ComfortDelGro (CMDG) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Transportation
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for ComfortDelGro (Singapore)
Based on various researches at Oak Spring University , ComfortDelGro is operating in a macro-environment that has been destablized by – increasing energy prices, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, there is increasing trade war between United States & China, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ComfortDelGro can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ComfortDelGro, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ComfortDelGro 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 ComfortDelGro can be done for the following purposes –
1. Strategic planning of ComfortDelGro
2. Improving business portfolio management of ComfortDelGro
3. Assessing feasibility of the new initiative in Singapore
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ComfortDelGro
Strengths of ComfortDelGro | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ComfortDelGro are -
Diverse revenue streams
– ComfortDelGro is present in almost all the verticals within the Misc. Transportation industry. This has provided ComfortDelGro 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 ComfortDelGro in Misc. Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Misc. Transportation industry
– ComfortDelGro is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– ComfortDelGro has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ComfortDelGro to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Misc. Transportation industry
- digital transformation varies from industry to industry. For ComfortDelGro digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ComfortDelGro 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.
Highly skilled collaborators
– ComfortDelGro has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Transportation industry. Secondly the value chain collaborators of ComfortDelGro have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– ComfortDelGro 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.
Low bargaining power of suppliers
– Suppliers of ComfortDelGro in the Transportation sector have low bargaining power. ComfortDelGro has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ComfortDelGro to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Misc. Transportation
– ComfortDelGro is one of the leading players in the Misc. Transportation industry in Singapore. Over the years it has not only transformed the business landscape in the Misc. Transportation industry in Singapore but also across the existing markets. The ability to lead change has enabled ComfortDelGro in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- ComfortDelGro 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 ComfortDelGro is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ComfortDelGro emphasize – knowledge, initiative, and innovation.
Organizational Resilience of ComfortDelGro
– The covid-19 pandemic has put organizational resilience at the centre of everthing ComfortDelGro does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– ComfortDelGro 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 Singapore 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.
Weaknesses of ComfortDelGro | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ComfortDelGro are -
Capital Spending Reduction
– Even during the low interest decade, ComfortDelGro 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.
High operating costs
– Compare to the competitors, ComfortDelGro 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 ComfortDelGro lucrative customers.
Aligning sales with marketing
– From the outside it seems that ComfortDelGro 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 ComfortDelGro can leverage the sales team experience to cultivate customer relationships as ComfortDelGro is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As ComfortDelGro is one of the leading players in the Misc. Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Transportation industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, ComfortDelGro is slow explore the new channels of communication. These new channels of communication can help ComfortDelGro to provide better information regarding Misc. Transportation products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at ComfortDelGro, in the dynamic environment of Misc. Transportation industry it has struggled to respond to the nimble upstart competition. ComfortDelGro has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on ComfortDelGro ‘s star products
– The top 2 products and services of ComfortDelGro 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 ComfortDelGro has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, ComfortDelGro has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Transportation industry over the last five years. ComfortDelGro 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.
Lack of clear differentiation of ComfortDelGro products
– To increase the profitability and margins on the products, ComfortDelGro needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though ComfortDelGro 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. ComfortDelGro should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
ComfortDelGro has a high cash cycle compare to other players in the Misc. Transportation industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
ComfortDelGro Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ComfortDelGro are -
Low interest rates
– Even though inflation is raising its head in most developed economies, ComfortDelGro 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Transportation industry, but it has also influenced the consumer preferences. ComfortDelGro can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ComfortDelGro 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
– ComfortDelGro 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ComfortDelGro 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 ComfortDelGro to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, ComfortDelGro is facing challenges because of the dominance of functional experts in the organization. ComfortDelGro can utilize new technology in the field of Misc. Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– ComfortDelGro 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.
Better consumer reach
– The expansion of the 5G network will help ComfortDelGro to increase its market reach. ComfortDelGro 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ComfortDelGro can use these opportunities to build new business models that can help the communities that ComfortDelGro operates in. Secondly it can use opportunities from government spending in Misc. Transportation sector.
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 ComfortDelGro in the Misc. Transportation industry. Now ComfortDelGro can target international markets with far fewer capital restrictions requirements than the existing system.
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. ComfortDelGro 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 Misc. Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ComfortDelGro 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. ComfortDelGro 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.
Leveraging digital technologies
– ComfortDelGro 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.
Threats ComfortDelGro External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ComfortDelGro are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ComfortDelGro 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 ComfortDelGro prominent markets.
Consumer confidence and its impact on ComfortDelGro 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.
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 ComfortDelGro business can come under increasing regulations regarding data privacy, data security, etc.
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. ComfortDelGro can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Transportation industry are lowering. It can presents ComfortDelGro with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Transportation sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ComfortDelGro in Misc. Transportation industry. The Misc. Transportation industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– ComfortDelGro 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.
Stagnating economy with rate increase
– ComfortDelGro 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.
Technology acceleration in Forth Industrial Revolution
– ComfortDelGro has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, ComfortDelGro 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.
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 ComfortDelGro in the Misc. Transportation sector and impact the bottomline of the organization.
Environmental challenges
– ComfortDelGro 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. ComfortDelGro can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.
Increasing wage structure of ComfortDelGro
– 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 ComfortDelGro.
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. ComfortDelGro 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.
Weighted SWOT Analysis of ComfortDelGro Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ComfortDelGro 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 ComfortDelGro 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 ComfortDelGro 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 ComfortDelGro 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 ComfortDelGro needs to make to build a sustainable competitive advantage.