Evaluation Essay on Eddie Stobart

Introduction

Strengths

One of the key strengths of Eddie Stobart is the pay-as-you-go, scale enabled, shared-user network approach which maximises warehouse and fleet utilisation. This approach has differentiated Eddie Stobart from competitors providing a competitive edge to the firm thus attracting more customers. It has also enabled the company to provide cost-effective supply chain solutions to its customers because the approach is flexible allowing Eddie Stobart to empty vehicle miles, improving utilisation to above 86% compared to industry average of 71% (Eddie Stobart Logistics Plc, 2016).

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Another strength for Eddie Stobart is the focused development of the workforce. According to Mayo (2016), employees make up an essential capital for any company and determine the success of that particular business. Eddie Stobart has over 5,500 members of staff including 3,800 divers (Eddie Stobart Logistics Plc, 2016). The company has a training program as an integral part of the development of the business. Eddie Stobart has continued to expand its training academy to focus on tailored courses for the employees. Specific training in specific vital areas including specialist equipment and health safety and license acquisition has helped the company attract and retain talent (Eddie Stobart Logistics Plc, 2016). Talented employees drive the company performance. All the new employees undergo an induction to familiarise with policies and procedures to deliver high-quality service in line with company standards (Eddie Stobart Logistics Plc, 2016).

Weaknesses

Eddie Stobart relies on key customers (who comprise a small number) from whom it derives a significant amount of its revenue. For example, in the 2016 financial year, top 20 customers by revenue represented 75% of entire revenue (Eddie Stobart Logistics Plc, 2016). It is very risky for the company to rely on only a few customers to drive its financial flows since the loss of one or two of these key customers will negatively hurt its liquidity. Also, when such customers realize how important they are to the company, they are likely to bargain for better contract terms which can reduce firm profits (Macaulay, 2018.

Furthermore, Eddie Stobart relies on operational sites in Europe and UK only as fundamental to its business operations (Eddie Stobart Logistics Plc, 2016). The company has failed to diversify its operational locations. In the event that disruptions arise in these operational sites, for instance, due to terrorist incidents or floods, the operations of the company will be adversely affected and may even come to a standstill.

Opportunities

Technological advancements present as the main opportunity to Eddie Stobart. New technologies allow the company to increase efficiency and further differentiating its products and services (Eddie Stobart Logistics Plc, 2016). As a result, the firm will lower prices for customers. It shall also maintain loyal customers while luring new ones to increase its customer base and company performance.

Also, the fact that the company is operating in EK and Europe along means that there is a market for expansion into other countries in America, Asia, and Africa. Asian countries such as China are which emerging economies present potential markets are. The firm can expand its operations in these countries. It can thus increase its profitability.

Threats

Legislative changes present a critical threat to profit-making and existence of Eddie Stobart. Eddie Stobart is subject to regulation and legislation in areas such as health and safety, working time, fuel costs, road duties, and environment (Eddie Stobart Logistics Plc, 2016). All these can have a significant impact on operational areas meaning that unfavourable legislations can negatively impact a firm's financial conditions and future prospects. Unfavourable legislations can put the company at financial problems.

Conclusion

Whereas Eddie Stobart is currently enjoying high flexibility, talented workforce and strong performance in the market with possible higher efficiency in future as technological advancements work in its favour, there are significant weaknesses and threats that need to be addressed. The company needs to diversify its customer base as well as operational sites. It also needs to work closely with administrative agencies that make policies that could affect its existence.

References

Eddie Stobart Logistics Plc, 2016. Placing and admission to Aim. [online] Black & Callow. Available at: http://eddiestobart.com/uploads/freeform-applicant/Admission_Document.pdf [Accessed 30 Nov. 2018].

Jackson, S.E., Joshi, A. and Erhardt, N.L., 2003. Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), pp.801-830.

Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and Society Canon (pp. 155-167). Routledge.

Mayo, A., 2016. Human resources or human capital?: Managing people as assets. Routledge.