SWOT Analysis / TOWS Matrix for Transcoal Pacific (Indonesia)
Based on various researches at Oak Spring University , Transcoal Pacific is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, technology disruption,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Transcoal Pacific
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Transcoal Pacific can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Transcoal Pacific, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Transcoal Pacific 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 Transcoal Pacific can be done for the following purposes –
1. Strategic planning of Transcoal Pacific
2. Improving business portfolio management of Transcoal Pacific
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Transcoal Pacific
Strengths of Transcoal Pacific | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Transcoal Pacific are -
Cross disciplinary teams
– Horizontal connected teams at the Transcoal Pacific 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 of Transcoal Pacific comprises – understanding the underlying the factors in the Water Transportation 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.
Learning organization
- Transcoal Pacific 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 Transcoal Pacific is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Transcoal Pacific emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Transcoal Pacific has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Transcoal Pacific staying ahead in the Water Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Transcoal Pacific in the Transportation sector have low bargaining power. Transcoal Pacific has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Transcoal Pacific to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Transcoal Pacific digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Transcoal Pacific 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.
Successful track record of launching new products
– Transcoal Pacific has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Transcoal Pacific 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.
Strong track record of project management in the Water Transportation industry
– Transcoal Pacific is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Transcoal Pacific has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Transcoal Pacific is one of the leading players in the Water Transportation industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Transcoal Pacific has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Transportation industry. Secondly the value chain collaborators of Transcoal Pacific have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Transcoal Pacific 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 Water Transportation industry. The technology infrastructure of Indonesia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses of Transcoal Pacific | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transcoal Pacific are -
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 Transcoal Pacific supply chain. Even after few cautionary changes, Transcoal Pacific is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Transcoal Pacific vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Transcoal Pacific is just above the Water Transportation industry average. It 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.
Need for greater diversity
– Transcoal Pacific 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.
Slow to strategic competitive environment developments
– As Transcoal Pacific is one of the leading players in the Water Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Water Transportation industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Transcoal Pacific has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Transportation industry over the last five years. Transcoal Pacific 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Transcoal Pacific is slow explore the new channels of communication. These new channels of communication can help Transcoal Pacific to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Transcoal Pacific has a high cash cycle compare to other players in the Water Transportation industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Transcoal Pacific 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, Transcoal Pacific 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 Water Transportation industry using digital technology.
Employees’ less understanding of Transcoal Pacific strategy
– From the outside it seems that the employees of Transcoal Pacific 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 Indonesia, Transcoal Pacific needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Transcoal Pacific Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Transcoal Pacific are -
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. Transcoal Pacific can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Transcoal Pacific has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Transportation sector. This continuous investment in analytics has enabled Transcoal Pacific to build a competitive advantage using analytics. The analytics driven competitive advantage can help Transcoal Pacific to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Transcoal Pacific is facing challenges because of the dominance of functional experts in the organization. Transcoal Pacific can utilize new technology in the field of Water Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Transcoal Pacific can use the latest technology developments to improve its manufacturing and designing process in Water Transportation sector. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Transcoal Pacific in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Transportation industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Transcoal Pacific can use these opportunities to build new business models that can help the communities that Transcoal Pacific operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Buying journey improvements
– Transcoal Pacific can improve the customer journey of consumers in the Water Transportation industry by using analytics and artificial intelligence. It 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Transcoal Pacific can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Transcoal Pacific 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.
Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Transcoal Pacific in the Water Transportation industry. Now Transcoal Pacific can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Transcoal Pacific can develop new processes and procedures in Water Transportation 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.
Better consumer reach
– The expansion of the 5G network will help Transcoal Pacific to increase its market reach. Transcoal Pacific 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.
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 Transcoal Pacific 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.
Threats Transcoal Pacific External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Transcoal Pacific are -
Stagnating economy with rate increase
– Transcoal Pacific 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 Water Transportation industry.
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 Transcoal Pacific.
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 Transcoal Pacific is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Transcoal Pacific with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
Technology acceleration in Forth Industrial Revolution
– Transcoal Pacific has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Transcoal Pacific needs to keep up with the evolution of technology in the Water Transportation sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Transcoal Pacific business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Transcoal Pacific in Water Transportation industry. The Water Transportation 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.
Increasing wage structure of Transcoal Pacific
– 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 Transcoal Pacific.
Environmental challenges
– Transcoal Pacific 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. Transcoal Pacific can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Consumer confidence and its impact on Transcoal Pacific 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 Water Transportation industry and other sectors.
Easy access to finance
– Easy access to finance in Water Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Transcoal Pacific 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
– Transcoal Pacific 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 Water Transportation industry regulations.
Weighted SWOT Analysis of Transcoal Pacific Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific needs to make to build a sustainable competitive advantage.