Based on various researches at Oak Spring University , Kerry Logistics Network is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing energy prices, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing commodity prices, technology disruption,
banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Kerry Logistics Network
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kerry Logistics Network can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kerry Logistics Network, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kerry Logistics Network 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 Kerry Logistics Network can be done for the following purposes –
1. Strategic planning of Kerry Logistics Network
2. Improving business portfolio management of Kerry Logistics Network
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Airline sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kerry Logistics Network
Strengths of Kerry Logistics Network | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kerry Logistics Network are -
Strong track record of project management in the Airline industry
– Kerry Logistics Network is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Airline industry
– Kerry Logistics Network has clearly differentiated products in the market place. This has enabled Kerry Logistics Network to fetch slight price premium compare to the competitors in the Airline industry. The sustainable margins have also helped Kerry Logistics Network to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Kerry Logistics Network has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kerry Logistics Network staying ahead in the Airline industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Kerry Logistics Network comprises – understanding the underlying the factors in the Airline 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.
Innovation driven organization
– Kerry Logistics Network is one of the most innovative firm in Airline sector.
High brand equity
– Kerry Logistics Network has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kerry Logistics Network to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Airline
– Kerry Logistics Network is one of the leading players in the Airline industry in Hong Kong. Over the years it has not only transformed the business landscape in the Airline industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Kerry Logistics Network in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Kerry Logistics Network in Airline industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Airline industry
- digital transformation varies from industry to industry. For Kerry Logistics Network digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kerry Logistics Network 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.
Ability to recruit top talent
– Kerry Logistics Network is one of the leading players in the Airline industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Kerry Logistics Network 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.
Successful track record of launching new products
– Kerry Logistics Network has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kerry Logistics Network 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.
Weaknesses of Kerry Logistics Network | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kerry Logistics Network are -
Slow to strategic competitive environment developments
– As Kerry Logistics Network is one of the leading players in the Airline industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Airline industry in last five years.
Compensation and incentives
– The revenue per employee of Kerry Logistics Network is just above the Airline 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.
High dependence on Kerry Logistics Network ‘s star products
– The top 2 products and services of Kerry Logistics Network still accounts for major business revenue. This dependence on star products in Airline industry has resulted into insufficient focus on developing new products, even though Kerry Logistics Network has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Hong Kong, Kerry Logistics Network needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Kerry Logistics Network 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.
Capital Spending Reduction
– Even during the low interest decade, Kerry Logistics Network 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 Airline industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Kerry Logistics Network needs to have more collaboration between its sales team and marketing team. Sales professionals in the Airline industry have deep experience in developing customer relationships. Marketing department at Kerry Logistics Network can leverage the sales team experience to cultivate customer relationships as Kerry Logistics Network is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Kerry Logistics Network has high operating costs in the Airline industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kerry Logistics Network lucrative customers.
High bargaining power of channel partners in Airline industry
– because of the regulatory requirements in Hong Kong, Kerry Logistics Network 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 Airline industry.
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 Kerry Logistics Network supply chain. Even after few cautionary changes, Kerry Logistics Network is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kerry Logistics Network vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kerry Logistics Network is slow explore the new channels of communication. These new channels of communication can help Kerry Logistics Network to provide better information regarding Airline products and services. It can also build an online community to further reach out to potential customers.
Kerry Logistics Network Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kerry Logistics Network are -
Use of Bitcoin and other crypto currencies for transactions in Airline industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kerry Logistics Network in the Airline industry. Now Kerry Logistics Network can target international markets with far fewer capital restrictions requirements than the existing system.
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. Kerry Logistics Network can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kerry Logistics Network in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Airline industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Kerry Logistics Network 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.
Building a culture of innovation
– managers at Kerry Logistics Network 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 Airline industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Airline industry, but it has also influenced the consumer preferences. Kerry Logistics Network can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Kerry Logistics Network 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 Airline industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kerry Logistics Network 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. Kerry Logistics Network 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, Kerry Logistics Network 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 Kerry Logistics Network to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kerry Logistics Network can use these opportunities to build new business models that can help the communities that Kerry Logistics Network operates in. Secondly it can use opportunities from government spending in Airline sector.
Learning at scale
– Online learning technologies has now opened space for Kerry Logistics Network 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.
Developing new processes and practices
– Kerry Logistics Network can develop new processes and procedures in Airline 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.
Creating value in data economy
– The success of analytics program of Kerry Logistics Network has opened avenues for new revenue streams for the organization in Airline industry. This can help Kerry Logistics Network to build a more holistic ecosystem for Kerry Logistics Network products in the Airline industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Kerry Logistics Network External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kerry Logistics Network are -
Increasing wage structure of Kerry Logistics Network
– 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 Kerry Logistics Network.
Consumer confidence and its impact on Kerry Logistics Network 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 Airline industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Kerry Logistics Network is facing in Airline sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kerry Logistics Network may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Airline sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kerry Logistics Network 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 Kerry Logistics Network prominent markets.
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 Kerry Logistics Network in the Airline sector and impact the bottomline of the organization.
Environmental challenges
– Kerry Logistics Network 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. Kerry Logistics Network can take advantage of this fund but it will also bring new competitors in the Airline industry.
Stagnating economy with rate increase
– Kerry Logistics Network 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 Airline industry.
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 Kerry Logistics Network.
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. Kerry Logistics Network 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. Kerry Logistics Network needs to understand the core reasons impacting the Airline industry. This will help it in building a better workplace.
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.
Weighted SWOT Analysis of Kerry Logistics Network Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kerry Logistics Network 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 Kerry Logistics Network 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 Kerry Logistics Network 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 Kerry Logistics Network 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 Kerry Logistics Network needs to make to build a sustainable competitive advantage.