TEGMA ON (TGMA3) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for TEGMA ON (Brazil)
Based on various researches at Oak Spring University , TEGMA ON is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, there is backlash against globalization, increasing household debt because of falling income levels,
wage bills are increasing, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that TEGMA ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the TEGMA ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which TEGMA ON 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 TEGMA ON can be done for the following purposes –
1. Strategic planning of TEGMA ON
2. Improving business portfolio management of TEGMA ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of TEGMA ON
Strengths of TEGMA ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of TEGMA ON are -
Low bargaining power of suppliers
– Suppliers of TEGMA ON in the Transportation sector have low bargaining power. TEGMA ON has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps TEGMA ON to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- TEGMA ON 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 TEGMA ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at TEGMA ON emphasize – knowledge, initiative, and innovation.
Ability to lead change in Trucking
– TEGMA ON is one of the leading players in the Trucking industry in Brazil. Over the years it has not only transformed the business landscape in the Trucking industry in Brazil but also across the existing markets. The ability to lead change has enabled TEGMA ON in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– TEGMA ON 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 TEGMA ON 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.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For TEGMA ON digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. TEGMA ON 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.
Analytics focus
– TEGMA ON 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 Trucking 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.
Operational resilience
– The operational resilience strategy of TEGMA ON comprises – understanding the underlying the factors in the Trucking 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
– TEGMA ON is one of the leading players in the Trucking industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– TEGMA ON is present in almost all the verticals within the Trucking industry. This has provided TEGMA ON 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.
Successful track record of launching new products
– TEGMA ON has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. TEGMA ON 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
– TEGMA ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled TEGMA ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of TEGMA ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TEGMA ON are -
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, TEGMA ON needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Low market penetration in new markets
– Outside its home market of Brazil, TEGMA ON needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of TEGMA ON strategy
– From the outside it seems that the employees of TEGMA ON 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.
High dependence on TEGMA ON ‘s star products
– The top 2 products and services of TEGMA ON still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though TEGMA ON has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that TEGMA ON needs to have more collaboration between its sales team and marketing team. Sales professionals in the Trucking industry have deep experience in developing customer relationships. Marketing department at TEGMA ON can leverage the sales team experience to cultivate customer relationships as TEGMA ON is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of TEGMA ON, it seems that company is thinking out the frontier risks that can impact Trucking 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, TEGMA ON 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.
Lack of clear differentiation of TEGMA ON products
– To increase the profitability and margins on the products, TEGMA ON needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at TEGMA ON 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.
Increasing silos among functional specialists
– The organizational structure of TEGMA ON is dominated by functional specialists. It is not different from other players in the Trucking industry, but TEGMA ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help TEGMA ON to focus more on services in the Trucking industry rather than just following the product oriented approach.
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 TEGMA ON supply chain. Even after few cautionary changes, TEGMA ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left TEGMA ON vulnerable to further global disruptions in South East Asia.
TEGMA ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of TEGMA ON are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. TEGMA ON can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– TEGMA ON can develop new processes and procedures in Trucking 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 TEGMA ON 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 Trucking industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, TEGMA ON 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 TEGMA ON to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for TEGMA ON in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. TEGMA ON 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. TEGMA ON 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects TEGMA ON can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. TEGMA ON can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for TEGMA ON 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.
Buying journey improvements
– TEGMA ON can improve the customer journey of consumers in the Trucking 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.
Leveraging digital technologies
– TEGMA ON 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, TEGMA ON is facing challenges because of the dominance of functional experts in the organization. TEGMA ON can utilize new technology in the field of Trucking industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help TEGMA ON to increase its market reach. TEGMA ON 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.
Threats TEGMA ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of TEGMA ON are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, TEGMA ON may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Increasing wage structure of TEGMA ON
– 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 TEGMA ON.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. TEGMA ON can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– TEGMA ON 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 Trucking industry.
High dependence on third party suppliers
– TEGMA ON 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, TEGMA ON 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 TEGMA ON prominent markets.
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 TEGMA ON in the Trucking sector and impact the bottomline of the organization.
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 TEGMA ON business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– TEGMA ON 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. TEGMA ON can take advantage of this fund but it will also bring new competitors in the Trucking industry.
Consumer confidence and its impact on TEGMA ON 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 Trucking industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for TEGMA ON in Trucking industry. The Trucking 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
– TEGMA ON 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 Trucking industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents TEGMA ON with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
Weighted SWOT Analysis of TEGMA ON Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at TEGMA ON 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 TEGMA ON 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 TEGMA ON 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 TEGMA ON 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 TEGMA ON needs to make to build a sustainable competitive advantage.