Golden Ocean (GOGL) SWOT Analysis / TOWS Matrix / MBA Resources
Water Transportation
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Golden Ocean (United States)
Based on various researches at Oak Spring University , Golden Ocean is operating in a macro-environment that has been destablized by – geopolitical disruptions, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Golden Ocean can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Golden Ocean, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Golden Ocean 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 Golden Ocean can be done for the following purposes –
1. Strategic planning of Golden Ocean
2. Improving business portfolio management of Golden Ocean
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 Golden Ocean
Strengths of Golden Ocean | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Golden Ocean are -
Superior customer experience
– The customer experience strategy of Golden Ocean in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Water Transportation industry
– Golden Ocean has clearly differentiated products in the market place. This has enabled Golden Ocean to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Golden Ocean to invest into research and development (R&D) and innovation.
Strong track record of project management in the Water Transportation industry
– Golden Ocean is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Golden Ocean 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 Golden Ocean is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Golden Ocean emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Golden Ocean 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 Golden Ocean have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Golden Ocean has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Golden Ocean 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.
Ability to lead change in Water Transportation
– Golden Ocean 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 Golden Ocean in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Golden Ocean is present in almost all the verticals within the Water Transportation industry. This has provided Golden Ocean 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 Golden Ocean in the Transportation sector have low bargaining power. Golden Ocean has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Golden Ocean to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Golden Ocean digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Golden Ocean 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.
Successful track record of launching new products
– Golden Ocean has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Golden Ocean 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.
Innovation driven organization
– Golden Ocean is one of the most innovative firm in Water Transportation sector.
Weaknesses of Golden Ocean | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Golden Ocean are -
Interest costs
– Compare to the competition, Golden Ocean 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 dependence on Golden Ocean ‘s star products
– The top 2 products and services of Golden Ocean 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 Golden Ocean has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Golden Ocean 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 Golden Ocean can leverage the sales team experience to cultivate customer relationships as Golden Ocean is planning to shift buying processes online.
Need for greater diversity
– Golden Ocean 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.
No frontier risks strategy
– From the 10K / annual statement of Golden Ocean, 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.
Increasing silos among functional specialists
– The organizational structure of Golden Ocean is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Golden Ocean needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Golden Ocean to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Employees’ less understanding of Golden Ocean strategy
– From the outside it seems that the employees of Golden Ocean 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 Golden Ocean, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Golden Ocean has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Golden Ocean 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.
Capital Spending Reduction
– Even during the low interest decade, Golden Ocean 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.
Workers concerns about automation
– As automation is fast increasing in the Water Transportation industry, Golden Ocean 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.
Golden Ocean Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Golden Ocean are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Golden Ocean is facing challenges because of the dominance of functional experts in the organization. Golden Ocean 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.
Learning at scale
– Online learning technologies has now opened space for Golden Ocean 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.
Developing new processes and practices
– Golden Ocean 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.
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 Golden Ocean 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.
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. Golden Ocean can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Golden Ocean has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Golden Ocean to build a more holistic ecosystem for Golden Ocean products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Golden Ocean 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.
Manufacturing automation
– Golden Ocean 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.
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. Golden Ocean 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. Golden Ocean 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
– Golden Ocean 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Golden Ocean 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 Golden Ocean to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Golden Ocean 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Golden Ocean can use these opportunities to build new business models that can help the communities that Golden Ocean operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Threats Golden Ocean External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Golden Ocean 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. Golden Ocean can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Golden Ocean 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Golden Ocean 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.
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 Golden Ocean 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.
Increasing wage structure of Golden Ocean
– 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 Golden Ocean.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Golden Ocean 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Golden Ocean with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
Stagnating economy with rate increase
– Golden Ocean 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.
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. Golden Ocean needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Golden Ocean is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Golden Ocean.
High dependence on third party suppliers
– Golden Ocean 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.
Weighted SWOT Analysis of Golden Ocean Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Golden Ocean 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 Golden Ocean 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 Golden Ocean 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 Golden Ocean 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 Golden Ocean needs to make to build a sustainable competitive advantage.