Air Transport Services (ATSG) SWOT Analysis / TOWS Matrix / MBA Resources
Air Courier
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Air Transport Services (United States)
Based on various researches at Oak Spring University , Air Transport Services is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, technology disruption,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Air Transport Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Air Transport Services can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Air Transport Services, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Air Transport Services 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 Air Transport Services can be done for the following purposes –
1. Strategic planning of Air Transport Services
2. Improving business portfolio management of Air Transport Services
3. Assessing feasibility of the new initiative in United States
4. Making a Air Courier sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Air Transport Services
Strengths of Air Transport Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Air Transport Services are -
Digital Transformation in Air Courier industry
- digital transformation varies from industry to industry. For Air Transport Services digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Air Transport Services 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.
High brand equity
– Air Transport Services has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Air Transport Services to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Air Transport Services 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.
Highly skilled collaborators
– Air Transport Services has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Air Courier industry. Secondly the value chain collaborators of Air Transport Services have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Air Transport Services comprises – understanding the underlying the factors in the Air Courier 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.
Training and development
– Air Transport Services 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.
Ability to recruit top talent
– Air Transport Services is one of the leading players in the Air Courier industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Air Transport Services in Air Courier 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 Air Courier industry
– Air Transport Services is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Air Transport Services 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.
Learning organization
- Air Transport Services 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 Air Transport Services is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Air Transport Services emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Air Transport Services is one of the most innovative firm in Air Courier sector.
Weaknesses of Air Transport Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Air Transport Services are -
High operating costs
– Compare to the competitors, Air Transport Services has high operating costs in the Air Courier industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Air Transport Services lucrative customers.
Products dominated business model
– Even though Air Transport Services has some of the most successful models in the Air Courier industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Air Transport Services 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 Air Transport Services supply chain. Even after few cautionary changes, Air Transport Services is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Air Transport Services vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Air Transport Services is dominated by functional specialists. It is not different from other players in the Air Courier industry, but Air Transport Services needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Air Transport Services to focus more on services in the Air Courier industry rather than just following the product oriented approach.
High bargaining power of channel partners in Air Courier industry
– because of the regulatory requirements in United States, Air Transport Services 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 Air Courier industry.
Slow decision making process
– As mentioned earlier in the report, Air Transport Services has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Air Courier industry over the last five years. Air Transport Services 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.
Capital Spending Reduction
– Even during the low interest decade, Air Transport Services 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 Air Courier industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Air Courier industry, Air Transport Services 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.
Slow to strategic competitive environment developments
– As Air Transport Services is one of the leading players in the Air Courier industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Air Courier industry in last five years.
High dependence on Air Transport Services ‘s star products
– The top 2 products and services of Air Transport Services still accounts for major business revenue. This dependence on star products in Air Courier industry has resulted into insufficient focus on developing new products, even though Air Transport Services has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Air Transport Services needs to have more collaboration between its sales team and marketing team. Sales professionals in the Air Courier industry have deep experience in developing customer relationships. Marketing department at Air Transport Services can leverage the sales team experience to cultivate customer relationships as Air Transport Services is planning to shift buying processes online.
Air Transport Services Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Air Transport Services are -
Better consumer reach
– The expansion of the 5G network will help Air Transport Services to increase its market reach. Air Transport Services 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.
Learning at scale
– Online learning technologies has now opened space for Air Transport Services 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Air Transport Services can use these opportunities to build new business models that can help the communities that Air Transport Services operates in. Secondly it can use opportunities from government spending in Air Courier sector.
Manufacturing automation
– Air Transport Services can use the latest technology developments to improve its manufacturing and designing process in Air Courier 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Air Transport Services can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Air Transport Services in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Air Courier industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Air Transport Services 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Air Transport Services is facing challenges because of the dominance of functional experts in the organization. Air Transport Services can utilize new technology in the field of Air Courier industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Air Courier industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Air Transport Services in the Air Courier industry. Now Air Transport Services can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Air Transport Services 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.
Developing new processes and practices
– Air Transport Services can develop new processes and procedures in Air Courier 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.
Using analytics as competitive advantage
– Air Transport Services has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Air Courier sector. This continuous investment in analytics has enabled Air Transport Services to build a competitive advantage using analytics. The analytics driven competitive advantage can help Air Transport Services to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Air Transport Services can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Air Transport Services External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Air Transport Services are -
Stagnating economy with rate increase
– Air Transport Services 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 Air Courier industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Air Transport Services may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Air Courier sector.
Technology acceleration in Forth Industrial Revolution
– Air Transport Services has witnessed rapid integration of technology during Covid-19 in the Air Courier industry. As one of the leading players in the industry, Air Transport Services needs to keep up with the evolution of technology in the Air Courier 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.
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.
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 Air Transport Services business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Air Courier industry are lowering. It can presents Air Transport Services with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Air Courier sector.
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 Air Transport Services.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Air Transport Services 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 Air Transport Services prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Air Transport Services in Air Courier industry. The Air Courier 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.
High dependence on third party suppliers
– Air Transport Services 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.
Easy access to finance
– Easy access to finance in Air Courier industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Air Transport Services can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Air Transport Services
– 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 Air Transport Services.
Consumer confidence and its impact on Air Transport Services 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 Air Courier industry and other sectors.
Weighted SWOT Analysis of Air Transport Services Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Air Transport Services 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 Air Transport Services 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 Air Transport Services 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 Air Transport Services 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 Air Transport Services needs to make to build a sustainable competitive advantage.