Based on various researches at Oak Spring University , TFI Intl is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, technology disruption, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
wage bills are increasing, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that TFI Intl can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the TFI Intl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which TFI Intl 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 TFI Intl can be done for the following purposes –
1. Strategic planning of TFI Intl
2. Improving business portfolio management of TFI Intl
3. Assessing feasibility of the new initiative in Canada
4. Making a Air Courier sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of TFI Intl
Strengths of TFI Intl | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of TFI Intl are -
Diverse revenue streams
– TFI Intl is present in almost all the verticals within the Air Courier industry. This has provided TFI Intl 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 TFI Intl in the Transportation sector have low bargaining power. TFI Intl has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps TFI Intl to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of TFI Intl 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.
Organizational Resilience of TFI Intl
– The covid-19 pandemic has put organizational resilience at the centre of everthing TFI Intl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– TFI Intl 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 Air Courier industry
– TFI Intl has clearly differentiated products in the market place. This has enabled TFI Intl to fetch slight price premium compare to the competitors in the Air Courier industry. The sustainable margins have also helped TFI Intl to invest into research and development (R&D) and innovation.
Strong track record of project management in the Air Courier industry
– TFI Intl 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 TFI Intl 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.
Superior customer experience
– The customer experience strategy of TFI Intl in Air Courier industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that TFI Intl 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.
Learning organization
- TFI Intl 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 TFI Intl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at TFI Intl emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– TFI Intl 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 TFI Intl have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of TFI Intl | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TFI Intl are -
Capital Spending Reduction
– Even during the low interest decade, TFI Intl 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.
Increasing silos among functional specialists
– The organizational structure of TFI Intl is dominated by functional specialists. It is not different from other players in the Air Courier industry, but TFI Intl needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help TFI Intl to focus more on services in the Air Courier industry rather than just following the product oriented approach.
High cash cycle compare to competitors
TFI Intl has a high cash cycle compare to other players in the Air Courier 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
– TFI Intl 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.
Aligning sales with marketing
– From the outside it seems that TFI Intl 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 TFI Intl can leverage the sales team experience to cultivate customer relationships as TFI Intl is planning to shift buying processes online.
Interest costs
– Compare to the competition, TFI Intl 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.
High operating costs
– Compare to the competitors, TFI Intl 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 TFI Intl lucrative customers.
Skills based hiring in Air Courier industry
– The stress on hiring functional specialists at TFI Intl 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, TFI Intl is slow explore the new channels of communication. These new channels of communication can help TFI Intl to provide better information regarding Air Courier products and services. It can also build an online community to further reach out to potential customers.
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 TFI Intl supply chain. Even after few cautionary changes, TFI Intl is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left TFI Intl vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As TFI Intl 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.
TFI Intl Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of TFI Intl are -
Low interest rates
– Even though inflation is raising its head in most developed economies, TFI Intl 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for TFI Intl 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, TFI Intl is facing challenges because of the dominance of functional experts in the organization. TFI Intl 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.
Learning at scale
– Online learning technologies has now opened space for TFI Intl 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.
Leveraging digital technologies
– TFI Intl 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.
Building a culture of innovation
– managers at TFI Intl 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 Air Courier industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects TFI Intl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– TFI Intl 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 TFI Intl to build a competitive advantage using analytics. The analytics driven competitive advantage can help TFI Intl to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 TFI Intl in the Air Courier industry. Now TFI Intl can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for TFI Intl 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 TFI Intl to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, TFI Intl can use these opportunities to build new business models that can help the communities that TFI Intl operates in. Secondly it can use opportunities from government spending in Air Courier sector.
Better consumer reach
– The expansion of the 5G network will help TFI Intl to increase its market reach. TFI Intl 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.
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 TFI Intl 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 TFI Intl External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of TFI Intl are -
Regulatory challenges
– TFI Intl 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 Air Courier industry regulations.
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. TFI Intl 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, TFI Intl 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.
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. TFI Intl can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– TFI Intl has witnessed rapid integration of technology during Covid-19 in the Air Courier industry. As one of the leading players in the industry, TFI Intl 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.
High dependence on third party suppliers
– TFI Intl 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.
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 TFI Intl.
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 TFI Intl business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– TFI Intl 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.
Shortening product life cycle
– it is one of the major threat that TFI Intl is facing in Air Courier sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of TFI Intl
– 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 TFI Intl.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, TFI Intl 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 TFI Intl prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for TFI Intl 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.
Weighted SWOT Analysis of TFI Intl Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at TFI Intl 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 TFI Intl 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 TFI Intl 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 TFI Intl 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 TFI Intl needs to make to build a sustainable competitive advantage.