GOL PN N2 (GOLL4) SWOT Analysis / TOWS Matrix / MBA Resources
Airline
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for GOL PN N2 (Brazil)
Based on various researches at Oak Spring University , GOL PN N2 is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, wage bills are increasing, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that GOL PN N2 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the GOL PN N2, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which GOL PN N2 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 GOL PN N2 can be done for the following purposes –
1. Strategic planning of GOL PN N2
2. Improving business portfolio management of GOL PN N2
3. Assessing feasibility of the new initiative in Brazil
4. Making a Airline sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of GOL PN N2
Strengths of GOL PN N2 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of GOL PN N2 are -
Training and development
– GOL PN N2 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.
Cross disciplinary teams
– Horizontal connected teams at the GOL PN N2 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.
Successful track record of launching new products
– GOL PN N2 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. GOL PN N2 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.
High brand equity
– GOL PN N2 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled GOL PN N2 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– GOL PN N2 is one of the most innovative firm in Airline sector.
Diverse revenue streams
– GOL PN N2 is present in almost all the verticals within the Airline industry. This has provided GOL PN N2 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.
Learning organization
- GOL PN N2 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 GOL PN N2 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at GOL PN N2 emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that GOL PN N2 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.
Low bargaining power of suppliers
– Suppliers of GOL PN N2 in the Transportation sector have low bargaining power. GOL PN N2 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps GOL PN N2 to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– GOL PN N2 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 Brazil 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.
Organizational Resilience of GOL PN N2
– The covid-19 pandemic has put organizational resilience at the centre of everthing GOL PN N2 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of GOL PN N2 in Airline industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of GOL PN N2 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GOL PN N2 are -
High operating costs
– Compare to the competitors, GOL PN N2 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 GOL PN N2 lucrative customers.
Low market penetration in new markets
– Outside its home market of Brazil, GOL PN N2 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though GOL PN N2 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. GOL PN N2 should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
GOL PN N2 has a high cash cycle compare to other players in the Airline industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As GOL PN N2 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.
Aligning sales with marketing
– From the outside it seems that GOL PN N2 needs to have more collaboration between its sales team and marketing team. Sales professionals in the Airline industry have deep experience in developing customer relationships. Marketing department at GOL PN N2 can leverage the sales team experience to cultivate customer relationships as GOL PN N2 is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at GOL PN N2, in the dynamic environment of Airline industry it has struggled to respond to the nimble upstart competition. GOL PN N2 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Airline industry
– because of the regulatory requirements in Brazil, GOL PN N2 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 Airline industry.
Capital Spending Reduction
– Even during the low interest decade, GOL PN N2 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 Airline industry using digital technology.
Compensation and incentives
– The revenue per employee of GOL PN N2 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.
Increasing silos among functional specialists
– The organizational structure of GOL PN N2 is dominated by functional specialists. It is not different from other players in the Airline industry, but GOL PN N2 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help GOL PN N2 to focus more on services in the Airline industry rather than just following the product oriented approach.
GOL PN N2 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of GOL PN N2 are -
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 GOL PN N2 in the Airline industry. Now GOL PN N2 can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects GOL PN N2 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– GOL PN N2 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 GOL PN N2 to increase its market reach. GOL PN N2 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.
Creating value in data economy
– The success of analytics program of GOL PN N2 has opened avenues for new revenue streams for the organization in Airline industry. This can help GOL PN N2 to build a more holistic ecosystem for GOL PN N2 products in the Airline industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– GOL PN N2 can improve the customer journey of consumers in the Airline 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for GOL PN N2 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 GOL PN N2 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, GOL PN N2 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, GOL PN N2 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 GOL PN N2 to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– GOL PN N2 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Airline industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. GOL PN N2 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. GOL PN N2 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.
Developing new processes and practices
– GOL PN N2 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.
Building a culture of innovation
– managers at GOL PN N2 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 Airline industry.
Threats GOL PN N2 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of GOL PN N2 are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, GOL PN N2 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 GOL PN N2 prominent markets.
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 GOL PN N2 business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, GOL PN N2 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.
Consumer confidence and its impact on GOL PN N2 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Airline industry are lowering. It can presents GOL PN N2 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Airline 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. GOL PN N2 needs to understand the core reasons impacting the Airline industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– GOL PN N2 has witnessed rapid integration of technology during Covid-19 in the Airline industry. As one of the leading players in the industry, GOL PN N2 needs to keep up with the evolution of technology in the Airline 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.
Environmental challenges
– GOL PN N2 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. GOL PN N2 can take advantage of this fund but it will also bring new competitors in the Airline industry.
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 GOL PN N2.
Increasing wage structure of GOL PN N2
– 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 GOL PN N2.
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.
Shortening product life cycle
– it is one of the major threat that GOL PN N2 is facing in Airline sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– GOL PN N2 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.
Weighted SWOT Analysis of GOL PN N2 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at GOL PN N2 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 GOL PN N2 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 GOL PN N2 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 GOL PN N2 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 GOL PN N2 needs to make to build a sustainable competitive advantage.