Based on various researches at Oak Spring University , DHT Holdings Inc is operating in a macro-environment that has been destablized by – technology disruption, geopolitical disruptions, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, wage bills are increasing, there is backlash against globalization, increasing commodity prices,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that DHT Holdings Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the DHT Holdings Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which DHT Holdings Inc 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 DHT Holdings Inc can be done for the following purposes –
1. Strategic planning of DHT Holdings Inc
2. Improving business portfolio management of DHT Holdings Inc
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 DHT Holdings Inc
Strengths of DHT Holdings Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of DHT Holdings Inc are -
Superior customer experience
– The customer experience strategy of DHT Holdings Inc in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– DHT Holdings Inc is one of the leading players in the Water Transportation 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.
Cross disciplinary teams
– Horizontal connected teams at the DHT Holdings Inc 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.
Strong track record of project management in the Water Transportation industry
– DHT Holdings Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– DHT Holdings Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – DHT Holdings Inc staying ahead in the Water Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– DHT Holdings Inc 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 Water Transportation 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.
High switching costs
– The high switching costs that DHT Holdings Inc 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.
Sustainable margins compare to other players in Water Transportation industry
– DHT Holdings Inc has clearly differentiated products in the market place. This has enabled DHT Holdings Inc to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped DHT Holdings Inc to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of DHT Holdings Inc comprises – understanding the underlying the factors in the Water Transportation 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.
Highly skilled collaborators
– DHT Holdings Inc 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 DHT Holdings Inc have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– DHT Holdings Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled DHT Holdings Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– DHT Holdings Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. DHT Holdings Inc 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.
Weaknesses of DHT Holdings Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DHT Holdings Inc are -
Aligning sales with marketing
– From the outside it seems that DHT Holdings Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Water Transportation industry have deep experience in developing customer relationships. Marketing department at DHT Holdings Inc can leverage the sales team experience to cultivate customer relationships as DHT Holdings Inc is planning to shift buying processes online.
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 DHT Holdings Inc supply chain. Even after few cautionary changes, DHT Holdings Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left DHT Holdings Inc vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of DHT Holdings Inc is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but DHT Holdings Inc needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help DHT Holdings Inc to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Products dominated business model
– Even though DHT Holdings Inc has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. DHT Holdings Inc should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of DHT Holdings Inc strategy
– From the outside it seems that the employees of DHT Holdings Inc 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.
Ability to respond to the competition
– As the decision making is very deliberative at DHT Holdings Inc, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. DHT Holdings Inc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, DHT Holdings Inc 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 DHT Holdings Inc lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, DHT Holdings Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on DHT Holdings Inc ‘s star products
– The top 2 products and services of DHT Holdings Inc still accounts for major business revenue. This dependence on star products in Water Transportation industry has resulted into insufficient focus on developing new products, even though DHT Holdings Inc has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, DHT Holdings Inc 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 Water Transportation industry using digital technology.
High bargaining power of channel partners in Water Transportation industry
– because of the regulatory requirements in United States, DHT Holdings Inc 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.
DHT Holdings Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of DHT Holdings Inc 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. DHT Holdings Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help DHT Holdings Inc to increase its market reach. DHT Holdings Inc 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.
Buying journey improvements
– DHT Holdings Inc can improve the customer journey of consumers in the Water Transportation 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.
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 DHT Holdings Inc in the Water Transportation industry. Now DHT Holdings Inc 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 DHT Holdings Inc 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 DHT Holdings Inc to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for DHT Holdings Inc 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, DHT Holdings Inc 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.
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. DHT Holdings Inc 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. DHT Holdings Inc 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.
Leveraging digital technologies
– DHT Holdings Inc 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, DHT Holdings Inc can use these opportunities to build new business models that can help the communities that DHT Holdings Inc operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
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 DHT Holdings Inc 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects DHT Holdings Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, DHT Holdings Inc 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 DHT Holdings Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats DHT Holdings Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of DHT Holdings Inc are -
Easy access to finance
– Easy access to finance in Water Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. DHT Holdings Inc 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 DHT Holdings Inc
– 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 DHT Holdings Inc.
Stagnating economy with rate increase
– DHT Holdings Inc 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 Water Transportation industry.
Shortening product life cycle
– it is one of the major threat that DHT Holdings Inc is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– DHT Holdings Inc 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 Water Transportation industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, DHT Holdings Inc 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 DHT Holdings Inc prominent markets.
Environmental challenges
– DHT Holdings Inc 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. DHT Holdings Inc can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
High dependence on third party suppliers
– DHT Holdings Inc 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.
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 DHT Holdings Inc 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents DHT Holdings Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for DHT Holdings Inc 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.
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. DHT Holdings Inc needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Weighted SWOT Analysis of DHT Holdings Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at DHT Holdings Inc 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 DHT Holdings Inc 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 DHT Holdings Inc 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 DHT Holdings Inc 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 DHT Holdings Inc needs to make to build a sustainable competitive advantage.