RUMO ON NM (RAIL3) SWOT Analysis / TOWS Matrix / MBA Resources
Railroads
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for RUMO ON NM (Brazil)
Based on various researches at Oak Spring University , RUMO ON NM is operating in a macro-environment that has been destablized by – 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, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that RUMO ON NM can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the RUMO ON NM, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which RUMO ON NM 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 RUMO ON NM can be done for the following purposes –
1. Strategic planning of RUMO ON NM
2. Improving business portfolio management of RUMO ON NM
3. Assessing feasibility of the new initiative in Brazil
4. Making a Railroads sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of RUMO ON NM
Strengths of RUMO ON NM | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of RUMO ON NM are -
Successful track record of launching new products
– RUMO ON NM has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. RUMO ON NM 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.
Cross disciplinary teams
– Horizontal connected teams at the RUMO ON NM 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.
Highly skilled collaborators
– RUMO ON NM has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Railroads industry. Secondly the value chain collaborators of RUMO ON NM have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Railroads industry
- digital transformation varies from industry to industry. For RUMO ON NM digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. RUMO ON NM 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.
Strong track record of project management in the Railroads industry
– RUMO ON NM is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of RUMO ON NM comprises – understanding the underlying the factors in the Railroads 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 lead change in Railroads
– RUMO ON NM is one of the leading players in the Railroads industry in Brazil. Over the years it has not only transformed the business landscape in the Railroads industry in Brazil but also across the existing markets. The ability to lead change has enabled RUMO ON NM in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– RUMO ON NM has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled RUMO ON NM to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- RUMO ON NM 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 RUMO ON NM is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at RUMO ON NM emphasize – knowledge, initiative, and innovation.
Organizational Resilience of RUMO ON NM
– The covid-19 pandemic has put organizational resilience at the centre of everthing RUMO ON NM does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– RUMO ON NM is present in almost all the verticals within the Railroads industry. This has provided RUMO ON NM 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.
Superior customer experience
– The customer experience strategy of RUMO ON NM in Railroads industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of RUMO ON NM | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of RUMO ON NM are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, RUMO ON NM is slow explore the new channels of communication. These new channels of communication can help RUMO ON NM to provide better information regarding Railroads products and services. It can also build an online community to further reach out to potential 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 RUMO ON NM supply chain. Even after few cautionary changes, RUMO ON NM is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left RUMO ON NM vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of RUMO ON NM, it seems that company is thinking out the frontier risks that can impact Railroads 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.
Slow decision making process
– As mentioned earlier in the report, RUMO ON NM has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Railroads industry over the last five years. RUMO ON NM 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.
Need for greater diversity
– RUMO ON NM 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.
Employees’ less understanding of RUMO ON NM strategy
– From the outside it seems that the employees of RUMO ON NM 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.
Aligning sales with marketing
– From the outside it seems that RUMO ON NM needs to have more collaboration between its sales team and marketing team. Sales professionals in the Railroads industry have deep experience in developing customer relationships. Marketing department at RUMO ON NM can leverage the sales team experience to cultivate customer relationships as RUMO ON NM is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of RUMO ON NM is dominated by functional specialists. It is not different from other players in the Railroads industry, but RUMO ON NM needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help RUMO ON NM to focus more on services in the Railroads industry rather than just following the product oriented approach.
High bargaining power of channel partners in Railroads industry
– because of the regulatory requirements in Brazil, RUMO ON NM is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Railroads industry.
Products dominated business model
– Even though RUMO ON NM has some of the most successful models in the Railroads industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. RUMO ON NM should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Railroads industry
– The stress on hiring functional specialists at RUMO ON NM 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.
RUMO ON NM Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of RUMO ON NM are -
Creating value in data economy
– The success of analytics program of RUMO ON NM has opened avenues for new revenue streams for the organization in Railroads industry. This can help RUMO ON NM to build a more holistic ecosystem for RUMO ON NM products in the Railroads industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at RUMO ON NM 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 Railroads industry.
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. RUMO ON NM can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– RUMO ON NM can use the latest technology developments to improve its manufacturing and designing process in Railroads 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Railroads industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. RUMO ON NM 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. RUMO ON NM 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, RUMO ON NM is facing challenges because of the dominance of functional experts in the organization. RUMO ON NM can utilize new technology in the field of Railroads industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for RUMO ON NM 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Railroads industry, but it has also influenced the consumer preferences. RUMO ON NM can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– RUMO ON NM 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.
Developing new processes and practices
– RUMO ON NM can develop new processes and procedures in Railroads 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, RUMO ON NM can use these opportunities to build new business models that can help the communities that RUMO ON NM operates in. Secondly it can use opportunities from government spending in Railroads sector.
Use of Bitcoin and other crypto currencies for transactions in Railroads industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for RUMO ON NM in the Railroads industry. Now RUMO ON NM can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for RUMO ON NM in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Railroads industry, and it will provide faster access to the consumers.
Threats RUMO ON NM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of RUMO ON NM are -
Easy access to finance
– Easy access to finance in Railroads industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. RUMO ON NM can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 RUMO ON NM business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on RUMO ON NM 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 Railroads industry and other sectors.
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.
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. RUMO ON NM 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.
Technology acceleration in Forth Industrial Revolution
– RUMO ON NM has witnessed rapid integration of technology during Covid-19 in the Railroads industry. As one of the leading players in the industry, RUMO ON NM needs to keep up with the evolution of technology in the Railroads 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.
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 RUMO ON NM in the Railroads sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, RUMO ON NM may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Railroads sector.
Environmental challenges
– RUMO ON NM 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. RUMO ON NM can take advantage of this fund but it will also bring new competitors in the Railroads industry.
High dependence on third party suppliers
– RUMO ON NM 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.
Shortening product life cycle
– it is one of the major threat that RUMO ON NM is facing in Railroads sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 RUMO ON NM.
Stagnating economy with rate increase
– RUMO ON NM 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 Railroads industry.
Weighted SWOT Analysis of RUMO ON NM Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at RUMO ON NM 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 RUMO ON NM 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 RUMO ON NM 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 RUMO ON NM 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 RUMO ON NM needs to make to build a sustainable competitive advantage.
