Star Bulk Carriers (SBLK) SWOT Analysis / TOWS Matrix / MBA Resources
Water Transportation
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Star Bulk Carriers (United States)
Based on various researches at Oak Spring University , Star Bulk Carriers is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, increasing energy prices, etc
Introduction to SWOT Analysis of Star Bulk Carriers
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Star Bulk Carriers can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Star Bulk Carriers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Star Bulk Carriers 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 Star Bulk Carriers can be done for the following purposes –
1. Strategic planning of Star Bulk Carriers
2. Improving business portfolio management of Star Bulk Carriers
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 Star Bulk Carriers
Strengths of Star Bulk Carriers | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Star Bulk Carriers are -
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Star Bulk Carriers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Star Bulk Carriers 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.
High switching costs
– The high switching costs that Star Bulk Carriers 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.
Diverse revenue streams
– Star Bulk Carriers is present in almost all the verticals within the Water Transportation industry. This has provided Star Bulk Carriers 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.
Operational resilience
– The operational resilience strategy of Star Bulk Carriers comprises – understanding the underlying the factors in the Water Transportation 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.
Ability to lead change in Water Transportation
– Star Bulk Carriers 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 Star Bulk Carriers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Star Bulk Carriers 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 Star Bulk Carriers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Star Bulk Carriers emphasize – knowledge, initiative, and innovation.
Analytics focus
– Star Bulk Carriers 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.
Innovation driven organization
– Star Bulk Carriers is one of the most innovative firm in Water Transportation sector.
Superior customer experience
– The customer experience strategy of Star Bulk Carriers in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Star Bulk Carriers 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.
Sustainable margins compare to other players in Water Transportation industry
– Star Bulk Carriers has clearly differentiated products in the market place. This has enabled Star Bulk Carriers to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Star Bulk Carriers to invest into research and development (R&D) and innovation.
Organizational Resilience of Star Bulk Carriers
– The covid-19 pandemic has put organizational resilience at the centre of everthing Star Bulk Carriers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Star Bulk Carriers | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Star Bulk Carriers are -
High dependence on Star Bulk Carriers ‘s star products
– The top 2 products and services of Star Bulk Carriers 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 Star Bulk Carriers has relatively successful track record of launching new products.
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 Star Bulk Carriers supply chain. Even after few cautionary changes, Star Bulk Carriers is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Star Bulk Carriers vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Star Bulk Carriers 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 Star Bulk Carriers lucrative customers.
Need for greater diversity
– Star Bulk Carriers 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.
Increasing silos among functional specialists
– The organizational structure of Star Bulk Carriers is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Star Bulk Carriers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Star Bulk Carriers to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Star Bulk Carriers 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.
No frontier risks strategy
– From the 10K / annual statement of Star Bulk Carriers, 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.
High bargaining power of channel partners in Water Transportation industry
– because of the regulatory requirements in United States, Star Bulk Carriers 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.
Ability to respond to the competition
– As the decision making is very deliberative at Star Bulk Carriers, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. Star Bulk Carriers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Star Bulk Carriers strategy
– From the outside it seems that the employees of Star Bulk Carriers 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.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Star Bulk Carriers 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.
Star Bulk Carriers Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Star Bulk Carriers are -
Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Star Bulk Carriers in the Water Transportation industry. Now Star Bulk Carriers can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Star Bulk Carriers 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.
Buying journey improvements
– Star Bulk Carriers 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Star Bulk Carriers is facing challenges because of the dominance of functional experts in the organization. Star Bulk Carriers 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.
Building a culture of innovation
– managers at Star Bulk Carriers 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.
Using analytics as competitive advantage
– Star Bulk Carriers 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 Star Bulk Carriers to build a competitive advantage using analytics. The analytics driven competitive advantage can help Star Bulk Carriers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Star Bulk Carriers 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 Star Bulk Carriers has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Star Bulk Carriers to build a more holistic ecosystem for Star Bulk Carriers products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Star Bulk Carriers 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 Star Bulk Carriers to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Star Bulk Carriers 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Star Bulk Carriers 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Star Bulk Carriers 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, Star Bulk Carriers 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 Star Bulk Carriers to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Star Bulk Carriers External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Star Bulk Carriers are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Star Bulk Carriers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
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. Star Bulk Carriers 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.
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 Star Bulk Carriers.
Regulatory challenges
– Star Bulk Carriers 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 Star Bulk Carriers 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.
High dependence on third party suppliers
– Star Bulk Carriers 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.
Increasing wage structure of Star Bulk Carriers
– 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 Star Bulk Carriers.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Star Bulk Carriers 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 Star Bulk Carriers prominent markets.
Shortening product life cycle
– it is one of the major threat that Star Bulk Carriers is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Star Bulk Carriers in the Water Transportation sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Star Bulk Carriers has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Star Bulk Carriers 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.
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. Star Bulk Carriers needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Star Bulk Carriers Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Star Bulk Carriers 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 Star Bulk Carriers 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 Star Bulk Carriers 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 Star Bulk Carriers 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 Star Bulk Carriers needs to make to build a sustainable competitive advantage.
