Logistics Service Providers in Internet Supply Chains SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Logistics Service Providers in Internet Supply Chains
Logistics services and their providers are helping intermediaries add value to Internet supply chains in ways that are not always immediately obvious. Thus, it is not surprising that there is confusion among academics and practitioners about how best to extract value from such services and providers. Reports the results of a study of the role and value of logistics services and their providers. Reveals that Internet sellers establish relationships with logistics service providers in order to extract value from the providers' network of logistical resources and better fill their customers' orders. Internet sellers establish these relationships to lower the costs they would incur if they attempted to carry out the logistics services internally. They also seek such providers in order to access strong networks that bundle many complementary logistics services among Internet sellers, their customers, and their vendors.
Swot Analysis of "Logistics Service Providers in Internet Supply Chains" written by Elliot Rabinovich, A. Michael Knemeyer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Providers Logistics facing as an external strategic factors. Some of the topics covered in Logistics Service Providers in Internet Supply Chains case study are - Strategic Management Strategies, Internet, Networking, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Logistics Service Providers in Internet Supply Chains casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Logistics Service Providers in Internet Supply Chains
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Logistics Service Providers in Internet Supply Chains case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Providers Logistics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Providers 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 Logistics Service Providers in Internet Supply Chains can be done for the following purposes –
1. Strategic planning using facts provided in Logistics Service Providers in Internet Supply Chains case study
2. Improving business portfolio management of Providers Logistics
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Providers Logistics
Strengths Logistics Service Providers in Internet Supply Chains | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Providers Logistics in Logistics Service Providers in Internet Supply Chains Harvard Business Review case study are -
High brand equity
– Providers Logistics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Providers Logistics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Providers 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.
Low bargaining power of suppliers
– Suppliers of Providers Logistics in the sector have low bargaining power. Logistics Service Providers in Internet Supply Chains has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Providers Logistics to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Providers Logistics 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.
Training and development
– Providers Logistics has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Logistics Service Providers in Internet Supply Chains 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.
Learning organization
- Providers Logistics 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 Providers Logistics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Logistics Service Providers in Internet Supply Chains Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Providers 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 Logistics Service Providers in Internet Supply Chains HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Providers Logistics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Providers Logistics 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 Technology & Operations industry
– Logistics Service Providers in Internet Supply Chains firm has clearly differentiated products in the market place. This has enabled Providers Logistics to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Providers Logistics to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Providers Logistics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Providers 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.
Analytics focus
– Providers Logistics 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 Elliot Rabinovich, A. Michael Knemeyer 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Providers Logistics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Providers 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.
Weaknesses Logistics Service Providers in Internet Supply Chains | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Logistics Service Providers in Internet Supply Chains are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Providers Logistics is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Logistics Service Providers in Internet Supply Chains can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Providers Logistics has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Logistics Service Providers in Internet Supply Chains should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Providers Logistics 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Elliot Rabinovich, A. Michael Knemeyer suggests that, Providers Logistics 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.
Skills based hiring
– The stress on hiring functional specialists at Providers Logistics 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.
High cash cycle compare to competitors
Providers 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.
Interest costs
– Compare to the competition, Providers 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Logistics Service Providers in Internet Supply Chains, is just above the industry average. Providers 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.
Low market penetration in new markets
– Outside its home market of Providers Logistics, firm in the HBR case study Logistics Service Providers in Internet Supply Chains needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Logistics Service Providers in Internet Supply Chains, in the dynamic environment Providers Logistics has struggled to respond to the nimble upstart competition. Providers Logistics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Providers Logistics supply chain. Even after few cautionary changes mentioned in the HBR case study - Logistics Service Providers in Internet Supply Chains, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Providers Logistics vulnerable to further global disruptions in South East Asia.
Opportunities Logistics Service Providers in Internet Supply Chains | 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 Logistics Service Providers in Internet Supply Chains are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Providers Logistics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Providers Logistics is facing challenges because of the dominance of functional experts in the organization. Logistics Service Providers in Internet Supply Chains 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 Providers Logistics 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 Technology & Operations segment.
Using analytics as competitive advantage
– Providers 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 Logistics Service Providers in Internet Supply Chains - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Providers Logistics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Providers Logistics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Providers Logistics can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Providers Logistics 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 Providers Logistics to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Providers Logistics has opened avenues for new revenue streams for the organization in the industry. This can help Providers Logistics to build a more holistic ecosystem as suggested in the Logistics Service Providers in Internet Supply Chains case study. Providers Logistics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Providers Logistics can develop new processes and procedures in Technology & Operations 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.
Leveraging digital technologies
– Providers 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Providers Logistics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Providers Logistics can use these opportunities to build new business models that can help the communities that Providers Logistics operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Providers Logistics 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.
Threats Logistics Service Providers in Internet Supply Chains External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Logistics Service Providers in Internet Supply Chains are -
Stagnating economy with rate increase
– Providers 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.
Regulatory challenges
– Providers 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 Technology & Operations industry regulations.
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. Providers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Providers 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 Logistics Service Providers in Internet Supply Chains .
High dependence on third party suppliers
– Providers Logistics 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.
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 Providers Logistics.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Logistics Service Providers in Internet Supply Chains, Providers 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 Technology & Operations .
Technology acceleration in Forth Industrial Revolution
– Providers Logistics has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Providers Logistics needs to keep up with the evolution of technology in the Technology & Operations 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.
Shortening product life cycle
– it is one of the major threat that Providers Logistics is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Providers Logistics needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Providers Logistics business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Providers Logistics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Providers Logistics 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.
Weighted SWOT Analysis of Logistics Service Providers in Internet Supply Chains 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 Logistics Service Providers in Internet Supply Chains 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 Logistics Service Providers in Internet Supply Chains 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 Logistics Service Providers in Internet Supply Chains 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 Logistics Service Providers in Internet Supply Chains 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 Providers Logistics needs to make to build a sustainable competitive advantage.
