Roadrunner (RRTS) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Roadrunner (United States)
Based on various researches at Oak Spring University , Roadrunner is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing household debt because of falling income levels,
there is increasing trade war between United States & China, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Roadrunner can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Roadrunner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Roadrunner 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 Roadrunner can be done for the following purposes –
1. Strategic planning of Roadrunner
2. Improving business portfolio management of Roadrunner
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 Roadrunner
Strengths of Roadrunner | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Roadrunner are -
Operational resilience
– The operational resilience strategy of Roadrunner 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.
Highly skilled collaborators
– Roadrunner has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Roadrunner have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Roadrunner has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Roadrunner 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.
Superior customer experience
– The customer experience strategy of Roadrunner in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Trucking
– Roadrunner is one of the leading players in the Trucking industry in United States. Over the years it has not only transformed the business landscape in the Trucking industry in United States but also across the existing markets. The ability to lead change has enabled Roadrunner in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Trucking industry
– Roadrunner has clearly differentiated products in the market place. This has enabled Roadrunner to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped Roadrunner to invest into research and development (R&D) and innovation.
Training and development
– Roadrunner 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.
Learning organization
- Roadrunner 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 Roadrunner is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Roadrunner emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Roadrunner in the Transportation sector have low bargaining power. Roadrunner has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Roadrunner to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Trucking industry
– Roadrunner is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Roadrunner is one of the most innovative firm in Trucking sector.
Successful track record of launching new products
– Roadrunner has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Roadrunner 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.
Weaknesses of Roadrunner | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Roadrunner are -
High cash cycle compare to competitors
Roadrunner 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.
Lack of clear differentiation of Roadrunner products
– To increase the profitability and margins on the products, Roadrunner needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Roadrunner needs to have more collaboration between its sales team and marketing team. Sales professionals in the Trucking industry have deep experience in developing customer relationships. Marketing department at Roadrunner can leverage the sales team experience to cultivate customer relationships as Roadrunner is planning to shift buying processes online.
High dependence on Roadrunner ‘s star products
– The top 2 products and services of Roadrunner 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 Roadrunner has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Roadrunner has high operating costs in the Trucking industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Roadrunner lucrative customers.
Compensation and incentives
– The revenue per employee of Roadrunner 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.
Increasing silos among functional specialists
– The organizational structure of Roadrunner is dominated by functional specialists. It is not different from other players in the Trucking industry, but Roadrunner needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Roadrunner to focus more on services in the Trucking industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Trucking industry, Roadrunner 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.
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 Roadrunner supply chain. Even after few cautionary changes, Roadrunner is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Roadrunner vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Roadrunner, 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.
Slow to strategic competitive environment developments
– As Roadrunner 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.
Roadrunner Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Roadrunner are -
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. Roadrunner can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Roadrunner 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 Roadrunner to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Roadrunner can improve the customer journey of consumers in the Trucking 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Roadrunner can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Roadrunner is facing challenges because of the dominance of functional experts in the organization. Roadrunner 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Roadrunner can use these opportunities to build new business models that can help the communities that Roadrunner operates in. Secondly it can use opportunities from government spending in Trucking sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Roadrunner in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.
Loyalty marketing
– Roadrunner 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.
Manufacturing automation
– Roadrunner can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.
Creating value in data economy
– The success of analytics program of Roadrunner has opened avenues for new revenue streams for the organization in Trucking industry. This can help Roadrunner to build a more holistic ecosystem for Roadrunner products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Roadrunner 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 Roadrunner to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Roadrunner 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.
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. Roadrunner 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. Roadrunner 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.
Threats Roadrunner External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Roadrunner are -
High dependence on third party suppliers
– Roadrunner 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.
Regulatory challenges
– Roadrunner 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.
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 Roadrunner in the Trucking sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Roadrunner has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Roadrunner needs to keep up with the evolution of technology in the Trucking 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.
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 Roadrunner business can come under increasing regulations regarding data privacy, data security, etc.
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. Roadrunner needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Roadrunner is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Roadrunner with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Roadrunner 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.
Increasing wage structure of Roadrunner
– 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 Roadrunner.
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. Roadrunner can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Roadrunner 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 Roadrunner prominent markets.
Weighted SWOT Analysis of Roadrunner Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Roadrunner 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 Roadrunner 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 Roadrunner 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 Roadrunner 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 Roadrunner needs to make to build a sustainable competitive advantage.
