Balancing Stakeholder Interests at the Indonesian Railways SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Balancing Stakeholder Interests at the Indonesian Railways
The chief executive responsible for the Indonesian railways, a state-owned enterprise, is under pressure to show profits, but he also needs to balance widely diverging stakeholder expectations that include inexpensive transportation and excellent customer service. The government subsidizes the railway's passenger travel segment and has capped its fare prices, which has turned the railway's mainstay into a loss-making business. The chief executive wonders how to best trade off the different stakeholder expectations. He needs to develop a plan to present to the minister for State-Owned Enterprises. Author Marleen Dieleman is affiliated with the National University of Singapore.
Swot Analysis of "Balancing Stakeholder Interests at the Indonesian Railways" written by Marleen Dieleman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Railway's Stakeholder facing as an external strategic factors. Some of the topics covered in Balancing Stakeholder Interests at the Indonesian Railways case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Balancing Stakeholder Interests at the Indonesian Railways casestudy better are - – technology disruption, challanges to central banks by blockchain based private currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing energy prices,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Balancing Stakeholder Interests at the Indonesian Railways
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Balancing Stakeholder Interests at the Indonesian Railways case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Railway's Stakeholder, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Railway's Stakeholder operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Balancing Stakeholder Interests at the Indonesian Railways can be done for the following purposes –
1. Strategic planning using facts provided in Balancing Stakeholder Interests at the Indonesian Railways case study
2. Improving business portfolio management of Railway's Stakeholder
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Railway's Stakeholder
Strengths Balancing Stakeholder Interests at the Indonesian Railways | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Railway's Stakeholder in Balancing Stakeholder Interests at the Indonesian Railways Harvard Business Review case study are -
Training and development
– Railway's Stakeholder has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Balancing Stakeholder Interests at the Indonesian Railways Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management
– Railway's Stakeholder is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Railway's Stakeholder are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Railway's Stakeholder has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Balancing Stakeholder Interests at the Indonesian Railways - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Railway's Stakeholder digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Railway's Stakeholder has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Strategy & Execution industry
– Balancing Stakeholder Interests at the Indonesian Railways firm has clearly differentiated products in the market place. This has enabled Railway's Stakeholder to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Railway's Stakeholder to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Railway's Stakeholder has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Balancing Stakeholder Interests at the Indonesian Railways HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Railway's Stakeholder is present in almost all the verticals within the industry. This has provided firm in Balancing Stakeholder Interests at the Indonesian Railways case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Railway's Stakeholder has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Railway's Stakeholder is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Marleen Dieleman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Strategy & Execution field
– Railway's Stakeholder is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Railway's Stakeholder in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Balancing Stakeholder Interests at the Indonesian Railways Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Balancing Stakeholder Interests at the Indonesian Railways | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Balancing Stakeholder Interests at the Indonesian Railways are -
Increasing silos among functional specialists
– The organizational structure of Railway's Stakeholder is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Railway's Stakeholder needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Railway's Stakeholder to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Balancing Stakeholder Interests at the Indonesian Railways, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Railway's Stakeholder supply chain. Even after few cautionary changes mentioned in the HBR case study - Balancing Stakeholder Interests at the Indonesian Railways, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Railway's Stakeholder vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Railway's Stakeholder has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Balancing Stakeholder Interests at the Indonesian Railways has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Railway's Stakeholder 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Railway's Stakeholder needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Railway's Stakeholder has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Railway's Stakeholder products
– To increase the profitability and margins on the products, Railway's Stakeholder needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Marleen Dieleman suggests that, Railway's Stakeholder is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Balancing Stakeholder Interests at the Indonesian Railways, is just above the industry average. Railway's Stakeholder needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Railway's Stakeholder, firm in the HBR case study Balancing Stakeholder Interests at the Indonesian Railways needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Balancing Stakeholder Interests at the Indonesian Railways | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Balancing Stakeholder Interests at the Indonesian Railways are -
Better consumer reach
– The expansion of the 5G network will help Railway's Stakeholder to increase its market reach. Railway's Stakeholder will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Railway's Stakeholder can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Railway's Stakeholder to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Railway's Stakeholder has opened avenues for new revenue streams for the organization in the industry. This can help Railway's Stakeholder to build a more holistic ecosystem as suggested in the Balancing Stakeholder Interests at the Indonesian Railways case study. Railway's Stakeholder can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Railway's Stakeholder is facing challenges because of the dominance of functional experts in the organization. Balancing Stakeholder Interests at the Indonesian Railways case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Railway's Stakeholder can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Using analytics as competitive advantage
– Railway's Stakeholder has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Balancing Stakeholder Interests at the Indonesian Railways - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Railway's Stakeholder to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Railway's Stakeholder can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Railway's Stakeholder can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Railway's Stakeholder can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Balancing Stakeholder Interests at the Indonesian Railways suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Railway's Stakeholder to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Railway's Stakeholder to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Railway's Stakeholder in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Railway's Stakeholder can use these opportunities to build new business models that can help the communities that Railway's Stakeholder operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Balancing Stakeholder Interests at the Indonesian Railways External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Balancing Stakeholder Interests at the Indonesian Railways are -
Stagnating economy with rate increase
– Railway's Stakeholder can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Railway's Stakeholder in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Railway's Stakeholder.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Balancing Stakeholder Interests at the Indonesian Railways, Railway's Stakeholder may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Railway's Stakeholder in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Railway's Stakeholder with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Railway's Stakeholder needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Railway's Stakeholder business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Railway's Stakeholder needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Environmental challenges
– Railway's Stakeholder needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Railway's Stakeholder can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Consumer confidence and its impact on Railway's Stakeholder demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Balancing Stakeholder Interests at the Indonesian Railways Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Balancing Stakeholder Interests at the Indonesian Railways needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Balancing Stakeholder Interests at the Indonesian Railways is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Balancing Stakeholder Interests at the Indonesian Railways is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Balancing Stakeholder Interests at the Indonesian Railways is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Railway's Stakeholder needs to make to build a sustainable competitive advantage.