COSCO Shipping Energy Trans (600026) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for COSCO Shipping Energy Trans (China)

Based on various researches at Oak Spring University , COSCO Shipping Energy Trans is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, geopolitical disruptions, wage bills are increasing, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of COSCO Shipping Energy Trans

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that COSCO Shipping Energy Trans can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the COSCO Shipping Energy Trans, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which COSCO Shipping Energy Trans 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of COSCO Shipping Energy Trans can be done for the following purposes –
1. Strategic planning of COSCO Shipping Energy Trans
2. Improving business portfolio management of COSCO Shipping Energy Trans
3. Assessing feasibility of the new initiative in China
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of COSCO Shipping Energy Trans

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Strengths of COSCO Shipping Energy Trans | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of COSCO Shipping Energy Trans are -

Innovation driven organization

– COSCO Shipping Energy Trans is one of the most innovative firm in Water Transportation sector.

Highly skilled collaborators

– COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management in the Water Transportation industry

– COSCO Shipping Energy Trans is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of COSCO Shipping Energy Trans in the Transportation sector have low bargaining power. COSCO Shipping Energy Trans has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps COSCO Shipping Energy Trans to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– COSCO Shipping Energy Trans is present in almost all the verticals within the Water Transportation industry. This has provided COSCO Shipping Energy Trans 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.

Digital Transformation in Water Transportation industry

- digital transformation varies from industry to industry. For COSCO Shipping Energy Trans digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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.

Effective Research and Development (R&D)

– COSCO Shipping Energy Trans has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – COSCO Shipping Energy Trans 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.

Learning organization

- COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at COSCO Shipping Energy Trans emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– COSCO Shipping Energy Trans has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. COSCO Shipping Energy Trans 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.

Cross disciplinary teams

– Horizontal connected teams at the COSCO Shipping Energy Trans are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Ability to lead change in Water Transportation

– COSCO Shipping Energy Trans is one of the leading players in the Water Transportation industry in China. Over the years it has not only transformed the business landscape in the Water Transportation industry in China but also across the existing markets. The ability to lead change has enabled COSCO Shipping Energy Trans in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses of COSCO Shipping Energy Trans | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of COSCO Shipping Energy Trans are -

High cash cycle compare to competitors

COSCO Shipping Energy Trans 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.

Slow decision making process

– As mentioned earlier in the report, COSCO Shipping Energy Trans has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Transportation industry over the last five years. COSCO Shipping Energy Trans even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

No frontier risks strategy

– From the 10K / annual statement of COSCO Shipping Energy Trans, 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 China, COSCO Shipping Energy Trans 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.

Lack of clear differentiation of COSCO Shipping Energy Trans products

– To increase the profitability and margins on the products, COSCO Shipping Energy Trans needs to provide more differentiated products than what it is currently offering in the marketplace.

Compensation and incentives

– The revenue per employee of COSCO Shipping Energy Trans 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.

Ability to respond to the competition

– As the decision making is very deliberative at COSCO Shipping Energy Trans, in the dynamic environment of Water Transportation industry it has struggled to respond to the nimble upstart competition. COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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.

Products dominated business model

– Even though COSCO Shipping Energy Trans has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. COSCO Shipping Energy Trans should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the Water Transportation industry, COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but COSCO Shipping Energy Trans needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help COSCO Shipping Energy Trans to focus more on services in the Water Transportation industry rather than just following the product oriented approach.

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COSCO Shipping Energy Trans Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of COSCO Shipping Energy Trans are -

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. COSCO Shipping Energy Trans can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Leveraging digital technologies

– COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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.

Building a culture of innovation

– managers at COSCO Shipping Energy Trans 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.

Better consumer reach

– The expansion of the 5G network will help COSCO Shipping Energy Trans to increase its market reach. COSCO Shipping Energy Trans will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Low interest rates

– Even though inflation is raising its head in most developed economies, COSCO Shipping Energy Trans 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.

Manufacturing automation

– COSCO Shipping Energy Trans 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.

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 COSCO Shipping Energy Trans 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.

Buying journey improvements

– COSCO Shipping Energy Trans 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, COSCO Shipping Energy Trans can use these opportunities to build new business models that can help the communities that COSCO Shipping Energy Trans operates in. Secondly it can use opportunities from government spending in Water Transportation sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects COSCO Shipping Energy Trans can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. COSCO Shipping Energy Trans can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– COSCO Shipping Energy Trans 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.

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Threats COSCO Shipping Energy Trans External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of COSCO Shipping Energy Trans are -

High dependence on third party suppliers

– COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans

– 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 COSCO Shipping Energy Trans.

Technology acceleration in Forth Industrial Revolution

– COSCO Shipping Energy Trans has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, COSCO Shipping Energy Trans 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.

Shortening product life cycle

– it is one of the major threat that COSCO Shipping Energy Trans is facing in Water Transportation 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 Water Transportation industry are lowering. It can presents COSCO Shipping Energy Trans with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for COSCO Shipping Energy Trans 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.

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 COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans.

Regulatory challenges

– COSCO Shipping Energy Trans 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.

Environmental challenges

– COSCO Shipping Energy Trans 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. COSCO Shipping Energy Trans can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.

Consumer confidence and its impact on COSCO Shipping Energy Trans 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.

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. COSCO Shipping Energy Trans 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.

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.

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Weighted SWOT Analysis of COSCO Shipping Energy Trans Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans 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 COSCO Shipping Energy Trans needs to make to build a sustainable competitive advantage.

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