Nordic American Tankers (NAT) SWOT Analysis / TOWS Matrix / MBA Resources
Water Transportation
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Nordic American Tankers (United States)
Based on various researches at Oak Spring University , Nordic American Tankers is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing commodity prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, technology disruption,
supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Nordic American Tankers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nordic American Tankers can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nordic American Tankers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nordic American Tankers 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 Nordic American Tankers can be done for the following purposes –
1. Strategic planning of Nordic American Tankers
2. Improving business portfolio management of Nordic American Tankers
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 Nordic American Tankers
Strengths of Nordic American Tankers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nordic American Tankers are -
Sustainable margins compare to other players in Water Transportation industry
– Nordic American Tankers has clearly differentiated products in the market place. This has enabled Nordic American Tankers to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Nordic American Tankers to invest into research and development (R&D) and innovation.
Analytics focus
– Nordic American Tankers 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 Nordic American Tankers 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.
Innovation driven organization
– Nordic American Tankers is one of the most innovative firm in Water Transportation sector.
Successful track record of launching new products
– Nordic American Tankers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nordic American Tankers 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.
Low bargaining power of suppliers
– Suppliers of Nordic American Tankers in the Transportation sector have low bargaining power. Nordic American Tankers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nordic American Tankers to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Nordic American Tankers 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 Nordic American Tankers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nordic American Tankers emphasize – knowledge, initiative, and innovation.
Training and development
– Nordic American Tankers 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.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Nordic American Tankers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nordic American Tankers 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.
Superior customer experience
– The customer experience strategy of Nordic American Tankers in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Nordic American Tankers has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nordic American Tankers 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.
Diverse revenue streams
– Nordic American Tankers is present in almost all the verticals within the Water Transportation industry. This has provided Nordic American Tankers 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.
Weaknesses of Nordic American Tankers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nordic American Tankers are -
Ability to respond to the competition
– As the decision making is very deliberative at Nordic American Tankers, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Nordic American Tankers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Nordic American Tankers 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.
Capital Spending Reduction
– Even during the low interest decade, Nordic American Tankers 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, Nordic American Tankers 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.
High operating costs
– Compare to the competitors, Nordic American Tankers 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 Nordic American Tankers lucrative customers.
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 Nordic American Tankers supply chain. Even after few cautionary changes, Nordic American Tankers is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nordic American Tankers vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Nordic American Tankers 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 Nordic American Tankers can leverage the sales team experience to cultivate customer relationships as Nordic American Tankers is planning to shift buying processes online.
Employees’ less understanding of Nordic American Tankers strategy
– From the outside it seems that the employees of Nordic American Tankers 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.
Workers concerns about automation
– As automation is fast increasing in the Water Transportation industry, Nordic American Tankers 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.
Increasing silos among functional specialists
– The organizational structure of Nordic American Tankers is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Nordic American Tankers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nordic American Tankers to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
High dependence on Nordic American Tankers ‘s star products
– The top 2 products and services of Nordic American Tankers 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 Nordic American Tankers has relatively successful track record of launching new products.
Nordic American Tankers Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nordic American Tankers are -
Using analytics as competitive advantage
– Nordic American Tankers 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 Nordic American Tankers to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nordic American Tankers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nordic American Tankers can use these opportunities to build new business models that can help the communities that Nordic American Tankers operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Learning at scale
– Online learning technologies has now opened space for Nordic American Tankers 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.
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. Nordic American Tankers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Nordic American Tankers 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nordic American Tankers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nordic American Tankers 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 Nordic American Tankers to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nordic American Tankers 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 Nordic American Tankers to hire the very best people irrespective of their geographical location.
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. Nordic American Tankers 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 Nordic American Tankers has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Nordic American Tankers to build a more holistic ecosystem for Nordic American Tankers products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Nordic American Tankers 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.
Manufacturing automation
– Nordic American Tankers 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nordic American Tankers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Nordic American Tankers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nordic American Tankers are -
Increasing wage structure of Nordic American Tankers
– 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 Nordic American Tankers.
Consumer confidence and its impact on Nordic American Tankers demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Water Transportation industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Nordic American Tankers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
High dependence on third party suppliers
– Nordic American Tankers 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nordic American Tankers 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nordic American Tankers 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 Nordic American Tankers prominent markets.
Stagnating economy with rate increase
– Nordic American Tankers 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.
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. Nordic American Tankers 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.
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. Nordic American Tankers needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Environmental challenges
– Nordic American Tankers 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. Nordic American Tankers can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
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.
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 Nordic American Tankers in the Water Transportation sector and impact the bottomline of the organization.
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 Nordic American Tankers.
Weighted SWOT Analysis of Nordic American Tankers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nordic American Tankers 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 Nordic American Tankers 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 Nordic American Tankers 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 Nordic American Tankers 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 Nordic American Tankers needs to make to build a sustainable competitive advantage.