Case Study Description of Governor Basuki Tjahaja Purnama and Jakarta's Transformation
City transformation is complex. This case study examines the combination of policies and management decisions undertaken by Mr Basuki Tjahaja Purnama (Ahok) in transforming Jakarta, the capital city of Indonesia. Jakarta had been facing serious urban development issues that affect the economy and political stability of Indonesia. Despite well-laid out plans where he aimed to alter the oft-regarded corrupt and incapable bureaucracy in Jakarta into a clean, capable and efficient administration, Ahok faced many leadership challenges when implementing large-scale transformation of major city in a developing country.
Authors :: Andreas Pazi Raharso, June Gwee, Boon Siong Neo
Swot Analysis of "Governor Basuki Tjahaja Purnama and Jakarta's Transformation" written by Andreas Pazi Raharso, June Gwee, Boon Siong Neo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jakarta Ahok facing as an external strategic factors. Some of the topics covered in Governor Basuki Tjahaja Purnama and Jakarta's Transformation case study are - Strategic Management Strategies, Innovation, Leadership, Policy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Governor Basuki Tjahaja Purnama and Jakarta's Transformation casestudy better are - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
increasing household debt because of falling income levels, increasing energy prices, etc
Introduction to SWOT Analysis of Governor Basuki Tjahaja Purnama and Jakarta's Transformation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Governor Basuki Tjahaja Purnama and Jakarta's Transformation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jakarta Ahok, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jakarta Ahok 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation can be done for the following purposes –
1. Strategic planning using facts provided in Governor Basuki Tjahaja Purnama and Jakarta's Transformation case study
2. Improving business portfolio management of Jakarta Ahok
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 Jakarta Ahok
Strengths Governor Basuki Tjahaja Purnama and Jakarta's Transformation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jakarta Ahok in Governor Basuki Tjahaja Purnama and Jakarta's Transformation Harvard Business Review case study are -
High switching costs
– The high switching costs that Jakarta Ahok 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.
Operational resilience
– The operational resilience strategy in the Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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.
Diverse revenue streams
– Jakarta Ahok is present in almost all the verticals within the industry. This has provided firm in Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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.
Effective Research and Development (R&D)
– Jakarta Ahok 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Jakarta Ahok is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Jakarta Ahok has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jakarta Ahok to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Jakarta Ahok 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 Jakarta Ahok in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Governor Basuki Tjahaja Purnama and Jakarta's Transformation firm has clearly differentiated products in the market place. This has enabled Jakarta Ahok to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Jakarta Ahok to invest into research and development (R&D) and innovation.
Analytics focus
– Jakarta Ahok 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 Andreas Pazi Raharso, June Gwee, Boon Siong Neo 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.
Cross disciplinary teams
– Horizontal connected teams at the Jakarta Ahok 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.
Successful track record of launching new products
– Jakarta Ahok has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jakarta Ahok 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.
Superior customer experience
– The customer experience strategy of Jakarta Ahok in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Governor Basuki Tjahaja Purnama and Jakarta's Transformation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Governor Basuki Tjahaja Purnama and Jakarta's Transformation are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation, in the dynamic environment Jakarta Ahok has struggled to respond to the nimble upstart competition. Jakarta Ahok has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jakarta Ahok is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation, is just above the industry average. Jakarta Ahok 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.
Increasing silos among functional specialists
– The organizational structure of Jakarta Ahok is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Jakarta Ahok needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jakarta Ahok to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Jakarta Ahok 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.
Slow to strategic competitive environment developments
– As Governor Basuki Tjahaja Purnama and Jakarta's Transformation HBR case study mentions - Jakarta Ahok 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Andreas Pazi Raharso, June Gwee, Boon Siong Neo suggests that, Jakarta Ahok 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.
High cash cycle compare to competitors
Jakarta Ahok 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.
Interest costs
– Compare to the competition, Jakarta Ahok 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Jakarta Ahok 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.
No frontier risks strategy
– After analyzing the HBR case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation, 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.
Opportunities Governor Basuki Tjahaja Purnama and Jakarta's Transformation | 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation are -
Using analytics as competitive advantage
– Jakarta Ahok 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jakarta Ahok to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Jakarta Ahok can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Jakarta Ahok 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. Jakarta Ahok 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jakarta Ahok 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, Governor Basuki Tjahaja Purnama and Jakarta's Transformation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Jakarta Ahok 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.
Leveraging digital technologies
– Jakarta Ahok 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.
Manufacturing automation
– Jakarta Ahok 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jakarta Ahok is facing challenges because of the dominance of functional experts in the organization. Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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.
Better consumer reach
– The expansion of the 5G network will help Jakarta Ahok to increase its market reach. Jakarta Ahok 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jakarta Ahok 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 Jakarta Ahok to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Jakarta Ahok 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jakarta Ahok can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Jakarta Ahok can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Governor Basuki Tjahaja Purnama and Jakarta's Transformation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation are -
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 Jakarta Ahok in the Strategy & Execution sector and impact the bottomline of the organization.
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. Jakarta Ahok can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jakarta Ahok with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Jakarta Ahok business can come under increasing regulations regarding data privacy, data security, etc.
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. Jakarta Ahok 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Governor Basuki Tjahaja Purnama and Jakarta's Transformation, Jakarta Ahok 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 .
Technology acceleration in Forth Industrial Revolution
– Jakarta Ahok has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Jakarta Ahok 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.
Stagnating economy with rate increase
– Jakarta Ahok 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.
Environmental challenges
– Jakarta Ahok 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. Jakarta Ahok can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Jakarta Ahok 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.
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.
Increasing wage structure of Jakarta Ahok
– 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 Jakarta Ahok.
Weighted SWOT Analysis of Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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 Governor Basuki Tjahaja Purnama and Jakarta's Transformation 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 Jakarta Ahok needs to make to build a sustainable competitive advantage.