Norfolk Southern Corporation (NSC) SWOT and PESTLE Analysis

Strength

1. Network reach covers diverse markets: Norfolk Southern is an important part of the U.S. freight transportation network. The company transports everything from raw materials to intermediate goods and finished products. This premier transportation service provides access to all the major manufacturing and industrial bases within America as well as to several key retail markets. It has over 3700 customers with monumental potential for growth. The primary customers of the company are based in the US and belong to the manufacturing and energy sectors. Norfolk has also maintained a strong and diverse merchandise portfolio that includes a coal franchise and over 250 short line railroad partners within the eastern US. This helps the company in effectively serving customers and adding value to its services.

2. Enjoys majority intermodal market share in the East USA: Around 53' truckload freights can be shipped using two methods for which intermodal has emerged as an alternative. Railroad shipping is usually used for long distance transport and Norfolk has managed to emerge as the biggest market share holder for intermodal transport in the East USA with 55 Intermodal terminals and major East Coast ports. The company manages 26 Norfolk Southern served assembly plants and is the largest originator of finished vehicles.

3. Access to major coal basins with a diversified customer base: Norfolk Southern transports supplies to 70 generating stations in the eastern U.S. power market. It also offers global transportation options to its customers. The fact that the company is able to reach all the operational blast furnaces within the U.S has given it a strong edge over its competitors. Opportunities for growth are also present in the basins of Northern Appalachia, Central Appalachia, Illinois and Powder River.

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Weakness

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Opportunity

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Threat

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Political

1. Involvement in lobbying and political process: The decisions of federal, state, and local governments affect corporations in general and railroads in particular on a daily basis. Proposals to change existing laws, new laws, and new policy initiatives can impact railroad's business, and in turn affect its stakeholders. The political process significantly impacts Norfolk Southern through government policies, legislation, and regulatory decisions and it is in the best interests of Norfolk Southern and our stockholders for the Corporation to participate in the political process by engaging in a government relations program. Although federal law prohibits companies from contributing to candidates for federal office, many states allow corporate contributions to state and local candidates, committees, and political organizations, including tax-exempt organizations. The government relations program seeks to educate and inform public officials about issues important to its business, and it supports public officials and candidates whose views match those of Norfolk Southern. By doing so, Norfolk Southern furthers public policy goals that are consistent with its business and values.

2. Participation in trade organizations: The members of the industry regularly engage in trade organization events which help members work together and address industry issues like safety, operations and business. Norfolk Southern too, takes part in such trade organizations and chambers of commerce. Through this participation, Norfolk employees are able to gain access to several educational and public relations activities, industry conferences and networking opportunities.

Economic

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Social

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Technological

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Legal

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Environmental

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