Zero (9028) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zero (Japan)
Based on various researches at Oak Spring University , Zero is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zero can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zero, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zero 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 Zero can be done for the following purposes –
1. Strategic planning of Zero
2. Improving business portfolio management of Zero
3. Assessing feasibility of the new initiative in Japan
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zero
Strengths of Zero | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zero are -
Sustainable margins compare to other players in Trucking industry
– Zero has clearly differentiated products in the market place. This has enabled Zero to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped Zero to invest into research and development (R&D) and innovation.
Learning organization
- Zero 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 Zero is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zero emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Zero has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zero 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.
Effective Research and Development (R&D)
– Zero has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zero staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Zero is present in almost all the verticals within the Trucking industry. This has provided Zero 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.
Cross disciplinary teams
– Horizontal connected teams at the Zero 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.
Ability to recruit top talent
– Zero is one of the leading players in the Trucking industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy of Zero comprises – understanding the underlying the factors in the Trucking 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.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For Zero digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zero 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.
Innovation driven organization
– Zero is one of the most innovative firm in Trucking sector.
Analytics focus
– Zero 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 Trucking industry. The technology infrastructure of Japan 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.
Ability to lead change in Trucking
– Zero is one of the leading players in the Trucking industry in Japan. Over the years it has not only transformed the business landscape in the Trucking industry in Japan but also across the existing markets. The ability to lead change has enabled Zero in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Zero | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zero are -
Employees’ less understanding of Zero strategy
– From the outside it seems that the employees of Zero 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.
High dependence on Zero ‘s star products
– The top 2 products and services of Zero still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though Zero has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Zero 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.
High operating costs
– Compare to the competitors, Zero has high operating costs in the Trucking industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zero lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, Zero 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.
Lack of clear differentiation of Zero products
– To increase the profitability and margins on the products, Zero needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Zero is dominated by functional specialists. It is not different from other players in the Trucking industry, but Zero needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zero to focus more on services in the Trucking industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zero is slow explore the new channels of communication. These new channels of communication can help Zero to provide better information regarding Trucking products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Zero has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High 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 Zero supply chain. Even after few cautionary changes, Zero is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zero vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Zero needs to have more collaboration between its sales team and marketing team. Sales professionals in the Trucking industry have deep experience in developing customer relationships. Marketing department at Zero can leverage the sales team experience to cultivate customer relationships as Zero is planning to shift buying processes online.
Zero Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zero are -
Better consumer reach
– The expansion of the 5G network will help Zero to increase its market reach. Zero 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zero 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. Zero 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zero can use these opportunities to build new business models that can help the communities that Zero operates in. Secondly it can use opportunities from government spending in Trucking sector.
Learning at scale
– Online learning technologies has now opened space for Zero 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.
Loyalty marketing
– Zero 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zero 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 Zero to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Zero has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled Zero to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zero to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Zero 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.
Developing new processes and practices
– Zero can develop new processes and procedures in Trucking 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zero is facing challenges because of the dominance of functional experts in the organization. Zero can utilize new technology in the field of Trucking industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zero in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zero 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.
Buying journey improvements
– Zero can improve the customer journey of consumers in the Trucking 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.
Threats Zero External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zero are -
Environmental challenges
– Zero 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. Zero can take advantage of this fund but it will also bring new competitors in the Trucking industry.
High dependence on third party suppliers
– Zero 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.
Technology acceleration in Forth Industrial Revolution
– Zero has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Zero needs to keep up with the evolution of technology in the Trucking 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.
Regulatory challenges
– Zero 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 Trucking industry regulations.
Shortening product life cycle
– it is one of the major threat that Zero is facing in Trucking 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 Trucking industry are lowering. It can presents Zero with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking 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 Zero in the Trucking sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zero can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Zero 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 Trucking industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zero 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 Zero prominent markets.
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 Zero.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Zero Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zero 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 Zero 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 Zero 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 Zero 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 Zero needs to make to build a sustainable competitive advantage.