Based on various researches at Oak Spring University , Panalpina Welttransport Holding is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of Panalpina Welttransport Holding
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Panalpina Welttransport Holding can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Panalpina Welttransport Holding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Panalpina Welttransport Holding 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 Panalpina Welttransport Holding can be done for the following purposes –
1. Strategic planning of Panalpina Welttransport Holding
2. Improving business portfolio management of Panalpina Welttransport Holding
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Airline sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Panalpina Welttransport Holding
Strengths of Panalpina Welttransport Holding | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Panalpina Welttransport Holding are -
Operational resilience
– The operational resilience strategy of Panalpina Welttransport Holding comprises – understanding the underlying the factors in the Airline 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.
High brand equity
– Panalpina Welttransport Holding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Panalpina Welttransport Holding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Panalpina Welttransport Holding is present in almost all the verticals within the Airline industry. This has provided Panalpina Welttransport Holding 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.
High switching costs
– The high switching costs that Panalpina Welttransport Holding 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.
Analytics focus
– Panalpina Welttransport Holding 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 Airline 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.
Training and development
– Panalpina Welttransport Holding 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.
Successful track record of launching new products
– Panalpina Welttransport Holding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Panalpina Welttransport Holding 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.
Learning organization
- Panalpina Welttransport Holding 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 Panalpina Welttransport Holding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Panalpina Welttransport Holding emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Airline industry
– Panalpina Welttransport Holding has clearly differentiated products in the market place. This has enabled Panalpina Welttransport Holding to fetch slight price premium compare to the competitors in the Airline industry. The sustainable margins have also helped Panalpina Welttransport Holding to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Panalpina Welttransport Holding 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.
Effective Research and Development (R&D)
– Panalpina Welttransport Holding has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Panalpina Welttransport Holding staying ahead in the Airline 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 Panalpina Welttransport Holding in the Transportation sector have low bargaining power. Panalpina Welttransport Holding has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Panalpina Welttransport Holding to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Panalpina Welttransport Holding | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Panalpina Welttransport Holding are -
Slow to strategic competitive environment developments
– As Panalpina Welttransport Holding is one of the leading players in the Airline industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Airline industry in last five years.
Lack of clear differentiation of Panalpina Welttransport Holding products
– To increase the profitability and margins on the products, Panalpina Welttransport Holding needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of United Kingdom, Panalpina Welttransport Holding needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Panalpina Welttransport Holding has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Airline industry over the last five years. Panalpina Welttransport Holding 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 of Panalpina Welttransport Holding is just above the Airline 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.
Products dominated business model
– Even though Panalpina Welttransport Holding has some of the most successful models in the Airline industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Panalpina Welttransport Holding should strive to include more intangible value offerings along with its core products and services.
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 Panalpina Welttransport Holding supply chain. Even after few cautionary changes, Panalpina Welttransport Holding is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Panalpina Welttransport Holding vulnerable to further global disruptions in South East Asia.
Skills based hiring in Airline industry
– The stress on hiring functional specialists at Panalpina Welttransport Holding 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.
No frontier risks strategy
– From the 10K / annual statement of Panalpina Welttransport Holding, it seems that company is thinking out the frontier risks that can impact Airline 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.
High operating costs
– Compare to the competitors, Panalpina Welttransport Holding has high operating costs in the Airline industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Panalpina Welttransport Holding lucrative customers.
High dependence on Panalpina Welttransport Holding ‘s star products
– The top 2 products and services of Panalpina Welttransport Holding still accounts for major business revenue. This dependence on star products in Airline industry has resulted into insufficient focus on developing new products, even though Panalpina Welttransport Holding has relatively successful track record of launching new products.
Panalpina Welttransport Holding Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Panalpina Welttransport Holding are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Panalpina Welttransport Holding 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Panalpina Welttransport Holding can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Panalpina Welttransport Holding to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Panalpina Welttransport Holding 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 Panalpina Welttransport Holding to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Panalpina Welttransport Holding has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Airline sector. This continuous investment in analytics has enabled Panalpina Welttransport Holding to build a competitive advantage using analytics. The analytics driven competitive advantage can help Panalpina Welttransport Holding to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Panalpina Welttransport Holding can use the latest technology developments to improve its manufacturing and designing process in Airline 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.
Better consumer reach
– The expansion of the 5G network will help Panalpina Welttransport Holding to increase its market reach. Panalpina Welttransport Holding 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.
Use of Bitcoin and other crypto currencies for transactions in Airline industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Panalpina Welttransport Holding in the Airline industry. Now Panalpina Welttransport Holding can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Panalpina Welttransport Holding can develop new processes and procedures in Airline 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, Panalpina Welttransport Holding is facing challenges because of the dominance of functional experts in the organization. Panalpina Welttransport Holding can utilize new technology in the field of Airline industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Panalpina Welttransport Holding 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 Panalpina Welttransport Holding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Panalpina Welttransport Holding 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 Panalpina Welttransport Holding in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Airline industry, and it will provide faster access to the consumers.
Threats Panalpina Welttransport Holding External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Panalpina Welttransport Holding are -
Shortening product life cycle
– it is one of the major threat that Panalpina Welttransport Holding is facing in Airline sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Panalpina Welttransport Holding 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. Panalpina Welttransport Holding can take advantage of this fund but it will also bring new competitors in the Airline industry.
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 Panalpina Welttransport Holding business can come under increasing regulations regarding data privacy, data security, etc.
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 Panalpina Welttransport Holding in the Airline sector and impact the bottomline of the organization.
Consumer confidence and its impact on Panalpina Welttransport Holding 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 Airline industry and other sectors.
Stagnating economy with rate increase
– Panalpina Welttransport Holding 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 Airline industry.
Regulatory challenges
– Panalpina Welttransport Holding 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 Airline industry regulations.
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.
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 Panalpina Welttransport Holding.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Panalpina Welttransport Holding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Airline sector.
Increasing wage structure of Panalpina Welttransport Holding
– 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 Panalpina Welttransport Holding.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Panalpina Welttransport Holding 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 Panalpina Welttransport Holding prominent markets.
Easy access to finance
– Easy access to finance in Airline industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Panalpina Welttransport Holding can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Panalpina Welttransport Holding Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Panalpina Welttransport Holding 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 Panalpina Welttransport Holding 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 Panalpina Welttransport Holding 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 Panalpina Welttransport Holding 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 Panalpina Welttransport Holding needs to make to build a sustainable competitive advantage.