Swot Analysis of "Railroad Problem and the Solution" written by Richard S. Tedlow includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Interstate Railroad facing as an external strategic factors. Some of the topics covered in Railroad Problem and the Solution case study are - Strategic Management Strategies, Government and Global Business.
Some of the macro environment factors that can be used to understand the Railroad Problem and the Solution casestudy better are - – increasing energy prices, increasing commodity prices, geopolitical disruptions, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, technology disruption, digital marketing is dominated by two big players Facebook and Google,
talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Railroad Problem and the Solution
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Railroad Problem and the Solution case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Interstate Railroad, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Interstate Railroad 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 Railroad Problem and the Solution can be done for the following purposes –
1. Strategic planning using facts provided in Railroad Problem and the Solution case study
2. Improving business portfolio management of Interstate Railroad
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Interstate Railroad
Strengths Railroad Problem and the Solution | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Interstate Railroad in Railroad Problem and the Solution Harvard Business Review case study are -
Training and development
– Interstate Railroad has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Railroad Problem and the Solution 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.
Low bargaining power of suppliers
– Suppliers of Interstate Railroad in the sector have low bargaining power. Railroad Problem and the Solution has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Interstate Railroad to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Interstate Railroad is present in almost all the verticals within the industry. This has provided firm in Railroad Problem and the Solution 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.
Sustainable margins compare to other players in Global Business industry
– Railroad Problem and the Solution firm has clearly differentiated products in the market place. This has enabled Interstate Railroad to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Interstate Railroad to invest into research and development (R&D) and innovation.
Ability to lead change in Global Business field
– Interstate Railroad 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 Interstate Railroad in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Interstate Railroad in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Interstate Railroad is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Interstate Railroad 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 Railroad Problem and the Solution HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Interstate Railroad is one of the leading recruiters in the industry. Managers in the Railroad Problem and the Solution are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Interstate Railroad has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Interstate Railroad to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Interstate Railroad 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 Interstate Railroad is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Railroad Problem and the Solution Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Interstate Railroad 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.
Weaknesses Railroad Problem and the Solution | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Railroad Problem and the Solution are -
Slow to strategic competitive environment developments
– As Railroad Problem and the Solution HBR case study mentions - Interstate Railroad 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Interstate Railroad 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, Interstate Railroad is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Railroad Problem and the Solution can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Interstate Railroad 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.
Need for greater diversity
– Interstate Railroad 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Railroad Problem and the Solution 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 Interstate Railroad has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Interstate Railroad, firm in the HBR case study Railroad Problem and the Solution needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Interstate Railroad 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 - Railroad Problem and the Solution should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Interstate Railroad is dominated by functional specialists. It is not different from other players in the Global Business segment. Interstate Railroad needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Interstate Railroad to focus more on services rather than just following the product oriented approach.
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 Interstate Railroad supply chain. Even after few cautionary changes mentioned in the HBR case study - Railroad Problem and the Solution, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Interstate Railroad vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Interstate Railroad 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.
Opportunities Railroad Problem and the Solution | 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 Railroad Problem and the Solution are -
Using analytics as competitive advantage
– Interstate Railroad 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 Railroad Problem and the Solution - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Interstate Railroad to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Interstate Railroad can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Railroad Problem and the Solution 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.
Building a culture of innovation
– managers at Interstate Railroad 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 Global Business segment.
Manufacturing automation
– Interstate Railroad can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Developing new processes and practices
– Interstate Railroad can develop new processes and procedures in Global Business 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Interstate Railroad can use these opportunities to build new business models that can help the communities that Interstate Railroad operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 Interstate Railroad 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Interstate Railroad 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 Interstate Railroad to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Interstate Railroad is facing challenges because of the dominance of functional experts in the organization. Railroad Problem and the Solution 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.
Better consumer reach
– The expansion of the 5G network will help Interstate Railroad to increase its market reach. Interstate Railroad 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.
Loyalty marketing
– Interstate Railroad has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for Interstate Railroad 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Interstate Railroad 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, Railroad Problem and the Solution, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Railroad Problem and the Solution External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Railroad Problem and the Solution are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Interstate Railroad with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Interstate Railroad 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 Global Business industry regulations.
Consumer confidence and its impact on Interstate Railroad 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.
High dependence on third party suppliers
– Interstate Railroad 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.
Increasing wage structure of Interstate Railroad
– 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 Interstate Railroad.
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 Interstate Railroad in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Interstate Railroad 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.
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. Interstate Railroad 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Interstate Railroad in the Global Business industry. The Global Business 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.
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.
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. Interstate Railroad needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Environmental challenges
– Interstate Railroad 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. Interstate Railroad can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Railroad Problem and the Solution 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 Railroad Problem and the Solution 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 Railroad Problem and the Solution 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 Railroad Problem and the Solution 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 Railroad Problem and the Solution 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 Interstate Railroad needs to make to build a sustainable competitive advantage.
