SWOT Analysis / TOWS Matrix for DEPPON LOGISTICS (China)
Based on various researches at Oak Spring University , DEPPON LOGISTICS is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
increasing energy prices, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that DEPPON LOGISTICS can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the DEPPON LOGISTICS, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which DEPPON LOGISTICS 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 DEPPON LOGISTICS can be done for the following purposes –
1. Strategic planning of DEPPON LOGISTICS
2. Improving business portfolio management of DEPPON LOGISTICS
3. Assessing feasibility of the new initiative in China
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of DEPPON LOGISTICS
Strengths of DEPPON LOGISTICS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of DEPPON LOGISTICS are -
Sustainable margins compare to other players in Trucking industry
– DEPPON LOGISTICS has clearly differentiated products in the market place. This has enabled DEPPON LOGISTICS to fetch slight price premium compare to the competitors in the Trucking industry. The sustainable margins have also helped DEPPON LOGISTICS to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– DEPPON LOGISTICS 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 DEPPON LOGISTICS have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of DEPPON LOGISTICS 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
– DEPPON LOGISTICS is one of the leading players in the Trucking industry in China. Over the years it has not only transformed the business landscape in the Trucking industry in China but also across the existing markets. The ability to lead change has enabled DEPPON LOGISTICS in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Trucking industry
- digital transformation varies from industry to industry. For DEPPON LOGISTICS digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. DEPPON LOGISTICS 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.
Diverse revenue streams
– DEPPON LOGISTICS is present in almost all the verticals within the Trucking industry. This has provided DEPPON LOGISTICS 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.
Strong track record of project management in the Trucking industry
– DEPPON LOGISTICS is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– DEPPON LOGISTICS has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. DEPPON LOGISTICS 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.
Training and development
– DEPPON LOGISTICS 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.
High brand equity
– DEPPON LOGISTICS has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled DEPPON LOGISTICS to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– DEPPON LOGISTICS is one of the leading players in the Trucking industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of DEPPON LOGISTICS
– The covid-19 pandemic has put organizational resilience at the centre of everthing DEPPON LOGISTICS does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of DEPPON LOGISTICS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DEPPON LOGISTICS are -
Slow decision making process
– As mentioned earlier in the report, DEPPON LOGISTICS has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Trucking industry over the last five years. DEPPON LOGISTICS 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.
Capital Spending Reduction
– Even during the low interest decade, DEPPON LOGISTICS has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Trucking industry using digital technology.
High bargaining power of channel partners in Trucking industry
– because of the regulatory requirements in China, DEPPON LOGISTICS 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 Trucking industry.
High dependence on DEPPON LOGISTICS ‘s star products
– The top 2 products and services of DEPPON LOGISTICS 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 DEPPON LOGISTICS 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 DEPPON LOGISTICS supply chain. Even after few cautionary changes, DEPPON LOGISTICS is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left DEPPON LOGISTICS vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, DEPPON LOGISTICS 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 DEPPON LOGISTICS lucrative customers.
Low market penetration in new markets
– Outside its home market of China, DEPPON LOGISTICS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at DEPPON LOGISTICS, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. DEPPON LOGISTICS has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– DEPPON LOGISTICS 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.
Interest costs
– Compare to the competition, DEPPON LOGISTICS has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of DEPPON LOGISTICS is dominated by functional specialists. It is not different from other players in the Trucking industry, but DEPPON LOGISTICS needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help DEPPON LOGISTICS to focus more on services in the Trucking industry rather than just following the product oriented approach.
DEPPON LOGISTICS Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of DEPPON LOGISTICS are -
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for DEPPON LOGISTICS in the Trucking industry. Now DEPPON LOGISTICS can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of DEPPON LOGISTICS has opened avenues for new revenue streams for the organization in Trucking industry. This can help DEPPON LOGISTICS to build a more holistic ecosystem for DEPPON LOGISTICS products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help DEPPON LOGISTICS 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.
Learning at scale
– Online learning technologies has now opened space for DEPPON LOGISTICS to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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. DEPPON LOGISTICS 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. DEPPON LOGISTICS 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, DEPPON LOGISTICS 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 DEPPON LOGISTICS to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, DEPPON LOGISTICS is facing challenges because of the dominance of functional experts in the organization. DEPPON LOGISTICS 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.
Developing new processes and practices
– DEPPON LOGISTICS 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.
Using analytics as competitive advantage
– DEPPON LOGISTICS has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Trucking sector. This continuous investment in analytics has enabled DEPPON LOGISTICS to build a competitive advantage using analytics. The analytics driven competitive advantage can help DEPPON LOGISTICS to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects DEPPON LOGISTICS can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– DEPPON LOGISTICS 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, DEPPON LOGISTICS 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.
Buying journey improvements
– DEPPON LOGISTICS 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.
Threats DEPPON LOGISTICS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of DEPPON LOGISTICS are -
Environmental challenges
– DEPPON LOGISTICS 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. DEPPON LOGISTICS can take advantage of this fund but it will also bring new competitors in the Trucking industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, DEPPON LOGISTICS may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Consumer confidence and its impact on DEPPON LOGISTICS demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Trucking industry and other sectors.
Shortening product life cycle
– it is one of the major threat that DEPPON LOGISTICS is facing in Trucking sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– DEPPON LOGISTICS has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, DEPPON LOGISTICS 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 DEPPON LOGISTICS business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for DEPPON LOGISTICS 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.
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. DEPPON LOGISTICS 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.
Stagnating economy with rate increase
– DEPPON LOGISTICS can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Trucking industry.
High dependence on third party suppliers
– DEPPON LOGISTICS 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
– DEPPON LOGISTICS 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.
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.
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. DEPPON LOGISTICS can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of DEPPON LOGISTICS Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at DEPPON LOGISTICS 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 DEPPON LOGISTICS 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 DEPPON LOGISTICS 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 DEPPON LOGISTICS 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 DEPPON LOGISTICS needs to make to build a sustainable competitive advantage.