Cummins SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Investment towards the development of electric powertrain product line: Cummins has well recognized the developments in the market and has a well-developed roadmap for the upcoming years that is realistic and viable. Towards this direction, Cummins has planned to make an investment of $500 Million in upcoming years towards the development of electrified powertrain product line along with several other key products with full electrification. This investment is of course not even near to the investments done by players like Daimler, BMW or other such companies. Nevertheless, considering the fact that the technology to provide actual viable long-haul electric trucks is 10-15 years away, this investment in the initial phase is not that small and is in a way, contributing towards its strategy. This timeline is actually an opportunity for Cummins to take each and every step towards the development of electric vehicles cautiously and to make sure that it does not miss out on any development in the field.

2. Opportunities in the e-commerce segment: As a step towards developing an even stronger relationship with customers, Cummins is now tapping e-commerce sales and data. Cummins has come up with a new online store named shopcummins.com which enables its North America customers to shop for Cummins’ products online. Previously, shopcummins.ca was launched for its Canadian customers in June 2018. The U.S site offers more than 200 products to choose from for its customers. The product portfolio includes Valvoline oil, Fleetguard filters, Power Service fuel additives, coolants and maintenance kits, Onan Rv generator parts, Webasto air, and coolant heaters. Other features offered include full-site mobile optimization, hassle-free return policy, registration for receiving exclusive offers and promotions, ability to shop on the go, different shipping options including in-store pick up at local Sales & Service centers in U.S. Not only that, customers will benefit from its user-focused experience, quick and easy access to these products thus saving time and online help with the overall buying process. This step by Cummins is a great opportunity for Cummins to serve its longtime existing customers better and also build relationships with new prospective customers. Not only that, customers will benefit from its user-focused experience, quick and easy access to these products thus saving time, and online help with the overall buying process.

3. Tapping into new areas of technology: Cummins has also been known as the pioneer in diesel-engines but now Cummins is not limiting itself to that area anymore. Cummins is now looking for newer technologies and areas which have substantial future potential. An example of it is Cummins acquiring Hydrogencies Corporation. Hydrogencies is a global leader in hydrogen and fuel cell solution provider in the power industry and one of the leading hydrogen generation equipment and fuel cell providers to Cummins. Also, Cummins announced the launch of PrevenTech for Mining, a new advanced Remote Monitoring Solution for Mining. It helps in a continuous analysis that helps in improving mine site productivity and mitigating performance impacts by streamlining service planning and maintenance. The technology collectively makes use of big data, advanced analytics to engine hardware and connectivity to diagnose and identify the performance issues in a more efficient way by making use of global security standards and IoT (Internet of things) technology. The use of such latest technologies not only enables Cummins to work efficiently but also provides an opportunity to have a competitive advantage over others.

Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. A strong focus by Cummins towards Environmentally Sustainable projects: Cummins set for itself seven Environmental Sustainability goals to be achieved till 2020 and it has been able to achieve two out of them before than the scheduled time. These are reducing the carbon dioxide emissions through collaborative projects with various customers and reducing the water used per hour worked. The goals yet to be worked upon are increasing the recycling rate to 95%, zero disposal site goals, meeting its water neutrality and reducing the carbon dioxide emissions within the company’s network from the shipment of goods by 10%. 76 new products have been implemented in use projects in 2018 by Cummins fuel teams throughout which makes the total number of initiatives with customers to be 300 since 2014. Also, Cummins' water neutrality goal of having the water neutrality at 15 sites by 2020 is in progress and 8 sites have been validated as water neutral till date. Cummins has been able to reach 90% recycling mark for the second consecutive year which is short by 5% of the company's 95% goal but still impressive. The inability to meet this goal is owed to the regulatory barriers in regions like China and India which have problematic waste streams. Thus, overall it is evident that Cummins is well focused towards environmentally sustainable projects and is doing reasonably well in the direction.

2. An effort towards making Manufacturing and Environmentalism go together: Often, Manufacturing, and Environmentalism do not go together but Cummins is working head on towards making these two work in harmony. It always starts with a small single step and this step for Cummins has been to implement high-efficiency LED lighting at all of its manufacturing facilities. The implementation of solar panels in its manufacturing facilities in Mexico, New York, China, and eight other locations is another step. Cummins formed a group of people which were earlier called Energy Champions and now Environmental Champions has played a key role in Cummins Environmental goals. This group comprises of around 1000 employees across the globe and has been trained to look for savings in energy, waste, and water at their facilities and plants. The group has helped to replace inefficient equipment, fix leaks and even to change some practices in resource utilization. Overall, these improvements have been able to make a huge difference. Finally, Cummins has invested in "Regen Dynos” which are regenerative dynamometers able to capture the energy which is generated during engine testing and send it back to the grid. Also, they use lesser water than conventional dynos. The latest regen dyno technology has been implemented in plants in Brazil, India and the United Kingdom and plants in these countries are generating as much as 20% of its electricity needs through these dynos.