Based on various researches at Oak Spring University , Genco Shipping Trading is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, increasing energy prices, etc
Introduction to SWOT Analysis of Genco Shipping Trading
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Genco Shipping Trading can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Genco Shipping Trading, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Genco Shipping Trading 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 Genco Shipping Trading can be done for the following purposes –
1. Strategic planning of Genco Shipping Trading
2. Improving business portfolio management of Genco Shipping Trading
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 Genco Shipping Trading
Strengths of Genco Shipping Trading | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Genco Shipping Trading are -
High switching costs
– The high switching costs that Genco Shipping Trading 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.
Superior customer experience
– The customer experience strategy of Genco Shipping Trading in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Genco Shipping Trading has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Genco Shipping Trading to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Genco Shipping Trading 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.
Sustainable margins compare to other players in Water Transportation industry
– Genco Shipping Trading has clearly differentiated products in the market place. This has enabled Genco Shipping Trading to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Genco Shipping Trading to invest into research and development (R&D) and innovation.
Strong track record of project management in the Water Transportation industry
– Genco Shipping Trading is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Genco Shipping Trading
– The covid-19 pandemic has put organizational resilience at the centre of everthing Genco Shipping Trading does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Genco Shipping Trading has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Genco Shipping Trading 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.
Effective Research and Development (R&D)
– Genco Shipping Trading has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Genco Shipping Trading 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.
Cross disciplinary teams
– Horizontal connected teams at the Genco Shipping Trading 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.
Innovation driven organization
– Genco Shipping Trading is one of the most innovative firm in Water Transportation sector.
Operational resilience
– The operational resilience strategy of Genco Shipping Trading 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.
Weaknesses of Genco Shipping Trading | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Genco Shipping Trading are -
Products dominated business model
– Even though Genco Shipping Trading 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. Genco Shipping Trading should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Genco Shipping Trading 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.
Lack of clear differentiation of Genco Shipping Trading products
– To increase the profitability and margins on the products, Genco Shipping Trading needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Genco Shipping Trading ‘s star products
– The top 2 products and services of Genco Shipping Trading 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 Genco Shipping Trading has relatively successful track record of launching new products.
Employees’ less understanding of Genco Shipping Trading strategy
– From the outside it seems that the employees of Genco Shipping Trading 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.
High cash cycle compare to competitors
Genco Shipping Trading 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.
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 Genco Shipping Trading supply chain. Even after few cautionary changes, Genco Shipping Trading is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Genco Shipping Trading vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Genco Shipping Trading, 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.
Ability to respond to the competition
– As the decision making is very deliberative at Genco Shipping Trading, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Genco Shipping Trading has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Genco Shipping Trading 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 Water Transportation industry
– because of the regulatory requirements in United States, Genco Shipping Trading 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.
Genco Shipping Trading Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Genco Shipping Trading are -
Creating value in data economy
– The success of analytics program of Genco Shipping Trading has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Genco Shipping Trading to build a more holistic ecosystem for Genco Shipping Trading products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Genco Shipping Trading 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Genco Shipping Trading 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.
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. Genco Shipping Trading can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Genco Shipping Trading can use these opportunities to build new business models that can help the communities that Genco Shipping Trading operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Genco Shipping Trading 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 Genco Shipping Trading to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Genco Shipping Trading can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Genco Shipping Trading 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.
Buying journey improvements
– Genco Shipping Trading 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Genco Shipping Trading is facing challenges because of the dominance of functional experts in the organization. Genco Shipping Trading 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.
Leveraging digital technologies
– Genco Shipping Trading 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.
Better consumer reach
– The expansion of the 5G network will help Genco Shipping Trading to increase its market reach. Genco Shipping Trading 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.
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. Genco Shipping Trading can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Genco Shipping Trading External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Genco Shipping Trading are -
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.
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. Genco Shipping Trading can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Genco Shipping Trading 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
– Genco Shipping Trading has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Genco Shipping Trading 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.
Environmental challenges
– Genco Shipping Trading 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. Genco Shipping Trading can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Regulatory challenges
– Genco Shipping Trading 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, Genco Shipping Trading 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 Genco Shipping Trading prominent markets.
Increasing wage structure of Genco Shipping Trading
– 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 Genco Shipping Trading.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Genco Shipping Trading 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.
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 Genco Shipping Trading business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Genco Shipping Trading is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Genco Shipping Trading 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.
Weighted SWOT Analysis of Genco Shipping Trading Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Genco Shipping Trading 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 Genco Shipping Trading 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 Genco Shipping Trading 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 Genco Shipping Trading 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 Genco Shipping Trading needs to make to build a sustainable competitive advantage.
