasset Wheels is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Nonasset Wheels 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. Nonasset Wheels can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Nonasset Wheels.
Increasing wage structure of Nonasset Wheels
– 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 Nonasset Wheels.
High dependence on third party suppliers
– Nonasset Wheels 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wheels Group: Evolution of a Third-Party Logistics Service Provider, Nonasset Wheels may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Consumer confidence and its impact on Nonasset Wheels 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.
Regulatory challenges
– Nonasset Wheels 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nonasset Wheels in the Strategy & Execution industry. The Strategy & Execution 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.
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 Nonasset Wheels business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Nonasset Wheels with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Wheels Group: Evolution of a Third-Party Logistics Service Provider 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 Nonasset Wheels needs to make to build a sustainable competitive advantage.