Strategic Analysis Project Dart Transit Company

Strategic Analysis Project for Dart Transit Company

Background Information

The project under the strategic analysis is Dart Transit Company, a trucking company. It came from the Great Depression in America in 1934 when many businesses went bankrupt. Although it was hard, Earl Oren launched this business, later referred to as Dart Transit Company (Obeng & Ugboro, 2008). The industry began with a single trailer and a truck, and Oren began small-scale operations right from his room. He kept these operations through determination, and his son, Don, brought in new energy when he started working there, and new doors opened. In 1975, the company grew into a national carrier and served forty-eight states. In 1979, Don became the company's second president (Dart Transit Company). His sons continued with this tradition, and significant expansion was experienced, which and its network was a chain service like warehousing, logistics, storage, portable and intermodal services. Even today, the company still runs under Oren's name and continues to lead in transportation.

This company has a variety of activities, and the leading service it offers is public transportation. Its operations occur throughout the United States, and it provides both local and inter-county services with its buses with specialties in truckload, trucking, trailer services, and transportation services. It offers is commuter rail alongside Wilmington Line which serves in the northern side of the state (Obeng & Ugboro, 2008). The buses' estimated miles covered in 2019 was 165,812,534, and the number of customers served per day was 274, while the fortune 500 customers served ranged at 17%. Dart Network gives comprehensive transportation services land-based in the United States, Mexico, and Canada(Dart Transit Company). The team serving includes fleet management, customer service, human resources, sales and marketing, and intermodal operations. The company's headquarters and corporate office are in Eagan in Minnesota. The number of employees ranges from 1001-5000. This company's brief financial information is that audits are presented every fiscal year. Each of the annual revisions, typically subsequent in the yearly disclosure, includes the most recent financial statements. Table 1.

This company's primary source of revenues is the sales tax, which is generally levied on taxable items sold or acquired for use in the participating municipalities' boundaries. In the tables in the appendix, the tax revenue shows actual receipts of a given fiscal year. The financial statements reflect the reduction in sales tax revenue for the different fiscal years in which overpayment is deemed to have happened( Table 2). The secondary sources of revenues are fare box collections (Dart Transit Company). This is from the fare collected from the buses (Table 3). Other miscellaneous payments are from leases and advertising. For example, in the fiscal year 2019, the net sales of the tax revenues were $628.1 million compared to the 2018 fiscal year, which had $593.9million; this was an increase of about 5.8%. For the operating expenses, sales returns help measure the percentage of the tax revenue sales. This is required in the subsidizing of the net operating costs. Having a subsidy per passenger efficiently counts the company's services. It measures the amount of tax to be subsided.

Environmental Analysis

The environmental analysis for this company will utilize the PESTEL analysis, which is considered a strategic tool for analyzing the macro environment. The sectors to be emphasized are; Political, Social, Economic, Technological, Legal, and Environmental—the impact of the macro environment of the Dart Company. Notably, macro-environment factors affect the Dart Company and the Travel and Leisure Industry (Papoutsis, 2012). These factors can also impact the Porter Five Forces, which help shape the competitive and strategic landscape. These particular impacts can cause the competitive advantage of individual firms and the high levels of profit of the industry offering consumer services. This kind of PESTLE Analysis will give detailed challenges of the Dart Company in the macro-environment compared to competitive forces. For instance, a particular industry may be highly profitable but not benefit Dart Company since it is politically unstable. (Chart 1)

Political Factors Impacting Dart Company

These factors play significant roles in determining those factors that can impact the profitability of the market, which is long-term. Since the company operates in various countries, there is exposure to several political systems and environmental risks. The following are the factors that Dart Company should analyze before investing in multiple markets (Papoutsis, 2012). First, the risk associated with military invasion is a significant concern. The second is corruption, especially in the regulated sector of consumer services. The other factor is bureaucracy and government interference with the transit industry. Legal framework based on enforcement of the contract is yet another factor. The trade tariffs and regulations connected to the consumers' services, regulation of prices, rate of taxes and incentives, favoring certain trading partners, benefits of the employees, mandatory and anti-trust laws associated with the transit bus industry. Finally, intellectual property protection is yet another factor to be considered politically.

Economic Factors Affecting Dart Company

The macro-environment factors like the rate of savings, rate of interest, rate of foreign exchange, inflation rates, and the cycle in the economy help determine the investments in an economy (Papoutsis, 2012). On the other hand, micro factors such as norms in competition affect the competitive advantage of this firm. This company can use the economic aspects of a country, for example, the economic indicators in the industry, to assist in forecasting the trajectory of the whole company. The following are the economic factors that Dart Company should utilize when making a PESTLE analysis.

· The type of economic systems used in the countries under operation and how well they are stable.

· The stability of the currency in the host country and the exchange rates.

· The level of government intervention in the free market and the related consumer services.

· How efficient the financial markets are if the company needs to have capital raised in the local market.

· The level of infrastructure in the transit and travel industry.

· The comparative advantages of the country acting as the host and the consumer services sector in the specific country.

· The level of skills of the workforce in the industry.

· The education levels are available in the economy.

· The costs of labor and level of productivity in an economy.

· The level of economic growth.

· The rate of unemployment.

· The rates of interest.

· The business cycle stage is recession, recovery, or prosperity.

Social Factors Affecting Dart Company

The way of doing things is called culture; it affects how an organization does its things per the environment (Papoutsis, 2012). The beliefs and attitudes shared among the people have a significant impact on the way marketers in this company will understand those customers within a specific market. The following are the social factors to analyze.

· The level of the population as well as demographics.

· The structure of power and class in the society.

· The level and standard of education in this particular company.

· The culture of social conventions and gender roles.

· The level of entrepreneurial spirit and the nature of society in terms of encouraging entrepreneurship.

· Attitudes, for instance, the level of health consciousness.

Technological Factors Affecting Dart Transit Company

The current technology has caused disruptions in various industries. The transportation industry is no exemption (Papoutsis, 2012). There have been significant transformations in the last five years, hence no time to cope with these changes. Some players like Lyft and Uber have dominated the taxi industry, car industries under automation, and technology like Google. Alternatively, the manufacturing sector has received disruptions from Tesla Company. Therefore, a firm should analyze technology and how fast it is developing. The following are the technological factors that impact Dart;

· Developments by Dart competitors in terms of recent technology.

· The impact of technology on the product offering.

· The effect of value chain structure in the sector of consumer services.

· Technological diffusion rate.

· The level of impact the cost structure has on Dart.

Environmental Factors Affecting Dart Company

Every market has its distinguished standards of environment and norms, which can significantly impact the profitability of a particular organization in the market. Even within a single country, states can bear the additional liability and environmental laws. For instance, in the United States, the liability clauses of Florida and Texas are other in case of occurrence of a mishap. In the same issue, most countries in Europe give healthy tax breaks to those companies operating in the renewable sector. There is a need to evaluate environmental factors for any organization before getting into the market. Some of these factors include;

· Change of climate.

· Weather.

· Laws that govern pollution in the environment.

· Regulations on water and air pollutions.

· Recycling procedures.

· Management of waste in the sector of customer services.

· Species that are endangered.

· The attitude is shown towards ecological products.

· The kind of attitude towards renewable energy

Legal Factors Affecting Dart Company

In most countries, protection of the intellectual property rights of a firm is not robust hence reduced framework and institutions (Papoutsis, 2012). Before entering into a market, a firm is advised to evaluate legal factors to avoid theft of the secret in an organization hence the competitive edge overall. Some of the legal factors include;

· Protection of data of Dart Company.

· The laws of discrimination.

· Employment laws.

· E-commerce and protection of consumers.

· The laws related to anti-trust in the Transit industry in a country.

· Laws concerning health and safety.

Internal Analysis

The value chain of the activities of Dart Company in a specific case study; the regional agency of the transit company decided on whether to make modifications of routes that were poorly performing or cancel them (Papoutsis, 2012). These decisions caused a rise in many fundamental questions about the strategy Dart was taking as an agency of the public. This is a true revelation about the activities that the company values most. These activities include excellent and safe transport services by providing winning solutions and those values that benefit the customers and stakeholders in ways like integrity and innovation. Through the mission of this company, use of technology is used by energized people to deliver Dart Advantage safely and ethically using a solid return in the investments. The values embraced by the company include; inclusion, engagement, respect, stewardship, and integrity. Chart 2

Strengths and weaknesses

Strengths are relative to those of the competitors. It is one of the firms leading in the transit industry; therefore, it has numerous strengths. These advantages are that it helps protect the firm market share in the already current markets and the penetration of the new markets. The first strength is the strong network of distribution that this company has. This company has continually built a reliable distribution network in the past years and has reached its full potential in the market. The second strength is how the customers get satisfied with the company's services (Papoutsis, 2012). This is as a result of dedicated management towards the customers. The department in charge of this has helped achieve high customer satisfaction levels. This has helped develop a good brand name associated with this company that ensures equity among potential customers. The other strength is on strong dealer community. The culture built by this company among the dealers and distributors promotes the company's products. It also helps in investing in the training of the team associated with sales to explain to the potential customers how to extract maximum benefits of their services.

Additionally, this particular company has its weaknesses in which it can take an opportunity and make improvements (Dart Transit Company). This has been achieved using the SWOT analysis, and it helps the company build on its strategic positioning and competitive advantage. The first weakness is the lack of proper and efficient financial planning. For example, the current liquid asset ratios and current asset ratios imply that this company can use the cash more efficiently than what the company is doing at the moment (Papoutsis, 2012). The second weakness is that the company needs to invest more in new technologies. This follows the different geographies that the company intends to move to and the scale of expansion. More money should be invested in technology to integrate those processes across the board. At this moment, the level of technology is not at par with its company's vision (Chart 3). The other weakness is the lack of proper product demand forecasting. This has led to increased missed opportunities compare to this company's competitors. The reason why the days of inventory are higher than those of the competitors is due to the company's poor demand forecasting in both channel and house operations. Chart 4

Business-Level Strategy

The business-level strategy of Dart Transit Company concerns landing the customers' freight in the bull's-eye. This company gives provision to the transportation of truckload freight, arrangement of transportation of cargo using multiple methods like trains and trucks, which is commonly referred to as intermodal service (Papoutsis, 2012). The other service relates to benefits in terms of logistics which include warehousing and brokerage of freight. This company also offers dedication in transportation whereby the drivers plus the equipment are assigned to a particular customer on a long-term basis. These operations happen in the head-quarter of this company, located in Minnesota. The operations centers are found in Indiana and Texas, and the regional facilities are located across the entire United States. These strategies closely examine how this company competes in the transit industry, giving it a competitive edge in the market scope.

The actions of this company are majorly based on truck transportation, where it is subdivided into general and specialized freight trucking (Papoutsis, 2012). This gives a distinction that reveals the difference between the load carried and other networking services. General freight trucking is the generic strategy I have chosen because this group comprises establishments engaged in the general freight trucking provision. This establishment can handle several varieties in a range transported in a container. The establishment also combines line-haul, terminal operations, and local delivery.

This firm's strategy is in line with the strengths, weaknesses, threats, and opportunities that have been analyzed above (Papoutsis, 2012). This is because the dedication shown in the transportation industry in this firm is one of the major strengths. The drivers and various equipment are assigned to a customer long-term. It has provided the company with a competitive advantage which makes it thrive in the market scope (Dart Transit Company). The other strategy is on networking services which have continued to expand but are facing challenges because the vision of this company does not match with the level of technology. Subsequently, this has been identified as one of the significant weaknesses which the company should grab this opportunity and improve on the same for the future. With this, it is clear that the business strategy of Dart Company is in line with the SWOT analysis described above.

The competitive advantage of Dart Transit Company is in terms of logistics, where the supply chain needs are fulfilled with just one call. Through this advantage, the company's network can customize single-source solutions, hence encompassing all the requirements in the supply chain (Papoutsis, 2012). The power of extensive buying has helped the company negotiate and manage competitive contracts for warehousing, intermodal, truckload, and real-time inventory control. The whole distribution process meets demands through custom tailoring (Dart Transit Company). Dart Advantage Logistics can organize the services from purchasing to delivery. Another specialty is specialized shipping, whereby a team of experts is always ready to assist in technical shipping needs. This kind of freight is usually complex, but with such a dedicated team in conjunction with the carriers, shipment is delivered safely and at the right time.

The company has faced challenges both in the medium term of around three to five years and in the long run of exceeding five years. In the long run, the company has had complaints about the redundancy and overlapping of the bus routes. Therefore, the bus map had to be redrawn in 2018 with the consolidated courses and increased service in places with high demand. Very few buses reached out to the residents, so most people moved to houses close to the bus routes (Yildirim & Arefi, 2021). The other challenge is that the buses are late because of the few buses on the various ways. If the number increases, one would have more alternatives if one misses them. A short-term challenge that has been reported is that of lack of communication with the people. The company rarely publicizes meetings in town halls, and there are few instances where people can make decisions as a whole. Another long-term challenge is the company's difficulty luring new riders and retaining the existing riders. This happens in areas that have been designated for personal vehicles; thus, the people around that place prefer having their cars and having their supplies hauled around.