Swot Analysis of "TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia" written by Michael Y. Yoshino, Carin-Isabel Knoop includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tnt Logistik facing as an external strategic factors. Some of the topics covered in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia case study are - Strategic Management Strategies, Joint ventures, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia casestudy better are - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing energy prices, technology disruption, increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tnt Logistik, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tnt Logistik 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia can be done for the following purposes –
1. Strategic planning using facts provided in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia case study
2. Improving business portfolio management of Tnt Logistik
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 Tnt Logistik
Strengths TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tnt Logistik in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia Harvard Business Review case study are -
Organizational Resilience of Tnt Logistik
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tnt Logistik does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Tnt Logistik has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tnt Logistik to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Tnt Logistik in the sector have low bargaining power. TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tnt Logistik to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Tnt Logistik is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia firm has clearly differentiated products in the market place. This has enabled Tnt Logistik to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Tnt Logistik to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Tnt Logistik 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.
Operational resilience
– The operational resilience strategy in the TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Tnt Logistik 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 Michael Y. Yoshino, Carin-Isabel Knoop 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
– Tnt Logistik is one of the leading recruiters in the industry. Managers in the TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Tnt Logistik is present in almost all the verticals within the industry. This has provided firm in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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
– Tnt Logistik 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Tnt Logistik is one of the most innovative firm in sector. Manager in TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia are -
Need for greater diversity
– Tnt Logistik 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.
Interest costs
– Compare to the competition, Tnt Logistik 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tnt Logistik is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 operating costs
– Compare to the competitors, firm in the HBR case study TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 Tnt Logistik 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Tnt Logistik 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.
Products dominated business model
– Even though Tnt Logistik 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 - TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Tnt Logistik is dominated by functional specialists. It is not different from other players in the Global Business segment. Tnt Logistik needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tnt Logistik to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Tnt Logistik has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 Tnt Logistik has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia HBR case study mentions - Tnt Logistik 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.
Opportunities TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia | 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Tnt Logistik can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tnt Logistik 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tnt Logistik 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. Tnt Logistik 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.
Better consumer reach
– The expansion of the 5G network will help Tnt Logistik to increase its market reach. Tnt Logistik 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tnt Logistik can use these opportunities to build new business models that can help the communities that Tnt Logistik operates in. Secondly it can use opportunities from government spending in Global Business sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tnt Logistik 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, TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Tnt Logistik 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.
Leveraging digital technologies
– Tnt Logistik 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.
Creating value in data economy
– The success of analytics program of Tnt Logistik has opened avenues for new revenue streams for the organization in the industry. This can help Tnt Logistik to build a more holistic ecosystem as suggested in the TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia case study. Tnt Logistik can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Tnt Logistik 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.
Buying journey improvements
– Tnt Logistik can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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.
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 Tnt Logistik 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.
Building a culture of innovation
– managers at Tnt Logistik 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.
Threats TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tnt Logistik with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Tnt Logistik in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Tnt Logistik 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. Tnt Logistik can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Consumer confidence and its impact on Tnt Logistik 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.
Stagnating economy with rate increase
– Tnt Logistik 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. Tnt Logistik 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.
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. Tnt Logistik needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tnt Logistik can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Tnt Logistik
– 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 Tnt Logistik.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tnt Logistik 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia .
High dependence on third party suppliers
– Tnt Logistik 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.
Regulatory challenges
– Tnt Logistik 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.
Weighted SWOT Analysis of TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 TNT Ltd.'s Logistics Services in Asia (B): PT TNT Logistik Indonesia 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 Tnt Logistik needs to make to build a sustainable competitive advantage.