Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters
OOCL is one of the world's largest integrated international container transportation, logistics and terminal companies, with a network covering Asia, Europe, North America and Australasia. The company is well respected in the industry with a reputation for providing customer-focused solutions, a quality-through-excellence approach and continual innovation. It has been listed on the Hong Kong Stock Exchange since 1973. In a volatile industry, it has to compete and form alliances. It has a history of investing widely with variable results.
Swot Analysis of "Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters" written by Ali Farhoomand, Tim Summers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oocl Container facing as an external strategic factors. Some of the topics covered in Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters casestudy better are - – increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oocl Container, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters can be done for the following purposes –
1. Strategic planning using facts provided in Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters case study
2. Improving business portfolio management of Oocl Container
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oocl Container
Strengths Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oocl Container in Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters Harvard Business Review case study are -
Successful track record of launching new products
– Oocl Container has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oocl Container 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.
Ability to lead change in Leadership & Managing People field
– Oocl Container 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 Oocl Container in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Oocl Container digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oocl Container 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.
Analytics focus
– Oocl Container 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 Ali Farhoomand, Tim Summers 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.
Strong track record of project management
– Oocl Container 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
– Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Oocl Container is one of the most innovative firm in sector. Manager in Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters firm has clearly differentiated products in the market place. This has enabled Oocl Container to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Oocl Container to invest into research and development (R&D) and innovation.
High brand equity
– Oocl Container has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oocl Container to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Oocl Container in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Oocl Container
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oocl Container does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters are -
Aligning sales with marketing
– It come across in the case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters can leverage the sales team experience to cultivate customer relationships as Oocl Container is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Oocl Container has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Oocl Container even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters, is just above the industry average. Oocl Container 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.
Skills based hiring
– The stress on hiring functional specialists at Oocl Container 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.
Capital Spending Reduction
– Even during the low interest decade, Oocl Container 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters, in the dynamic environment Oocl Container has struggled to respond to the nimble upstart competition. Oocl Container has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Oocl Container has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Oocl Container 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.
Increasing silos among functional specialists
– The organizational structure of Oocl Container is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Oocl Container needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oocl Container to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
Opportunities Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters | 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Oocl Container 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, Oocl Container 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.
Loyalty marketing
– Oocl Container 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oocl Container can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oocl Container to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Oocl Container can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Oocl Container 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.
Better consumer reach
– The expansion of the 5G network will help Oocl Container to increase its market reach. Oocl Container 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oocl Container is facing challenges because of the dominance of functional experts in the organization. Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oocl Container 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. Oocl Container 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oocl Container 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 Oocl Container to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Oocl Container can develop new processes and procedures in Leadership & Managing People 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.
Buying journey improvements
– Oocl Container can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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.
Threats Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oocl Container 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oocl Container in the Leadership & Managing People industry. The Leadership & Managing People 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.
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.
Shortening product life cycle
– it is one of the major threat that Oocl Container is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters, Oocl Container may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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 Oocl Container business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Oocl Container 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. Oocl Container can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Regulatory challenges
– Oocl Container 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 Leadership & Managing People industry regulations.
High dependence on third party suppliers
– Oocl Container 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.
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.
Consumer confidence and its impact on Oocl Container 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.
Increasing wage structure of Oocl Container
– 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 Oocl Container.
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 Oocl Container in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Orient Overseas Container Line (OOCL): Sailing Through Choppy Waters 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 Oocl Container needs to make to build a sustainable competitive advantage.