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, increasing household debt because of falling income levels, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing commodity prices, technology disruption,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid firm has clearly differentiated products in the market place. This has enabled Jek Jek's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Jek Jek's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Jek Jek's is one of the leading recruiters in the industry. Managers in the Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Jek Jek's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Jek Jek's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Training and development
– Jek Jek's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid 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.
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 -
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.
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.
Increasing silos among functional specialists
– The organizational structure of Jek Jek's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Jek Jek's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jek Jek's to focus more on services rather than just following the product oriented approach.
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.
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.
Low market penetration in new markets
– Outside its home market of Jek Jek's, firm in the HBR case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Andreas Pazi Raharso, Siew-Kien Sia suggests that, Jek Jek's 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.
Slow to strategic competitive environment developments
– As Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid HBR case study mentions - Jek Jek's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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.
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 -
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.
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.
Better consumer reach
– The expansion of the 5G network will help Jek Jek's to increase its market reach. Jek Jek's 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jek Jek's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
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.
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.
Manufacturing automation
– Jek Jek's 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jek Jek's in the consumer business. Now Jek Jek's can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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 Jek Jek's business can come under increasing regulations regarding data privacy, data security, etc.
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.
Shortening product life cycle
– it is one of the major threat that Jek Jek's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Jek Jek's 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.
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 .
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Jek Jek's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Go-Jek in Indonesia: Seizing Digital Opportunities at the Bottom of the Pyramid, Jek Jek's 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 Jek Jek's in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.