Based on various researches at Oak Spring University , COSCO SHIPPING ADR is operating in a macro-environment that has been destablized by – wage bills are increasing, technology disruption, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of COSCO SHIPPING ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that COSCO SHIPPING ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the COSCO SHIPPING ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which COSCO SHIPPING ADR 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 COSCO SHIPPING ADR can be done for the following purposes –
1. Strategic planning of COSCO SHIPPING ADR
2. Improving business portfolio management of COSCO SHIPPING ADR
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of COSCO SHIPPING ADR
Strengths of COSCO SHIPPING ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of COSCO SHIPPING ADR are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For COSCO SHIPPING ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. COSCO SHIPPING ADR 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
– COSCO SHIPPING ADR has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of COSCO SHIPPING ADR have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– COSCO SHIPPING ADR is one of the leading players in the 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.
Learning organization
- COSCO SHIPPING ADR 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 COSCO SHIPPING ADR is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at COSCO SHIPPING ADR emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– COSCO SHIPPING ADR has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. COSCO SHIPPING ADR 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.
Diverse revenue streams
– COSCO SHIPPING ADR is present in almost all the verticals within the industry. This has provided COSCO SHIPPING ADR 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.
Low bargaining power of suppliers
– Suppliers of COSCO SHIPPING ADR in the sector have low bargaining power. COSCO SHIPPING ADR has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps COSCO SHIPPING ADR to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the industry
– COSCO SHIPPING ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in
– COSCO SHIPPING ADR is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled COSCO SHIPPING ADR in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– COSCO SHIPPING ADR has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – COSCO SHIPPING ADR staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in industry
– COSCO SHIPPING ADR has clearly differentiated products in the market place. This has enabled COSCO SHIPPING ADR to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped COSCO SHIPPING ADR to invest into research and development (R&D) and innovation.
Analytics focus
– COSCO SHIPPING ADR 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 industry. The technology infrastructure of United States 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 COSCO SHIPPING ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of COSCO SHIPPING ADR are -
No frontier risks strategy
– From the 10K / annual statement of COSCO SHIPPING ADR, it seems that company is thinking out the frontier risks that can impact 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.
Products dominated business model
– Even though COSCO SHIPPING ADR has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. COSCO SHIPPING ADR should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, COSCO SHIPPING ADR 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 industry.
Capital Spending Reduction
– Even during the low interest decade, COSCO SHIPPING ADR 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 industry using digital technology.
High dependence on COSCO SHIPPING ADR ‘s star products
– The top 2 products and services of COSCO SHIPPING ADR still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though COSCO SHIPPING ADR has relatively successful track record of launching new products.
High cash cycle compare to competitors
COSCO SHIPPING ADR has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– COSCO SHIPPING ADR 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.
Interest costs
– Compare to the competition, COSCO SHIPPING ADR 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.
Increasing silos among functional specialists
– The organizational structure of COSCO SHIPPING ADR is dominated by functional specialists. It is not different from other players in the industry, but COSCO SHIPPING ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help COSCO SHIPPING ADR to focus more on services in the industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, COSCO SHIPPING ADR has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract COSCO SHIPPING ADR lucrative customers.
Lack of clear differentiation of COSCO SHIPPING ADR products
– To increase the profitability and margins on the products, COSCO SHIPPING ADR needs to provide more differentiated products than what it is currently offering in the marketplace.
COSCO SHIPPING ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of COSCO SHIPPING ADR are -
Better consumer reach
– The expansion of the 5G network will help COSCO SHIPPING ADR to increase its market reach. COSCO SHIPPING ADR 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for COSCO SHIPPING ADR in the industry. Now COSCO SHIPPING ADR can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– COSCO SHIPPING ADR has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled COSCO SHIPPING ADR to build a competitive advantage using analytics. The analytics driven competitive advantage can help COSCO SHIPPING ADR to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, COSCO SHIPPING ADR 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 COSCO SHIPPING ADR to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, COSCO SHIPPING ADR can use these opportunities to build new business models that can help the communities that COSCO SHIPPING ADR operates in. Secondly it can use opportunities from government spending in sector.
Buying journey improvements
– COSCO SHIPPING ADR can improve the customer journey of consumers in the 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 COSCO SHIPPING ADR 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 COSCO SHIPPING ADR to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. COSCO SHIPPING ADR can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. COSCO SHIPPING ADR 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. COSCO SHIPPING ADR 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.
Building a culture of innovation
– managers at COSCO SHIPPING ADR 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 industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, COSCO SHIPPING ADR 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects COSCO SHIPPING ADR can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help COSCO SHIPPING ADR to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats COSCO SHIPPING ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of COSCO SHIPPING ADR are -
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 COSCO SHIPPING ADR in the sector and impact the bottomline of the organization.
Environmental challenges
– COSCO SHIPPING ADR 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. COSCO SHIPPING ADR can take advantage of this fund but it will also bring new competitors in the industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, COSCO SHIPPING ADR 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 COSCO SHIPPING ADR prominent markets.
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. COSCO SHIPPING ADR needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
High dependence on third party suppliers
– COSCO SHIPPING ADR 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.
Technology acceleration in Forth Industrial Revolution
– COSCO SHIPPING ADR has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, COSCO SHIPPING ADR needs to keep up with the evolution of technology in the 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.
Consumer confidence and its impact on COSCO SHIPPING ADR 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 industry and other sectors.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents COSCO SHIPPING ADR with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– COSCO SHIPPING ADR 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 industry regulations.
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 COSCO SHIPPING ADR business can come under increasing regulations regarding data privacy, data security, 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 COSCO SHIPPING ADR.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. COSCO SHIPPING ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of COSCO SHIPPING ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at COSCO SHIPPING ADR 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 COSCO SHIPPING ADR 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 COSCO SHIPPING ADR 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 COSCO SHIPPING ADR 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 COSCO SHIPPING ADR needs to make to build a sustainable competitive advantage.
