SWOT Analysis / TOWS Matrix for Diana Shipping (United States)
Based on various researches at Oak Spring University , Diana Shipping is operating in a macro-environment that has been destablized by – there is backlash against globalization, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Diana Shipping can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Diana Shipping, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Diana Shipping 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 Diana Shipping can be done for the following purposes –
1. Strategic planning of Diana Shipping
2. Improving business portfolio management of Diana Shipping
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 Diana Shipping
Strengths of Diana Shipping | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Diana Shipping are -
Operational resilience
– The operational resilience strategy of Diana Shipping 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
– Diana Shipping 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 Diana Shipping have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Diana Shipping has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Diana Shipping 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.
Sustainable margins compare to other players in Water Transportation industry
– Diana Shipping has clearly differentiated products in the market place. This has enabled Diana Shipping to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Diana Shipping to invest into research and development (R&D) and innovation.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Diana Shipping digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Diana Shipping 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.
Low bargaining power of suppliers
– Suppliers of Diana Shipping in the Transportation sector have low bargaining power. Diana Shipping has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Diana Shipping to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Diana Shipping in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Diana Shipping 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.
High brand equity
– Diana Shipping has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Diana Shipping to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Water Transportation
– Diana Shipping is one of the leading players in the Water Transportation industry in United States. Over the years it has not only transformed the business landscape in the Water Transportation industry in United States but also across the existing markets. The ability to lead change has enabled Diana Shipping in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Diana Shipping
– The covid-19 pandemic has put organizational resilience at the centre of everthing Diana Shipping does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Water Transportation industry
– Diana Shipping is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Diana Shipping | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Diana Shipping are -
No frontier risks strategy
– From the 10K / annual statement of Diana Shipping, it seems that company is thinking out the frontier risks that can impact Water Transportation 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.
Compensation and incentives
– The revenue per employee of Diana Shipping 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.
High cash cycle compare to competitors
Diana Shipping has a high cash cycle compare to other players in the Water Transportation industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Diana Shipping products
– To increase the profitability and margins on the products, Diana Shipping needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Diana Shipping 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.
Ability to respond to the competition
– As the decision making is very deliberative at Diana Shipping, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Diana Shipping has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Water Transportation industry, Diana Shipping 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.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Diana Shipping 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.
Capital Spending Reduction
– Even during the low interest decade, Diana Shipping 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.
Slow to strategic competitive environment developments
– As Diana Shipping is one of the leading players in the Water Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Water Transportation industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Diana Shipping is slow explore the new channels of communication. These new channels of communication can help Diana Shipping to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
Diana Shipping Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Diana Shipping are -
Leveraging digital technologies
– Diana Shipping 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.
Developing new processes and practices
– Diana Shipping 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Water Transportation industry, but it has also influenced the consumer preferences. Diana Shipping can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Diana Shipping 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 Diana Shipping to build a competitive advantage using analytics. The analytics driven competitive advantage can help Diana Shipping to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Diana Shipping 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 Water Transportation industry.
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 Diana Shipping in the Water Transportation industry. Now Diana Shipping can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Diana Shipping 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Diana Shipping can use these opportunities to build new business models that can help the communities that Diana Shipping operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
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. Diana Shipping can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Diana Shipping 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.
Buying journey improvements
– Diana Shipping 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Diana Shipping 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.
Creating value in data economy
– The success of analytics program of Diana Shipping has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Diana Shipping to build a more holistic ecosystem for Diana Shipping products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Diana Shipping External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Diana Shipping are -
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 Diana Shipping business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Diana Shipping 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 Diana Shipping.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Diana Shipping 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 Diana Shipping prominent markets.
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. Diana Shipping 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.
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. Diana Shipping can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Diana Shipping 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.
Shortening product life cycle
– it is one of the major threat that Diana Shipping is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing wage structure of Diana Shipping
– 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 Diana Shipping.
Environmental challenges
– Diana Shipping 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. Diana Shipping can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
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. Diana Shipping needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Diana Shipping 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.
Weighted SWOT Analysis of Diana Shipping Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Diana Shipping 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 Diana Shipping 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 Diana Shipping 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 Diana Shipping 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 Diana Shipping needs to make to build a sustainable competitive advantage.