Costamare (CMRE) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Costamare (United States)

Based on various researches at Oak Spring University , Costamare is operating in a macro-environment that has been destablized by – increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Costamare

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Costamare can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Costamare, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Costamare 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Costamare can be done for the following purposes –
1. Strategic planning of Costamare
2. Improving business portfolio management of Costamare
3. Assessing feasibility of the new initiative in United States
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Costamare

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Strengths of Costamare | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Costamare are -

Successful track record of launching new products

– Costamare has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Costamare 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.

Innovation driven organization

– Costamare is one of the most innovative firm in Water Transportation sector.

Cross disciplinary teams

– Horizontal connected teams at the Costamare 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.

Diverse revenue streams

– Costamare is present in almost all the verticals within the Water Transportation industry. This has provided Costamare 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

- Costamare 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 Costamare is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Costamare emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– Costamare has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Transportation industry. Secondly the value chain collaborators of Costamare have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Costamare in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Costamare has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Costamare to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Digital Transformation in Water Transportation industry

- digital transformation varies from industry to industry. For Costamare digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Costamare 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.

Training and development

– Costamare 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.

Sustainable margins compare to other players in Water Transportation industry

– Costamare has clearly differentiated products in the market place. This has enabled Costamare to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Costamare to invest into research and development (R&D) and innovation.

Strong track record of project management in the Water Transportation industry

– Costamare is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses of Costamare | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Costamare are -

High bargaining power of channel partners in Water Transportation industry

– because of the regulatory requirements in United States, Costamare 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 Water Transportation industry.

Need for greater diversity

– Costamare 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.

High operating costs

– Compare to the competitors, Costamare has high operating costs in the Water Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Costamare lucrative customers.

Lack of clear differentiation of Costamare products

– To increase the profitability and margins on the products, Costamare needs to provide more differentiated products than what it is currently offering in the marketplace.

Compensation and incentives

– The revenue per employee of Costamare is just above the Water Transportation 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.

Skills based hiring in Water Transportation industry

– The stress on hiring functional specialists at Costamare 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 Costamare is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Costamare needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Costamare to focus more on services in the Water Transportation industry rather than just following the product oriented approach.

Employees’ less understanding of Costamare strategy

– From the outside it seems that the employees of Costamare 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.

Workers concerns about automation

– As automation is fast increasing in the Water Transportation industry, Costamare 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.

Interest costs

– Compare to the competition, Costamare 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.

Slow decision making process

– As mentioned earlier in the report, Costamare has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Transportation industry over the last five years. Costamare 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.

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Costamare Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Costamare are -

Learning at scale

– Online learning technologies has now opened space for Costamare 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, Costamare can use these opportunities to build new business models that can help the communities that Costamare operates in. Secondly it can use opportunities from government spending in Water Transportation sector.

Loyalty marketing

– Costamare 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.

Creating value in data economy

– The success of analytics program of Costamare has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Costamare to build a more holistic ecosystem for Costamare products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Water Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Costamare 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. Costamare 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.

Using analytics as competitive advantage

– Costamare has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Transportation sector. This continuous investment in analytics has enabled Costamare to build a competitive advantage using analytics. The analytics driven competitive advantage can help Costamare to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Costamare can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Costamare in the Water Transportation industry. Now Costamare can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– Costamare can use the latest technology developments to improve its manufacturing and designing process in Water 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.

Developing new processes and practices

– Costamare can develop new processes and procedures in Water Transportation 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.

Leveraging digital technologies

– Costamare 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Costamare in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Transportation industry, and it will provide faster access to the consumers.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Costamare is facing challenges because of the dominance of functional experts in the organization. Costamare can utilize new technology in the field of Water Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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Threats Costamare External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Costamare 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 Costamare in the Water Transportation sector and impact the bottomline of the organization.

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.

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 Costamare 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, Costamare may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Transportation sector.

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. Costamare 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.

Shortening product life cycle

– it is one of the major threat that Costamare is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Costamare needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Costamare with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation 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 Costamare.

High dependence on third party suppliers

– Costamare 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

– Costamare has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Costamare needs to keep up with the evolution of technology in the Water 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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Costamare in Water Transportation industry. The Water 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.

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Weighted SWOT Analysis of Costamare Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Costamare 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 Costamare 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 Costamare 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 Costamare 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 Costamare needs to make to build a sustainable competitive advantage.

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