Case Study Description of Transland Shipping: Dealing with Cross-Border Logistics Barrier
Hong Kong logistics companies are facing increased competition from the Chinese mainland operators, particularly in cross-border logistics business in the Pearl River Delta region. Examines the cost structure of Transland's (a Hong Kong-based third-party logistics operator) cross-border trucking operation, the inefficiencies captured in the logistics pipeline, and the cargo and sea trade challenges facing Hong Kong.
Authors :: Yew-Ming Chia, Kee-Hung Lai, Amy Lau, Paul Li
Swot Analysis of "Transland Shipping: Dealing with Cross-Border Logistics Barrier" written by Yew-Ming Chia, Kee-Hung Lai, Amy Lau, Paul Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Logistics Border facing as an external strategic factors. Some of the topics covered in Transland Shipping: Dealing with Cross-Border Logistics Barrier case study are - Strategic Management Strategies, Competition, Competitive strategy, Financial management, Productivity, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Transland Shipping: Dealing with Cross-Border Logistics Barrier casestudy better are - – increasing government debt because of Covid-19 spendings, technology disruption, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Transland Shipping: Dealing with Cross-Border Logistics Barrier
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transland Shipping: Dealing with Cross-Border Logistics Barrier case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Logistics Border, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Logistics Border 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier can be done for the following purposes –
1. Strategic planning using facts provided in Transland Shipping: Dealing with Cross-Border Logistics Barrier case study
2. Improving business portfolio management of Logistics Border
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 Logistics Border
Strengths Transland Shipping: Dealing with Cross-Border Logistics Barrier | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Logistics Border in Transland Shipping: Dealing with Cross-Border Logistics Barrier Harvard Business Review case study are -
Effective Research and Development (R&D)
– Logistics Border 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Logistics Border is one of the most innovative firm in sector. Manager in Transland Shipping: Dealing with Cross-Border Logistics Barrier Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Logistics Border is present in almost all the verticals within the industry. This has provided firm in Transland Shipping: Dealing with Cross-Border Logistics Barrier 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.
Highly skilled collaborators
– Logistics Border 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Logistics Border has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Logistics Border to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Logistics Border in the sector have low bargaining power. Transland Shipping: Dealing with Cross-Border Logistics Barrier has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Logistics Border to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– Transland Shipping: Dealing with Cross-Border Logistics Barrier firm has clearly differentiated products in the market place. This has enabled Logistics Border to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Logistics Border to invest into research and development (R&D) and innovation.
Analytics focus
– Logistics Border 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 Yew-Ming Chia, Kee-Hung Lai, Amy Lau, Paul Li 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.
Ability to recruit top talent
– Logistics Border is one of the leading recruiters in the industry. Managers in the Transland Shipping: Dealing with Cross-Border Logistics Barrier are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Logistics Border 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
– Logistics Border has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Logistics Border 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.
Organizational Resilience of Logistics Border
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Logistics Border does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Transland Shipping: Dealing with Cross-Border Logistics Barrier | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transland Shipping: Dealing with Cross-Border Logistics Barrier are -
Products dominated business model
– Even though Logistics Border 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 - Transland Shipping: Dealing with Cross-Border Logistics Barrier should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Logistics Border 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.
Slow to strategic competitive environment developments
– As Transland Shipping: Dealing with Cross-Border Logistics Barrier HBR case study mentions - Logistics Border 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.
Capital Spending Reduction
– Even during the low interest decade, Logistics Border 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, Yew-Ming Chia, Kee-Hung Lai, Amy Lau, Paul Li suggests that, Logistics Border 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Logistics Border is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Transland Shipping: Dealing with Cross-Border Logistics Barrier can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Logistics Border products
– To increase the profitability and margins on the products, Logistics Border needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Transland Shipping: Dealing with Cross-Border Logistics Barrier, it seems that the employees of Logistics Border 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.
Low market penetration in new markets
– Outside its home market of Logistics Border, firm in the HBR case study Transland Shipping: Dealing with Cross-Border Logistics Barrier needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Logistics Border 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
Logistics Border 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.
Opportunities Transland Shipping: Dealing with Cross-Border Logistics Barrier | 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier are -
Creating value in data economy
– The success of analytics program of Logistics Border has opened avenues for new revenue streams for the organization in the industry. This can help Logistics Border to build a more holistic ecosystem as suggested in the Transland Shipping: Dealing with Cross-Border Logistics Barrier case study. Logistics Border can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Logistics Border 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Logistics Border to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Logistics Border 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. Logistics Border 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.
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. Logistics Border can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Logistics Border is facing challenges because of the dominance of functional experts in the organization. Transland Shipping: Dealing with Cross-Border Logistics Barrier 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Logistics Border 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, Transland Shipping: Dealing with Cross-Border Logistics Barrier, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Logistics Border 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Logistics Border 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.
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 Logistics Border in the consumer business. Now Logistics Border can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Logistics Border 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.
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 Logistics Border 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.
Buying journey improvements
– Logistics Border can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transland Shipping: Dealing with Cross-Border Logistics Barrier 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.
Manufacturing automation
– Logistics Border 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.
Threats Transland Shipping: Dealing with Cross-Border Logistics Barrier External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transland Shipping: Dealing with Cross-Border Logistics Barrier are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Logistics Border in the Technology & Operations industry. The Technology & Operations 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.
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 Logistics Border in the Technology & Operations sector and impact the bottomline of the organization.
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.
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. Logistics Border 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Logistics Border with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Transland Shipping: Dealing with Cross-Border Logistics Barrier, Logistics Border 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 .
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 Logistics Border.
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. Logistics Border needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Logistics Border 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Logistics Border 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier .
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. Logistics Border can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Logistics Border 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.
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.
Weighted SWOT Analysis of Transland Shipping: Dealing with Cross-Border Logistics Barrier 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier 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 Transland Shipping: Dealing with Cross-Border Logistics Barrier 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 Logistics Border needs to make to build a sustainable competitive advantage.
