Internal Environment Analysis of NITL
The National Industrial Transportation League (NITL) is a non-profit trade organization that serves shippers of all manner of goods. The NITL is looking for ways to grow their membership and thus their revenue base in order to further fund their ultimate goals of helping to shape public shipping policy and to be “the voice of the shipper”. In order to accomplish this we have already examined their external environment and will now look inwards towards their internal environment. This involves looking at their resources, their capabilities, and then their core competencies.
Resources
An organization’s resources can be divided into two types, tangible and intangible. Tangible resources are those that can be seen, and touched, and measured. These include financial resources, physical resources, and technological resources. Intangible resources are those that are not touchable and not easily quantified. They are comprised of human resources, knowledge capital, organizational structure and brand or reputational resources.
NITL’s tangible resources begin with their financial resources. While this resource was previously a strength of the organization, it has become a weakness and the main reason why they are reaching out for help. During the recession of 2008-09 the league lost a good deal of its membership and many have not renewed now that the economy has made a turn for the better. As far as physical resources, the league is run out of an office in Washington, D.C.. The proximity of the office to Capitol Hill makes it more convenient and cheaper for the CEO to work with legislators and lobbyists. The office equipment seems to be sufficient for the type of work that the organization does. One of the technological resources that the firm possesses is their website. This may be seen as a weakness as the site is fairly pedestrian and does not seem to add any value. They also have an email list where they can easily and quickly share breaking news information electronically.
The intangible resources are much more valuable to this organization than any tangible resource they possess. Probably the biggest of these is the brand and brand history. It has been built over 100 years and has industry wide recognition as the “voice of the shipper”. This is definitely a strength for the NITL but the image has seemingly lost some of its value recently. The second largest intangible resource is their human resources. This starts at the top with the CEO and the vast amount of knowledge and insight that he brings to the table. That is paired with the collective knowledge base of the executive committee and the members themselves. This is then followed by Ellie and her seemingly stout commitment to the organization and the vast array of different “hats” that she wears for the organization. The knowledge capital that Bruce Carlton and the executive committee bring is definitely a strength, but the massive HR concentration in one employee is definitely a weakness. While it may be a strength to have such a versatile and committed employee, it poses a huge risk if that employee were to be lost. Lastly, they have an intangible resource of being independent of any of their member companies.
Capabilities
Capabilities are derived from a firm’s resources. For the NITL, their main capability is derived from their knowledge base of both transportation issues and the ability to navigate Washington’s political process. CEO Bruce Carlton has spent a career in building this knowledge base on the government side of the rail and now as the CEO of the NITL is leveraging that knowledge along with the collective knowledge of the NITL executive committee to further the interest of the overall shipping community. Another capability that they that is derived from Carlton’s close connection to shipping issues and to Washington news is the ability to quickly disseminate current issues and breaking news to NITL members. The fact that they are independent of any of their members also gives the NITL the capability of acting as a public relations shield for these firms so that they don’t have to “get their hands dirty” so to speak.
Core Competencies
Core Competencies are derived from an organization’s capabilities and serve as the back bone of their competitive advantage. The core competencies for the NITL would definitely be lobbying , distributing information to their members, and providing a PR shield for member companies when dealing with controversial issues. These are also the core goals of the organization.
Now for a competitive advantage, the NITL may not currently have one. For a firm or organization to have a sustainable competitive advantage, their core competencies must be valuable, rare, costly to imitate, and non-substitutable. The only substitution for the NITL is to just not lobby at all so they are fairly non-substitutable. But many organizations seem happy to just not lobby and ride the coattails of the companies that do lobby. The knowledge base that the NITL has compiled is definitely costly to imitate but may not be as rare as they may want to believe. There are several vertical trade organizations that do what the NITL does, just not on as wide of a scale. But these other organizations can provide a lot of the same benefits and may be more targeted towards their member’s specific industries. And lastly, the NITL’s core competencies are just not as valuable as they need them to be in order to hold that competitive advantage. This is obviously evidenced in the fact that they are having trouble selling membership at what is described as a competitive price.
Conclusion
After looking at the NITL’s internal environment, we see that they have an issue with value. The problem with their declining membership seems to be an issue derived from a mix of their internal and external environments. After speaking with their top leadership, it’s hard to get a grasp on their value proposition or what differentiates them from the growing list of trade organizations. In order reclaim their competitive advantage, these are the questions that must be answered.