SWOT Analysis / TOWS Matrix for High-Speed Railway (China)
Based on various researches at Oak Spring University , High-Speed Railway is operating in a macro-environment that has been destablized by – technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, geopolitical disruptions, wage bills are increasing,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of High-Speed Railway
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that High-Speed Railway can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the High-Speed Railway, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which High-Speed Railway 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 High-Speed Railway can be done for the following purposes –
1. Strategic planning of High-Speed Railway
2. Improving business portfolio management of High-Speed Railway
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of High-Speed Railway
Strengths of High-Speed Railway | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of High-Speed Railway are -
Ability to recruit top talent
– High-Speed Railway is one of the leading players in the Misc. Transportation 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.
Low bargaining power of suppliers
– Suppliers of High-Speed Railway in the Transportation sector have low bargaining power. High-Speed Railway has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps High-Speed Railway to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– High-Speed Railway 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.
Superior customer experience
– The customer experience strategy of High-Speed Railway in Misc. Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Misc. Transportation industry
– High-Speed Railway has clearly differentiated products in the market place. This has enabled High-Speed Railway to fetch slight price premium compare to the competitors in the Misc. Transportation industry. The sustainable margins have also helped High-Speed Railway to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– High-Speed Railway has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Transportation industry. Secondly the value chain collaborators of High-Speed Railway have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– High-Speed Railway has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled High-Speed Railway to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Misc. Transportation industry
- digital transformation varies from industry to industry. For High-Speed Railway digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. High-Speed Railway 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.
Successful track record of launching new products
– High-Speed Railway has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. High-Speed Railway 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.
Strong track record of project management in the Misc. Transportation industry
– High-Speed Railway is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- High-Speed Railway 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 High-Speed Railway is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at High-Speed Railway emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– High-Speed Railway is present in almost all the verticals within the Misc. Transportation industry. This has provided High-Speed Railway 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.
Weaknesses of High-Speed Railway | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of High-Speed Railway are -
Ability to respond to the competition
– As the decision making is very deliberative at High-Speed Railway, in the dynamic environment of Misc. Transportation industry it has struggled to respond to the nimble upstart competition. High-Speed Railway has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on High-Speed Railway ‘s star products
– The top 2 products and services of High-Speed Railway still accounts for major business revenue. This dependence on star products in Misc. Transportation industry has resulted into insufficient focus on developing new products, even though High-Speed Railway has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that High-Speed Railway needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Transportation industry have deep experience in developing customer relationships. Marketing department at High-Speed Railway can leverage the sales team experience to cultivate customer relationships as High-Speed Railway is planning to shift buying processes online.
Lack of clear differentiation of High-Speed Railway products
– To increase the profitability and margins on the products, High-Speed Railway needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of High-Speed Railway, it seems that company is thinking out the frontier risks that can impact Misc. 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 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 High-Speed Railway supply chain. Even after few cautionary changes, High-Speed Railway is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left High-Speed Railway vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of High-Speed Railway is dominated by functional specialists. It is not different from other players in the Misc. Transportation industry, but High-Speed Railway needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help High-Speed Railway to focus more on services in the Misc. Transportation industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, High-Speed Railway 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.
Employees’ less understanding of High-Speed Railway strategy
– From the outside it seems that the employees of High-Speed Railway 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.
Compensation and incentives
– The revenue per employee of High-Speed Railway is just above the Misc. 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.
Slow decision making process
– As mentioned earlier in the report, High-Speed Railway has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Transportation industry over the last five years. High-Speed Railway 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.
High-Speed Railway Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of High-Speed Railway are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for High-Speed Railway in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Transportation industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, High-Speed Railway can use these opportunities to build new business models that can help the communities that High-Speed Railway operates in. Secondly it can use opportunities from government spending in Misc. Transportation sector.
Learning at scale
– Online learning technologies has now opened space for High-Speed Railway 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects High-Speed Railway can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for High-Speed Railway in the Misc. Transportation industry. Now High-Speed Railway can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at High-Speed Railway 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 Misc. Transportation industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for High-Speed Railway 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 High-Speed Railway to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– High-Speed Railway has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Transportation sector. This continuous investment in analytics has enabled High-Speed Railway to build a competitive advantage using analytics. The analytics driven competitive advantage can help High-Speed Railway to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– High-Speed Railway 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. High-Speed Railway 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. High-Speed Railway 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.
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. High-Speed Railway can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– High-Speed Railway 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, High-Speed Railway 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 High-Speed Railway 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 High-Speed Railway External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of High-Speed Railway are -
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 High-Speed Railway in the Misc. Transportation sector and impact the bottomline of the organization.
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. High-Speed Railway 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.
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. High-Speed Railway needs to understand the core reasons impacting the Misc. Transportation industry. This will help it in building a better workplace.
Consumer confidence and its impact on High-Speed Railway 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 Misc. Transportation industry and other sectors.
High dependence on third party suppliers
– High-Speed Railway 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.
Easy access to finance
– Easy access to finance in Misc. Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. High-Speed Railway can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 High-Speed Railway business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– High-Speed Railway 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. High-Speed Railway can take advantage of this fund but it will also bring new competitors in the Misc. Transportation industry.
Technology acceleration in Forth Industrial Revolution
– High-Speed Railway has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, High-Speed Railway needs to keep up with the evolution of technology in the Misc. 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, High-Speed Railway may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation sector.
Regulatory challenges
– High-Speed Railway 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 Misc. Transportation industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Transportation industry are lowering. It can presents High-Speed Railway with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Transportation sector.
Increasing wage structure of High-Speed Railway
– 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 High-Speed Railway.
Weighted SWOT Analysis of High-Speed Railway Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at High-Speed Railway 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 High-Speed Railway 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 High-Speed Railway 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 High-Speed Railway 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 High-Speed Railway needs to make to build a sustainable competitive advantage.
