Swift Transportation SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Swift Transportation managers to do a situational analysis of the firm . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Swift Transportation is facing in its current business environment.

The Swift Transportation is one of the leading organizatations in its industry. Swift Transportation maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis a highly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Swift Transportation to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Swift Transportation strengths, and eradicate its weaknesses.

Step by Step Guide to Swift Transportation SWOT Analysis

Strengths of Swift Transportation – Internal Strategic Factors

As one of the leading organizations in its industry, Swift Transportation has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Swift Transportation are –

• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Highly skilled workforce through successful training and learning programs. Swift Transportation is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
• Successful track record of developing new products – product innovation.
• Good Returns on Capital Expenditure – Swift Transportation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Brand Portfolio – Over the years Swift Transportation has invested in building a strong brand portfolio. The SWOT analysis of Swift Transportation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong distribution network – Over the years Swift Transportation has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – Swift Transportation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

Weakness of Swift Transportation – Internal Strategic Factors

Weakness are the areas where Swift Transportation can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Swift Transportation needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
• High attrition rate in work force – compare to other organizations in the industry Swift Transportation has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Limited success outside core business – Even though Swift Transportation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
• The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Swift Transportation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Swift Transportation is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Swift Transportation – External Strategic Factors

• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Swift Transportation an opportunity to enter a new emerging market.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Swift Transportation to capture new customers and increase its market share.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Swift Transportation to increase its profitability.
• The new technology provides an opportunity to Swift Transportation to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• The market development will lead to dilution of competitor’s advantage and enable Swift Transportation to increase its competitiveness compare to the other competitors.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Swift Transportation’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Swift Transportation.
• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Swift Transportation to drive home its advantage in new technology and gain market share in the new product category.

Threats Swift Transportation Facing - External Strategic Factors

• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• Imitation of the counterfeit and low quality product is also a threat to Swift Transportation’s product especially in the emerging markets and low income markets.
• Rising raw material can pose a threat to the Swift Transportation profitability.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Swift Transportation   in those markets.
• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.

Limitations of SWOT Analysis for Swift Transportation

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

• Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
• SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
• The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Swift Transportation
• SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
• SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Swift Transportation

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Swift Transportation managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Swift Transportation

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

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References / Citations & Bibliography

• M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
• A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
• O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
• L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
• R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)