Introduction
Union Pacific Corporation operates railroads in the United States through its affiliate, Union Pacific Railroad Company. Its headquarters are in Omaha, Nebraska, in the United States. It provides agricultural items, automobiles, chemicals, industrial products, energy, and intermodal solutions. The corporation operates about 32,094 route kilometers, connecting Gulf Coast and Pacific Coast ports to entrances in the Eastern and Midwest United States and numerous routes to significant Mexican gateways. It operates in over half of the country and works with other rail operators to transport freight between the Atlantic Coast, Mexico, Pacific Coast, Canada, Southeast, and Southwest. The traffic from exports and imports flows through ports on the Gulf and Pacific coasts and through the borders of Canada and Mexico (Karampourniotis, 2018). The company’s freight transport comprises bulk, express, and premium trade. In unit locomotives, bulk traffic consists mostly of coal, rock, grain, or soda ash. Its premium business includes the transportation of completed autos and intermodal containers.
Competition
Several companies and pipeline operators compete with Union Pacific in railways, motor haulers, and shipping. Burlington Northern Santa Fe LLC is the principal railroad competition. Its principal affiliate, BNSF Railway Company (BNSF), runs parallel tracks across several of our major traffic corridors (Karampourniotis, 2018). Furthermore, the company operates in corridors served by other railways and motor carriers.
Except for most coal shipping, five of the six product groupings have motor carrier competition. Due to the routes’ closeness to major interior and Gulf Coast canals, barges may be highly competitive in some areas of operation for bulk and grain commodities. In addition to pricing rivalry, the corporation confronts competition from truckers and other railways regarding transit times, efficiency, and service reliability. Motor carriers, in particular, may have the edge over railroads regarding transit times and service timeliness. However, trains are far more cost-effective than vehicles, reducing the environmental and public infrastructure effects of delivering products. Railroads in the United States, particularly Union Pacific, have been working to shift some traffic from truckers to railroad transportation. Spending to decrease the prices of other means of transportation and policy reforms that put operational restraints on railroad traffic can potentially lessen competitiveness.
The Objective of SWOT Matrix
The primary goal of a SWOT analysis is to compare and identify tactics the company can utilize to capitalize on external opportunities, fight threats, improve on strengths, and eliminate its weaknesses.
SWOT Analysis Comparison
Union Pacific’s strengths examine the important components of its operations that provide it with a competitive advantage in the industry. Union Pacific’s strengths in the SWOT Analysis include a solid operational network in the United States, good financial performance, and diverse income streams (Catenazzo, 2022, p. 33). The railroad sector is one of the most intriguing on the market. The sector has a distinct competitive edge that has been growing for over a century. The current railroad infrastructure is Union Pacific’s strength. No firm can afford the financial resources to construct a new infrastructure from the ground up. It makes the corporation more appealing since it will continue to be one of the major railroad owners in the United States. It appears doubtful that additional competition would suffocate the firm.
These advantages assist it in maintaining market share in current markets and capturing new ones. Union Pacific has a robust dealer network due to the culture it has created among distributors and dealers. The dealerships not only advertise the company’s services, but they spend on educating the sales crew to explain to customers how to get the most out of the items. Union Pacific has an excellent Free Cash Flow, which provides the firm with the resources to develop new initiatives. Union Pacific invests heavily in employee growth and development, culminating in a team that is not just highly trained but driven to succeed. As captured in Appendix A, one of the company’s strengths has been its ability to execute highly effective Go To Marketing tactics for its goods. Operations automation improved the reliability of Union Pacific commodities and allowed the corporation to scale up and down in response to market demand. Union Pacific has created a dependable distribution system to cover the bulk of its prospective market (Sladkowski, 2018, p. 121). It has a solid foundation of reputable raw material suppliers, allowing the organization to overcome potential supply chain bottlenecks.
Weaknesses
As a consultant, Union Pacific’s potential weaknesses are where it can improve by making the correct decisions. Weaknesses are instances where a firm may strengthen its competitive edge and strategic positioning by applying SWOT analysis. Product promotion exposes the company to numerous concerns. Even if the product is a sales success, its positioning and distinct selling proposition are not well articulated, which may lead to rival attacks in this area. The financial planning process is inefficient and ineffective. Union Pacific experiences a high employee turnover rate (Sladkowski, 2018, p. 119). Compared to other companies in the industry, the firm has a greater turnover rate and must spend more on staff development. The corporation has failed to address the difficulties posed by new competitors in the industry, resulting in a loss of modest market share in specialist categories. Union Pacific must establish an internal feedback system right from the sales staff on the ground to address these difficulties.
Opportunities
After several years of economic meltdown and poor development in the sector, the economic rebound and rise in consumer spending represent a chance for Union Pacific to gain new customers and boost its market share. The corporation has invested significantly in the internet platform over the last few years (Catenazzo, 2022, p. 38). Union Pacific now has a new sales channel thanks to the investment. In the subsequent years, the corporation may capitalize on this potential by getting to know its clients better and meeting their demands through big data analytics. Emerging consumer behavior trends may offer up new markets for Union Pacific. It is an excellent chance for the company to generate new income streams and expand into other product categories.
Threats
Changing customer purchasing habits through internet channels may challenge the current infrastructure-driven supply chain architecture. A skilled labor shortage in vital worldwide markets threatens Union Pacific’s ability to maintain consistent profit growth in such areas. Imitation of illegal and low-quality goods is a challenge to the products at Union Pacific, particularly in growing and low-income regions. The rising unilateralism in the American economy may prompt a similar response from other governments, severely harming worldwide commerce (Catenazzo, 2022, p. 39). The corporation will likely face litigation in numerous markets because of varying regulations and constant shifts in product specifications.
SWOT Analysis Limitations at Union Pacific
Even though the SWOT analysis is frequently utilized as a strategic instrument, it is not without limits. Certain aspects of a corporation can be strengths and weaknesses, one of the most notable limitations. An excellent example is that evolving legislation may be both a danger and an opportunity for the business, allowing it to compete on an equal playing field.
Competitors
Several brands in the industry compete for a similar set of consumers, including American Commercial Lines Inc. and CNX Transportation Inc. The oldest railroad network is owned by Union Pacific Corporation. Despite its 150-year history, the company is expanding rapidly (Subramaniam, 2022, p. 101). It has an advantage over competitors since its development can be linked to its primary business strategy, which focuses resources on maintaining a profitable railroad operation. The management has invested appropriately in infrastructure, which protects it from shifting commodity market patterns and gives it a competitive advantage.
Trends in Transport
Many Pacific ports grew out of multifunctional terminals in national capitals that served both local and international freight. Nevertheless, commercial development and containerization have gradually modified infrastructure facilities during the previous few decades (Asian Development Bank, 2020). Port infrastructure has been required to adjust due to the shift from break-bulk bulk cargoes to container shipping. Large open warehousing facilities are required for cargo operations to handle heavy handling tools and high levels of container stacking. Due to the general shortage of storage space within the current port borders, limited access to storage locations, and surfacing issues induced by massive container handling, numerous ports are experiencing increased congestion.
The second emerging trend is the need for terminal separation. As global commerce and the cruising industry grew, foreign vessels required distinct wharves from those operating fishing boats and smaller domestic vessels. As a result, multifunctional wharves have been phased out in favor of single-purpose facilities. Local fishing vessels were the first to be separated from home harbors, and the second level was the separation of residential wharves. Another aspect has been the increase in tourism in several ports. As a result, increased pressure is being applied to segregate freight and passenger services (Asian Development Bank, 2020). Because considerable modifications in infrastructure are required, such a transformation takes time and is costly. Another possible development is the relocation of gasoline tanker facilities away from the port area. Most tanker docks are now movable mooring points connected to specialized tanker docks via underwater pipes.
Union Pacific’s Strategic Intent
These frequent port development difficulties do not have a one-size-fits-all solution. However, an incremental strategy to sustainably manage rising port traffic is imminent (Wilmsmeier, 2020). Before making substantial expenditures on planned expansion, the corporation will look for cost-effective ways to improve the current port’s operating efficiency and capability increases. It will ensure routine maintenance of current and new equipment to ensure dependability and productivity.
Conclusion
In conclusion, the paper covered Union Pacific Corporation’s SWOT analysis in the wake of technology and external competition. The company should consider the strengths and available opportunities to handle potential threats. The threats will likely derail the ability to maintain consistent profit growth in certain regions. Emerging trends such as arising need to separate the terminals and adjustments in port infrastructure due to the shift from break-bulk bulk cargoes to container shipping. The company must look for cost-effective ways to improve the current port’s operating efficiency and ensure routine for the existing equipment.
References
Asian Development Bank. (2020). Trade and Maritime transport trends in the Pacific. Asian Development Bank, [S.I.].
Catenazzo, G. (2022). Challenges and opportunities for transportation services in the post-COVID-19 era, iGI Global, Business Science Reference, Hershey, PA. p. 30-40.
Karampourniotis, D. (2018). Logistics 4.0. applications, trends, and challenges. GRIN Verlag, [Place of publication not identified]. p. 46-76.
Sladkowski, A. (2018). Transport systems and delivery of cargo on East-West routes. Springer, Cham, Switzerland. p. 110-145.
Subramaniam, M. (2022). The future of competitive strategy unleashes the power of data and digital ecosystems. The MIT Press, Cambridge, Massachusetts. p. 90-120.
Wilmsmeier, G. (2020). Geographies of maritime transport. Edward Elgar Publishing, Northampton.
Appendix
The table below summarizes the SWOT analysis in brief of Union Pacific Corporation.