Internal Constraints US

Capital – This is the money that the company has available as funds e.g. expand etc. The more capital a company has available the more they are able to do. For swift transport, they want to expand by taking over other companies and diversify, which is one of its main aims.

For them to do this they will need quite a large amount of funds to take over companies. But the problem with this if swift does not have enough capital to fund itself. This would affect the decision makers, as they would be limited in diversifying, as they would have to get a company they can afford. So swift might not be able to overtake a company it wants to as it cannot afford it but get another which might not as profitable.

Labour – Swift might face problems with employees, such as overworked, underpaid, unhappy with this/that etc. This can cause problems and conflicts between the management and workers (industrial relations), which might result in even more problems such as strikes, boycotting work, no more overtime etc. This could cost swift a lot of money. Also with swift taking over other companies the employees might fear for their job security, as jobs may be lost.

This might cause even more problems. This can affect the decision makers in the business, as they will have to concentrate on employee/employer relations, which will cost money and take time. Also there are always risks when they want to diversify that the employees might rebel against it and strike, boycott work, no overtime etc. So swift will have to try to ensure job security by offering extra training, or promoting etc.

Promotion – Promotion is vital for all companies so that people are aware of their service. Also extra advertising and promotion would be needed in order for people to use the service. For a company to be successful it will need consumers to use their service and this is the basis of which reputation is built on.

All this will cost money and swift will need to use its capital, also it will need the marketing department to be efficient. But if the marketing department were not, then the business would start to fail and could go out of business. This will affect the decision makers in the business, as they will have to make this their main priority so that they can receive sales revenue. 

Trades Union membership – Trades Union membership causes problems, as swift will have to deal with them and the employees. This would take up time, which swift would need and it could work against swift, e.g. the trade's union urging workers to strike. The company will have to give into the union's demands, which might affect other projects, thus preventing other things to happen quickly.

Transport – Transport is the main asset that swift owns, as its whole service is based around them and without transport swift would definitely go out of business. As swift will have a lot of automobiles, they will have to pay the additional costs such as fuel prices, registration prices, insurance, road tax etc. As they will have a lot of automobiles, these costs altogether would add up to a large amount, which the company has to pay for.

This will prevent the decision makers in the company from investing money into the business or into diversifying as a lot of money will go on the costs. Also swift will need the transportation to be efficient enough to meet the customer demands and also if they are thinking of transporting goods to Europe, if these can cope.

Communication – Good communication is needed between the workers of swift and the management, and so they will need good industrial relations. If not problems can arise which could slow down the business (explained before). As well as maintaining a good communication within swift, they will need good communication between Happy hols, especially the management. If swift does not have good communication, then this can cause the management to disagree, and this again would lead to incorporation between the two companies. This would prevent swift from using happy hols as one of its business ventures.

Physical resources – Swift always needs physical resources available for the company to run, this mainly being transport available to do the jobs set. If swift do not have enough vehicles, it would prevent them from satisfying demand and this would lead to them having a bad name. Also they would lose money, which they could use to invest in other ventures. Swift then needs to know how may vehicles it needs and how many more it will need. This means that they will have to employ more workers meaning more money lost.

External Constraints

Legislation – Swift Transport Plc has to comply with the rules and regulations that the government have set. Such acts include the race relation's act, sex discrimination act, equal pay act. The main act that swift will have to comply with is the merger act due to the plans to diversify.

The company will have to comply with these acts because if they do not, it can cause them to run into trouble with the government. This can result in swift paying fine, losing their reputation or even being shut down. So swift will need to comply with these acts by employing a multi cultural work force of both sexes and of a varied age etc. The acts also affect swift's plans of diversifying.

Competition – All companies face opposition from other similar companies who operate in the same market. Swift will have to compete with rival road haulage companies, which will want to do better than them. Swift will have to try and do better than its competitors as much as it can. This means to try and increase their market share and to try and sell as much service as possible.

This will be mainly down to their marketing team who will try and increase brand loyalty. Rival competitors can cause swift to loose sales, resulting in lower sales and losses. This means that swift would loose a lot of money which it could re-invest somewhere else. Swift should conduct market research so that they can provide the customer with a better service, and this has to be done regularly.

Currency – As swift works in Europe now, currency will be a problem. When they provide a service the exchange rates might be lower than those in neighbouring countries meaning that swift would loose large amounts of money when it is converted to sterling. This will make swift loose money and make them reluctant to work in countries where the exchange rates are low. Also currency rates are always fluctuating and this can cause a problem as well. To prevent this swift should work in countries, which have high rates or work with countries that use the Euro.

EU – The European union is a problem to Swift, as it has to comply with their regulations. If they do not swift would be refused to trade with other countries. This would make swift loose money and would not allow them to internally expand e.g. region organisation.

State of Market – The state of the market will determine how much sales revenue swift will receive. If there were a boom in the market this will allow swift to sell more of their service, as people will be spending more, this means that swift would be receiving more profits and probably achieving economies of scale. But when the market is in recession, this would cause people to spend less and swift's sales revenue would fall due to less money. This would make them lose money, which they could invest.

Environment – Swift as a road haulage business i9s bound to cause some pollution due to all the exhausts of the lorries, vans etc. Environmental groups such as Greenpeace would campaign against swift and would possibly cause disruption. This would cause swift to slow down, as they would not be able to work as efficiently due to pressure from these groups. This would cause them to loose money and to try and satisfy these groups.

Media – The media can be very damaging to companies with their damaging reviews and reports, especially if the company is facing legal action. Therefore swift will need to be careful what it does in the public eye and maintain good public relations. 

Advertising standards authority – The ASA is a board of authority, which monitors all, advertising except that on T.V. and radio. The British codes of advertising and sales promotion state that advertising must be legal, decent and truthful, and must not cause offence. If Swift Transport Plc broke these codes, the ASA would make it uncomfortable for Swift until they withdraw the advert. Also the ASA could report Swift to the office of fair-trading, which can prevent certain claims in future adverts. Swift must then try not to break these codes and design adverts, which are suitable to all the public.

I used textbooks to find all the constraints and also my own knowledge when applying them. The strengths of this are that I mention a lot of the internal and the external constraints that would affect Swift. The weakness of it is that I do not explain how it prevents the business to follow a certain course of action very well. I could improve it by going into more detail in explaining the knock on effects.