SWOT Analysis / TOWS Matrix for Scorpio Bulkers (United States)
Based on various researches at Oak Spring University , Scorpio Bulkers is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing energy prices, there is backlash against globalization, there is increasing trade war between United States & China, wage bills are increasing, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Scorpio Bulkers can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Scorpio Bulkers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Scorpio Bulkers 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 Scorpio Bulkers can be done for the following purposes –
1. Strategic planning of Scorpio Bulkers
2. Improving business portfolio management of Scorpio Bulkers
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 Scorpio Bulkers
Strengths of Scorpio Bulkers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Scorpio Bulkers are -
Learning organization
- Scorpio Bulkers 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 Scorpio Bulkers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Scorpio Bulkers emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Water Transportation industry
– Scorpio Bulkers has clearly differentiated products in the market place. This has enabled Scorpio Bulkers to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Scorpio Bulkers to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Scorpio Bulkers is present in almost all the verticals within the Water Transportation industry. This has provided Scorpio Bulkers 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.
Training and development
– Scorpio Bulkers 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.
Ability to recruit top talent
– Scorpio Bulkers 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.
High brand equity
– Scorpio Bulkers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Scorpio Bulkers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Scorpio Bulkers 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.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Scorpio Bulkers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Scorpio Bulkers 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.
Low bargaining power of suppliers
– Suppliers of Scorpio Bulkers in the Transportation sector have low bargaining power. Scorpio Bulkers has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Scorpio Bulkers to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Scorpio Bulkers 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 Scorpio Bulkers have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Scorpio Bulkers 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.
Organizational Resilience of Scorpio Bulkers
– The covid-19 pandemic has put organizational resilience at the centre of everthing Scorpio Bulkers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Scorpio Bulkers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Scorpio Bulkers are -
Capital Spending Reduction
– Even during the low interest decade, Scorpio Bulkers 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.
Slow to strategic competitive environment developments
– As Scorpio Bulkers 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.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Scorpio Bulkers 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.
Aligning sales with marketing
– From the outside it seems that Scorpio Bulkers 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 Scorpio Bulkers can leverage the sales team experience to cultivate customer relationships as Scorpio Bulkers is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Scorpio Bulkers, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Scorpio Bulkers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Scorpio Bulkers products
– To increase the profitability and margins on the products, Scorpio Bulkers needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Scorpio Bulkers is slow explore the new channels of communication. These new channels of communication can help Scorpio Bulkers to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Scorpio Bulkers 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 operating costs
– Compare to the competitors, Scorpio Bulkers 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 Scorpio Bulkers lucrative customers.
Compensation and incentives
– The revenue per employee of Scorpio Bulkers is just above the Water Transportation 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.
Need for greater diversity
– Scorpio Bulkers 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.
Scorpio Bulkers Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Scorpio Bulkers are -
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. Scorpio Bulkers 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. Scorpio Bulkers 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.
Buying journey improvements
– Scorpio Bulkers 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.
Loyalty marketing
– Scorpio Bulkers 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.
Developing new processes and practices
– Scorpio Bulkers 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.
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. Scorpio Bulkers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Scorpio Bulkers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Scorpio Bulkers can use these opportunities to build new business models that can help the communities that Scorpio Bulkers operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Building a culture of innovation
– managers at Scorpio Bulkers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Scorpio Bulkers 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 Scorpio Bulkers 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 Scorpio Bulkers 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 Scorpio Bulkers to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Scorpio Bulkers is facing challenges because of the dominance of functional experts in the organization. Scorpio Bulkers 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Scorpio Bulkers 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.
Creating value in data economy
– The success of analytics program of Scorpio Bulkers has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Scorpio Bulkers to build a more holistic ecosystem for Scorpio Bulkers products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Scorpio Bulkers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Scorpio Bulkers 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 Scorpio Bulkers.
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 Scorpio Bulkers in the Water Transportation sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Scorpio Bulkers 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.
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.
Regulatory challenges
– Scorpio Bulkers 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.
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. Scorpio Bulkers needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Scorpio Bulkers 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.
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 Scorpio Bulkers business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Scorpio Bulkers 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.
Consumer confidence and its impact on Scorpio Bulkers 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.
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.
Environmental challenges
– Scorpio Bulkers 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. Scorpio Bulkers can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Technology acceleration in Forth Industrial Revolution
– Scorpio Bulkers has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Scorpio Bulkers 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.
Weighted SWOT Analysis of Scorpio Bulkers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Scorpio Bulkers 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 Scorpio Bulkers 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 Scorpio Bulkers 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 Scorpio Bulkers 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 Scorpio Bulkers needs to make to build a sustainable competitive advantage.