SWOT Analysis / TOWS Matrix for Vopak NV (United Kingdom)
Based on various researches at Oak Spring University , Vopak NV is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, technology disruption, there is backlash against globalization, central banks are concerned over increasing inflation, increasing commodity prices, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , 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 Vopak NV can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vopak NV, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vopak NV 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 Vopak NV can be done for the following purposes –
1. Strategic planning of Vopak NV
2. Improving business portfolio management of Vopak NV
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vopak NV
Strengths of Vopak NV | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vopak NV are -
Successful track record of launching new products
– Vopak NV has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vopak NV 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.
Digital Transformation in Misc. Transportation industry
- digital transformation varies from industry to industry. For Vopak NV digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vopak NV 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.
Superior customer experience
– The customer experience strategy of Vopak NV in Misc. Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Vopak NV 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 Misc. Transportation industry. The technology infrastructure of United Kingdom 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 Vopak NV comprises – understanding the underlying the factors in the Misc. 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.
Ability to recruit top talent
– Vopak NV is one of the leading players in the Misc. Transportation industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Misc. Transportation industry
– Vopak NV has clearly differentiated products in the market place. This has enabled Vopak NV to fetch slight price premium compare to the competitors in the Misc. Transportation industry. The sustainable margins have also helped Vopak NV to invest into research and development (R&D) and innovation.
Innovation driven organization
– Vopak NV is one of the most innovative firm in Misc. Transportation sector.
Training and development
– Vopak NV 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.
Organizational Resilience of Vopak NV
– The covid-19 pandemic has put organizational resilience at the centre of everthing Vopak NV does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Vopak NV is present in almost all the verticals within the Misc. Transportation industry. This has provided Vopak NV 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.
Effective Research and Development (R&D)
– Vopak NV has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Vopak NV staying ahead in the Misc. Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Vopak NV | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vopak NV are -
Increasing silos among functional specialists
– The organizational structure of Vopak NV is dominated by functional specialists. It is not different from other players in the Misc. Transportation industry, but Vopak NV needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vopak NV to focus more on services in the Misc. Transportation industry rather than just following the product oriented approach.
Need for greater diversity
– Vopak NV 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vopak NV is slow explore the new channels of communication. These new channels of communication can help Vopak NV to provide better information regarding Misc. Transportation products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Vopak NV 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 Misc. Transportation industry using digital technology.
Products dominated business model
– Even though Vopak NV has some of the most successful models in the Misc. Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Vopak NV should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Vopak NV, it seems that company is thinking out the frontier risks that can impact Misc. Transportation industry. 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.
Interest costs
– Compare to the competition, Vopak NV 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.
Compensation and incentives
– The revenue per employee of Vopak NV is just above the Misc. 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.
Aligning sales with marketing
– From the outside it seems that Vopak NV needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Transportation industry have deep experience in developing customer relationships. Marketing department at Vopak NV can leverage the sales team experience to cultivate customer relationships as Vopak NV is planning to shift buying processes online.
High dependence on Vopak NV ‘s star products
– The top 2 products and services of Vopak NV still accounts for major business revenue. This dependence on star products in Misc. Transportation industry has resulted into insufficient focus on developing new products, even though Vopak NV has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Vopak NV has high operating costs in the Misc. Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vopak NV lucrative customers.
Vopak NV Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vopak NV are -
Developing new processes and practices
– Vopak NV can develop new processes and procedures in Misc. 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.
Learning at scale
– Online learning technologies has now opened space for Vopak NV 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vopak NV 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 Vopak NV to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Vopak NV 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 Misc. Transportation industry.
Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vopak NV in the Misc. Transportation industry. Now Vopak NV can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Vopak NV can use the latest technology developments to improve its manufacturing and designing process in Misc. 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.
Leveraging digital technologies
– Vopak NV 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vopak NV 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.
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 Vopak NV 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vopak NV in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Transportation industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Vopak NV has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Transportation sector. This continuous investment in analytics has enabled Vopak NV to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vopak NV to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vopak NV 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
– Vopak NV 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.
Threats Vopak NV External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vopak NV are -
High dependence on third party suppliers
– Vopak NV 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.
Environmental challenges
– Vopak NV 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. Vopak NV can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.
Easy access to finance
– Easy access to finance in Misc. Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vopak NV can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Vopak NV may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation sector.
Technology acceleration in Forth Industrial Revolution
– Vopak NV has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, Vopak NV needs to keep up with the evolution of technology in the Misc. 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Transportation industry are lowering. It can presents Vopak NV with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Transportation sector.
Stagnating economy with rate increase
– Vopak NV 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 Misc. Transportation industry.
Shortening product life cycle
– it is one of the major threat that Vopak NV is facing in Misc. Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Vopak NV 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 Misc. Transportation industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Vopak NV will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Vopak NV 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 Misc. Transportation industry regulations.
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 Vopak NV business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Vopak NV Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vopak NV 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 Vopak NV 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 Vopak NV 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 Vopak NV 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 Vopak NV needs to make to build a sustainable competitive advantage.