Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management
Established in 1938, Highly Confident Transportation ("HCT") is a leading third-party logistics ("3PL") company in Taiwan. Originally a trucking and en-route transportation company serving domestic customers, HCT has transformed into a company providing integrated logistics services to global customers. Throughout its history, the company has prospered despite fierce competition, economic hard times and a rapidly changing market environment. HCT now competes against both domestic and foreign players. Despite these challenges, Chen Rong-chuan, chief operating officer of HCT, sees immense opportunities in the trend since the 1990s of outsourcing logistics functions to professional logistics companies such as HCT. In order to increase profits for the company, he has pushed for innovation and a service-oriented approach to be the future directions for HCT and has implemented a complete cultural change throughout the company. He has stressed the vital role of information technology throughout HCT's development into a leading 3PL company that offers logistics solutions both within Taiwan and around the world. This case can be used as a teaching tool for logistics or supply chain management courses.
Swot Analysis of "Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management" written by Isabella Chan, James Lin, Benjamin Yen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hct Logistics facing as an external strategic factors. Some of the topics covered in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management case study are - Strategic Management Strategies, IT, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, there is backlash against globalization,
increasing household debt because of falling income levels, geopolitical disruptions, etc
Introduction to SWOT Analysis of Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hct Logistics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hct Logistics 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management can be done for the following purposes –
1. Strategic planning using facts provided in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management case study
2. Improving business portfolio management of Hct Logistics
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 Hct Logistics
Strengths Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hct Logistics in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management Harvard Business Review case study are -
Diverse revenue streams
– Hct Logistics is present in almost all the verticals within the industry. This has provided firm in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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
– Hct Logistics is one of the most innovative firm in sector. Manager in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Hct Logistics 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Hct Logistics 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Hct Logistics in the sector have low bargaining power. Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hct Logistics to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hct Logistics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hct Logistics 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.
Strong track record of project management
– Hct Logistics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Hct Logistics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hct Logistics 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management firm has clearly differentiated products in the market place. This has enabled Hct Logistics to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hct Logistics to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Hct Logistics 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.
Training and development
– Hct Logistics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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.
Ability to lead change in Strategy & Execution field
– Hct Logistics 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 Hct Logistics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management are -
Low market penetration in new markets
– Outside its home market of Hct Logistics, firm in the HBR case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Hct Logistics has relatively successful track record of launching new products.
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 Hct Logistics supply chain. Even after few cautionary changes mentioned in the HBR case study - Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hct Logistics vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hct Logistics 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.
Slow decision making process
– As mentioned earlier in the report, Hct Logistics 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. Hct Logistics 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management, is just above the industry average. Hct Logistics needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Hct Logistics 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management, in the dynamic environment Hct Logistics has struggled to respond to the nimble upstart competition. Hct Logistics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Hct Logistics 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hct Logistics needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hct Logistics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management | 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management are -
Developing new processes and practices
– Hct Logistics 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.
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. Hct Logistics 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. Hct Logistics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hct Logistics 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, Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hct Logistics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Hct Logistics can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hct Logistics can use these opportunities to build new business models that can help the communities that Hct Logistics operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Hct Logistics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Hct Logistics in the consumer business. Now Hct Logistics can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Hct Logistics 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.
Using analytics as competitive advantage
– Hct Logistics 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hct Logistics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Hct Logistics 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.
Better consumer reach
– The expansion of the 5G network will help Hct Logistics to increase its market reach. Hct Logistics will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Hct Logistics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management are -
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 Hct Logistics in the Strategy & Execution sector and impact the bottomline 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. Hct Logistics needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Hct Logistics 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hct Logistics 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management, Hct Logistics 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hct Logistics 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management .
Regulatory challenges
– Hct Logistics 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.
Environmental challenges
– Hct Logistics 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. Hct Logistics can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hct Logistics with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hct Logistics.
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. Hct Logistics 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 Hct Logistics is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hct Logistics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Highly Confident Transportation: Dynamics of IT Application in Supply Chain Management 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 Hct Logistics needs to make to build a sustainable competitive advantage.
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