Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid
This case chronicles Go-Jek's journey as Indonesia's first unicorn tech startup, which has been named by Fortune Magazine as one of the top 50 companies that "change the world". It highlights how Go-Jek leveraged on its on-demand mobile platform - arguably, the most complete ecosystem in South East Asia to create significant social and economic value for Indonesia, the world's fourth most populous country. It also reveals how Go-Jek capitalized on its local business understanding and data analytics to outmanoeuvre bigger competitors such Uber and Grab in Indonesia. Go-Jek has a saying: money can't buy time, but Go-Jek can buy you time. In particular, Go-Jek's motorbike delivery and ride-sharing app has enabled businesses and individuals to circumvent Jakarta's gridlock and achieve desired outcomes of increased sales and higher productivity. This has led to the positive effect of spurring the growth of Jakarta's informal economy.
Swot Analysis of "Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid" written by Andreas Pazi Raharso, Siew-Kien Sia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jek Jek's facing as an external strategic factors. Some of the topics covered in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid casestudy better are - – there is backlash against globalization, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption,
cloud computing is disrupting traditional business models, geopolitical disruptions, etc
Introduction to SWOT Analysis of Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jek Jek's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jek Jek's 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid can be done for the following purposes –
1. Strategic planning using facts provided in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid case study
2. Improving business portfolio management of Jek Jek's
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 Jek Jek's
Strengths Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jek Jek's in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid Harvard Business Review case study are -
Successful track record of launching new products
– Jek Jek's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jek Jek's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Jek Jek's in the sector have low bargaining power. Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jek Jek's to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Jek Jek's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jek Jek's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Jek Jek's 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Jek Jek's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Jek Jek's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Jek Jek's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Jek Jek's is present in almost all the verticals within the industry. This has provided firm in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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.
Superior customer experience
– The customer experience strategy of Jek Jek's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Jek Jek's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jek Jek's 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.
Operational resilience
– The operational resilience strategy in the Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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.
High switching costs
– The high switching costs that Jek Jek's 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.
Ability to lead change in Strategy & Execution field
– Jek Jek's 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 Jek Jek's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, is just above the industry average. Jek Jek's 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.
Lack of clear differentiation of Jek Jek's products
– To increase the profitability and margins on the products, Jek Jek's needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Jek Jek's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Jek Jek's 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Jek Jek's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Jek Jek's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, it seems that the employees of Jek Jek's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, 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.
Capital Spending Reduction
– Even during the low interest decade, Jek Jek's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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 Jek Jek's supply chain. Even after few cautionary changes mentioned in the HBR case study - Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jek Jek's vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Jek Jek's 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Jek Jek's has relatively successful track record of launching new products.
Opportunities Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid | 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid are -
Learning at scale
– Online learning technologies has now opened space for Jek Jek's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Jek Jek's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jek Jek's can use these opportunities to build new business models that can help the communities that Jek Jek's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Buying journey improvements
– Jek Jek's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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.
Building a culture of innovation
– managers at Jek Jek's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jek Jek's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jek Jek's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Jek Jek's can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Loyalty marketing
– Jek Jek's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Jek Jek's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jek Jek's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Jek Jek's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Jek Jek's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Jek Jek's 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.
Threats Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Jek Jek's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jek Jek's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid .
Environmental challenges
– Jek Jek's 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. Jek Jek's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Jek Jek's.
Technology acceleration in Forth Industrial Revolution
– Jek Jek's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Jek Jek's needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Jek Jek's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Jek Jek's.
Consumer confidence and its impact on Jek Jek's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jek Jek's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Jek Jek's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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. Jek Jek's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jek Jek's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Jek Jek's in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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 Jek Jek's needs to make to build a sustainable competitive advantage.
