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 – increasing energy prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing commodity prices, 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 -
Superior customer experience
– The customer experience strategy of Zero in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Zero has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Zero have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Zero 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.
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.
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.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Zero in the Transportation sector have low bargaining power. Zero has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zero to manage not only supply disruptions but also source products at highly competitive prices.
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.
High switching costs
– The high switching costs that Zero has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
Weaknesses of Zero | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zero are -
Slow decision making process
– As mentioned earlier in the report, Zero has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Trucking industry over the last five years. Zero 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.
Capital Spending Reduction
– Even during the low interest decade, Zero 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 Trucking industry using digital technology.
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.
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.
Need for greater diversity
– Zero 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.
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.
Products dominated business model
– Even though Zero has some of the most successful models in the Trucking industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zero should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Zero has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Zero Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zero are -
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.
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.
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.
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.
Manufacturing automation
– Zero can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.
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.
Building a culture of innovation
– managers at Zero 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 Trucking industry.
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.
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. Zero can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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 Zero 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.
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.
Threats Zero External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zero are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
Increasing wage structure of Zero
– 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 Zero.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zero may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
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. Zero needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
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.
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.
Consumer confidence and its impact on Zero 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 Trucking industry and other sectors.
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.
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.
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.
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.