Running head: SWOT ANALYSIS

Module 3: SWOT Analysis

Team HAGGS (Hardworking, Adaptable Group Guiding Strategy)

OGL355: Leading Organizational Innovation and Change

Bill Erwin

July 15, 2020

Arizona State University

SWOT ANALYSIS
2

Amtrak

Amtrak is the nation’s intercity passenger rail operator and infrastructure

provider. We provide safe, efficient, and effective intercity passenger rail mobility

consisting of friendly, high-quality service that is trip-time competitive with other

intercity travel options, (Amtrak, 2020). Along with living their mission and values,

Amtrak’s use of data and SWOT Analysis ensure strategic planning is utilized to its

fullest. The following paper will give insights to Amtrak’s strengths, weaknesses,

opportunities, and threats and how these segments influence change and growth in their

industry.

SWOT Analysis

The following chart summarizes the internal and external factors of Amtrak,

providing a compilation of the company’s Strengths, Weaknesses, Opportunities, and

Threat. By recognizing the strengths and weaknesses of the organization, it will allow

Amtrak to evaluate its resources and capabilities (Coulter, 2013). Additionally,

identifying any opportunities and threats will assist Amtrak with scanning any positive or

negative trends that may affect the company’s performance (Coulter, 2013). The primary

objective of this analysis is to provide a deeper understanding of all the different elements

that surround Amtrak, prior to creating conclusive strategies. Utilizing this strategic

planning method will ensure Amtrak’s is fully operational and efficient as possible.
SWOT ANALYSIS
3

Strengths Weaknesses
● Connecting rapidly growing ● Aging fleet and equipment and
metropolitan areas across the risks associated
nation with rural areas through a ● Infrastructure capacity limitations
developing network of commercial ● Federal funding at discretion of
tracks Congress
● Customer experience at the ● COVID-19 pandemic
forefront of travel operations
● High cost recovery ratio that
creates cash for new infrastructure
investments
● Increase in stakeholder support
and growing stability of federal
funding for existing Amtrak
investments
● Experienced and well-trained staff
in all levels of the workplace
Opportunities Threats
● New and refreshed equipment. ● Alternate forms of transportation
● Redeveloped product elements that (Air, auto, bus)
strengthen ● Reduced federal funding
● customer experience while ● Private train firms
lowering costs and ● Rail accidents
● improving yield. ● Terrorism
● Consist and capacity planning to ● Poor economy
optimize
● Standards for efficient, consistent
and timely
● Co-branding opportunities to
increase revenue.
● Partnerships with connecting
transportation
● providers can strengthen last mile
service.
● Partnerships with destinations,
travel vendors,
● Capturing millennials as new
customers.
SWOT ANALYSIS
4
Strengths

Amtrak’s strength is their ability to focus efforts to cultivate a travel experience

that goes beyond basic needs and follows the organization’s social values and

commitment to their environmental impact. Travel demands have shifted dramatically

over the past few years, leading the forefront of innovation to be the determination of

how people will choose their travel methods. Amtrak offers a wide array of travel options

from daily commuters, cross-country travelers, and cost-conscious investors. Utilizing

their services and amenities on-board each train provides a productive and relaxing travel

environment for all. This strength is an asset for travelers of all lengths to have access to

the internet, no charge for baggage, and new destination connections and stops each

season. Accommodations have been made on trains to even include lactation rooms for

mothers as well as newly renovated disability accessibility on locomotives. Focusing

their efforts on creating a positive travel experience can lead to loyal travelers that build

rapport for the organization’s investors. Their research into the environmental impact of

their trains has shown Amtrak is 33% more efficient than traveling by personal cars. This

progress in reducing their environmental impact attracts societal investors to invest their

efforts into strengthening the longevity of the organization. Gaining stable investors is

another strength of Amtrak’s as the organization develops newfound infrastructure

investments that reap financial rewards. These new implementations within the

organization are only possible due to their strength in hiring a workforce that embodies

the organization's values of innovation, growth, and productivity. Amtrak’s strengths are

rooted in their desire to showcase their value of customer experience, and adaptability to

meet the needs of travelers, investors, and stakeholders that reflect their pillars of success.
SWOT ANALYSIS
5

Weaknesses

Amtrak has some evident weaknesses within the current operating structure. The

aging fleet and equipment Amtrak currently use must be modernized for safety,

efficiency, reliability, and amenities offered to maintain competitiveness within the

public transport market. Amtrak has also run into infrastructure restraints, especially on

the East Coast. The number of commuters has increased in metropolitan areas, yet

Amtrak’s brick and mortar locations are at or above capacity, making it difficult for

Amtrak to provide outstanding service and support to its customers. For Amtrak to

proceed with plans to upgrade the fleet, equipment, and infrastructure, funding must be

reliable. Considering Amtrak is a form of public transportation and requires massive

amounts of federal funding for capital and operating costs, Congress holds decision-

making authority over the amount of money Amtrak will receive annually (Amtrak,

2020). This makes effective strategizing difficult and requires Amtrak to prioritize their

strategy carefully to determine where they are willing to accept risk if they do not receive

the funding required to make all the upgrades/updates. In addition, the current crisis

facing our nation will have lasting effects on Amtrak’s processes, operability, and overall

revenue. The pandemic has required Amtrak to implement stringent sanitization and

social distancing precautions and commuter numbers have decreased due to government

shutdown and public transportation not being a preferred method of travel during the

pandemic. Amtrak has been dealing with decreased operations for months now, with no

end in sight.
SWOT ANALYSIS
6

Opportunities

Amtrak has a lot of opportunities for the future expansion of the company. Three

of the most important areas for opportunities: Advancement in technology, new upgrades

in equipment, and the pursuit of new client’s younger generations. These allow them to

stay on the forefront of transportation. The new advancements in technology allow them

to provide higher speeds of Wi-Fi allowing students, and businesses to conduct work

while on the way to their destination. The updating of technology also brings new

equipment which will allow for smoother rides and faster transportation. This will allow

for more rides per day, keeping the trains moving and keeping cost low for the users

which will entice more travelers. One of the consumer groups Amtrak is really pushing

for is the younger generations. Being able to keep relevant within the culture is an

important step, as flying and driving have become more mainstream types of

transportation. Upgrading technology and providing a comfortable environment with

faster speeds will keep Amtrak in the minds of a younger generation as a way to travel

for a more unique experience that will allow them to see the country in a whole new way.

Threats

The largest threat to Amtrak is alternate forms of transportation. Commuters in

the United States value their time and their money. When other forms of transportation

are cheaper and more time saving, it puts Amtrak at a severe disadvantage as a reasonable
SWOT ANALYSIS
7
option of travel. Amtrak has started to invest more into some of their short haul passenger

routes that have been more profitable. As ridership in these markets continues to grow,

the company has bold plans to soon expand routes, update its fleet, and improve

reliability (Short, 2019). These expansions and updates are going to need federal funding

from congress to meet the growing demand for higher speed rail. Another large threat for

the organization is if congress chooses not to renew funding or significantly reduces it.

The passenger railroad receives about $2 billion in federal subsidies annually to cover

operations in its national and Northeast networks (Lazo, 2020). Some other threats to the

organization include competition from private rail firms, rail accidents and terrorism.

The larger and looming threat is ultimately an economic downturn that would reduce

ridership, and it is something that Amtrak is starting to experience now. Due to the

current pandemic, Amtrak is asking for an additional $1.475 billion in additional

assistance. Ridership began to decrease by 95 percent systemwide beginning in March.

These disruptions set the railroad back after a year of growth on several routes and

derailed projections that 2020 would yield positive earnings for the first time in the

company’s 50-year history (Lazo, 2020).

Conclusion

Amtrak believes that state-supported corridors are the future of rail passenger

service in the U.S. The service characteristics of these corridors align with Amtrak’s

statutory goals and mission—many are trip time competitive; operate efficiently and they

minimize the federal subsidy required, (Amtrak, 2020). Over the last decade, ridership on

state-supported routes increased by more than 10 percent, making it the fastest growing
SWOT ANALYSIS
8
segment of Amtrak’s services. In FY 2018, more than 65 percent of Amtrak’s additional

riders came from the state-supported network. State-supported routes strengthen the

National Network by connecting nearby cities to each other, as well as connecting

smaller communities to larger economic hubs. In some rural areas, Amtrak is the only

provider of scheduled transportation, (Amtrak, 2020). The current threat of Covid-19 has

brought on many new challenges for Amtrak and the data found through their SWOT

analysis suggests that relying on less federal funding and more state funding is

instrumental to their survival. Having state-supported corridors will help Amtrak

capitalize on their strengths and invest in their opportunities as they continue to navigate

through strategies that help them remain competitive in the public transportation market.
SWOT ANALYSIS
9
References

Amtrak. (2020). Amtrak 5 Year Service Line Plans. Retrieved from Amtrak website:

https://www.amtrak.com/content/dam/projects/dotcom/english/public/documents/corpora

te/businessplanning/Amtrak-Service-Line-Plans-FY20-24.pdf

Coulter, M. K. (2013). Strategic management in action (6th ed.). New York, NY:

Pearson.

Lazo, Luz. (2020). “Amtrak Says It Needs Additional Bailout of Nearly $1.5 Billion to

Stay Afloat.” The Washington Post, WP Company, 26 May 2020,

www.washingtonpost.com/transportation/2020/05/26/amtrak-says-it-needs-another-15-

billion-bailout-stay-afloat/.

Short, A. (2019, November 11). Amtrak Wants To Compete With Planes And Roads.

Streetsblog USA. https://usa.streetsblog.org/2019/11/11/amtrak-wants-to-compete-with-

planes-and-roads/