SWOT Analysis / TOWS Matrix for Pangaea Logistic (United States)
Based on various researches at Oak Spring University , Pangaea Logistic is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, wage bills are increasing, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, increasing transportation and logistics costs,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pangaea Logistic can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pangaea Logistic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pangaea Logistic 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 Pangaea Logistic can be done for the following purposes –
1. Strategic planning of Pangaea Logistic
2. Improving business portfolio management of Pangaea Logistic
3. Assessing feasibility of the new initiative in United States
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pangaea Logistic
Strengths of Pangaea Logistic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pangaea Logistic are -
Ability to recruit top talent
– Pangaea Logistic is one of the leading players in the Trucking 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.
Superior customer experience
– The customer experience strategy of Pangaea Logistic in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Pangaea Logistic is one of the most innovative firm in Trucking sector.
Diverse revenue streams
– Pangaea Logistic is present in almost all the verticals within the Trucking industry. This has provided Pangaea Logistic 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.
High brand equity
– Pangaea Logistic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pangaea Logistic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Pangaea Logistic 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 Pangaea Logistic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pangaea Logistic emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Pangaea Logistic comprises – understanding the underlying the factors in the Trucking 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.
Sustainable margins compare to other players in Trucking industry
– Pangaea Logistic has clearly differentiated products in the market place. This has enabled Pangaea Logistic to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped Pangaea Logistic to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Pangaea Logistic has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Pangaea Logistic staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Pangaea Logistic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pangaea Logistic 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.
Strong track record of project management in the Trucking industry
– Pangaea Logistic is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For Pangaea Logistic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pangaea Logistic 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.
Weaknesses of Pangaea Logistic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pangaea Logistic are -
Increasing silos among functional specialists
– The organizational structure of Pangaea Logistic is dominated by functional specialists. It is not different from other players in the Trucking industry, but Pangaea Logistic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pangaea Logistic to focus more on services in the Trucking industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Pangaea Logistic is just above the Trucking 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.
Slow to strategic competitive environment developments
– As Pangaea Logistic is one of the leading players in the Trucking industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Trucking industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Pangaea Logistic 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 Trucking industry using digital technology.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Pangaea Logistic 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.
High cash cycle compare to competitors
Pangaea Logistic has a high cash cycle compare to other players in the Trucking 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 Pangaea Logistic ‘s star products
– The top 2 products and services of Pangaea Logistic still accounts for major business revenue. This dependence on star products in Trucking industry has resulted into insufficient focus on developing new products, even though Pangaea Logistic has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Pangaea Logistic 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.
No frontier risks strategy
– From the 10K / annual statement of Pangaea Logistic, it seems that company is thinking out the frontier risks that can impact Trucking 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.
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, Pangaea Logistic 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.
Lack of clear differentiation of Pangaea Logistic products
– To increase the profitability and margins on the products, Pangaea Logistic needs to provide more differentiated products than what it is currently offering in the marketplace.
Pangaea Logistic Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pangaea Logistic are -
Learning at scale
– Online learning technologies has now opened space for Pangaea Logistic 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pangaea Logistic is facing challenges because of the dominance of functional experts in the organization. Pangaea Logistic can utilize new technology in the field of Trucking industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 Pangaea Logistic 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.
Using analytics as competitive advantage
– Pangaea Logistic has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled Pangaea Logistic to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pangaea Logistic 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, Pangaea Logistic can use these opportunities to build new business models that can help the communities that Pangaea Logistic operates in. Secondly it can use opportunities from government spending in Trucking 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. Pangaea Logistic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Pangaea Logistic can develop new processes and procedures in Trucking 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.
Leveraging digital technologies
– Pangaea Logistic 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pangaea Logistic 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. Pangaea Logistic 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pangaea Logistic 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 Pangaea Logistic to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pangaea Logistic in the Trucking industry. Now Pangaea Logistic can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Pangaea Logistic 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 Trucking industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pangaea Logistic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Pangaea Logistic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pangaea Logistic are -
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 Pangaea Logistic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Pangaea Logistic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
Stagnating economy with rate increase
– Pangaea Logistic 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 Trucking industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pangaea Logistic in Trucking industry. The Trucking 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.
Regulatory challenges
– Pangaea Logistic 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 Trucking industry regulations.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pangaea Logistic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Pangaea Logistic in the Trucking sector and impact the bottomline of the organization.
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. Pangaea Logistic needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
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. Pangaea Logistic 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.
Shortening product life cycle
– it is one of the major threat that Pangaea Logistic is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Pangaea Logistic may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pangaea Logistic 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 Pangaea Logistic prominent markets.
Consumer confidence and its impact on Pangaea Logistic 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 Trucking industry and other sectors.
Weighted SWOT Analysis of Pangaea Logistic Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pangaea Logistic 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 Pangaea Logistic 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 Pangaea Logistic 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 Pangaea Logistic 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 Pangaea Logistic needs to make to build a sustainable competitive advantage.