Element Fleet (EFN) SWOT Analysis / TOWS Matrix / MBA Resources
Rental & Leasing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Element Fleet (Canada)
Based on various researches at Oak Spring University , Element Fleet is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing energy prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Element Fleet can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Element Fleet, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Element Fleet 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 Element Fleet can be done for the following purposes –
1. Strategic planning of Element Fleet
2. Improving business portfolio management of Element Fleet
3. Assessing feasibility of the new initiative in Canada
4. Making a Rental & Leasing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Element Fleet
Strengths of Element Fleet | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Element Fleet are -
High brand equity
– Element Fleet has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Element Fleet to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Element Fleet in Rental & Leasing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Rental & Leasing industry
- digital transformation varies from industry to industry. For Element Fleet digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Element Fleet 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.
Operational resilience
– The operational resilience strategy of Element Fleet comprises – understanding the underlying the factors in the Rental & Leasing 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.
Low bargaining power of suppliers
– Suppliers of Element Fleet in the Services sector have low bargaining power. Element Fleet has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Element Fleet to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Element Fleet is one of the most innovative firm in Rental & Leasing sector.
Sustainable margins compare to other players in Rental & Leasing industry
– Element Fleet has clearly differentiated products in the market place. This has enabled Element Fleet to fetch slight price premium compare to the competitors in the Rental & Leasing industry. The sustainable margins have also helped Element Fleet to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Element Fleet 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
– Element Fleet has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Rental & Leasing industry. Secondly the value chain collaborators of Element Fleet have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Element Fleet 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 Element Fleet is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Element Fleet emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Element Fleet is present in almost all the verticals within the Rental & Leasing industry. This has provided Element Fleet 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.
Organizational Resilience of Element Fleet
– The covid-19 pandemic has put organizational resilience at the centre of everthing Element Fleet does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Element Fleet | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Element Fleet are -
Skills based hiring in Rental & Leasing industry
– The stress on hiring functional specialists at Element Fleet 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.
Workers concerns about automation
– As automation is fast increasing in the Rental & Leasing industry, Element Fleet 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.
Aligning sales with marketing
– From the outside it seems that Element Fleet needs to have more collaboration between its sales team and marketing team. Sales professionals in the Rental & Leasing industry have deep experience in developing customer relationships. Marketing department at Element Fleet can leverage the sales team experience to cultivate customer relationships as Element Fleet is planning to shift buying processes online.
High dependence on Element Fleet ‘s star products
– The top 2 products and services of Element Fleet still accounts for major business revenue. This dependence on star products in Rental & Leasing industry has resulted into insufficient focus on developing new products, even though Element Fleet has relatively successful track record of launching new products.
Lack of clear differentiation of Element Fleet products
– To increase the profitability and margins on the products, Element Fleet needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Element Fleet strategy
– From the outside it seems that the employees of Element Fleet 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.
Increasing silos among functional specialists
– The organizational structure of Element Fleet is dominated by functional specialists. It is not different from other players in the Rental & Leasing industry, but Element Fleet needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Element Fleet to focus more on services in the Rental & Leasing industry rather than just following the product oriented approach.
Products dominated business model
– Even though Element Fleet has some of the most successful models in the Rental & Leasing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Element Fleet should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Element Fleet is slow explore the new channels of communication. These new channels of communication can help Element Fleet to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Element Fleet 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 bargaining power of channel partners in Rental & Leasing industry
– because of the regulatory requirements in Canada, Element Fleet 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 Rental & Leasing industry.
Element Fleet Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Element Fleet are -
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. Element Fleet can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Element Fleet 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Element Fleet is facing challenges because of the dominance of functional experts in the organization. Element Fleet can utilize new technology in the field of Rental & Leasing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Element Fleet has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help Element Fleet to build a more holistic ecosystem for Element Fleet products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Element Fleet can use the latest technology developments to improve its manufacturing and designing process in Rental & Leasing 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.
Use of Bitcoin and other crypto currencies for transactions in Rental & Leasing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Element Fleet in the Rental & Leasing industry. Now Element Fleet can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Element Fleet 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 Rental & Leasing industry.
Loyalty marketing
– Element Fleet 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.
Leveraging digital technologies
– Element Fleet 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Element Fleet 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 Element Fleet can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Element Fleet can develop new processes and procedures in Rental & Leasing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Element Fleet in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Rental & Leasing industry, and it will provide faster access to the consumers.
Threats Element Fleet External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Element Fleet are -
High dependence on third party suppliers
– Element Fleet 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.
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. Element Fleet needs to understand the core reasons impacting the Rental & Leasing industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Rental & Leasing industry are lowering. It can presents Element Fleet with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.
Shortening product life cycle
– it is one of the major threat that Element Fleet is facing in Rental & Leasing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Element Fleet 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.
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 Element Fleet business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Element Fleet in the Rental & Leasing sector and impact the bottomline of the organization.
Environmental challenges
– Element Fleet 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. Element Fleet can take advantage of this fund but it will also bring new competitors in the Rental & Leasing industry.
Increasing wage structure of Element Fleet
– 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 Element Fleet.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Element Fleet in Rental & Leasing industry. The Rental & Leasing 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.
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 Element Fleet.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Element Fleet 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 Element Fleet prominent markets.
Weighted SWOT Analysis of Element Fleet Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Element Fleet 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 Element Fleet 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 Element Fleet 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 Element Fleet 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 Element Fleet needs to make to build a sustainable competitive advantage.