APLO: Optimal Supply of Street Lights SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of APLO: Optimal Supply of Street Lights
APLO was a reputable supplier of LED lighting systems for diverse countries from Taiwan to the United Kingdom. In 2015, APLO signed a contract to supply and install 30,000 pieces of 60-watt ecological street lights in several towns within one of Indonesia's provinces. With over 250 million inhabitants, Indonesia was in dire need of modernizing its infrastructure as it expanded economically. Having already been contracted for street lighting in several parts of Jakarta, Indonesia's capital city, APLO was eager for more projects across Indonesia. Would APLO be able to make this its showcase project and win many more contracts throughout Indonesia's 34 provinces? Singfat Chu is affiliated with NUS Business School, Mochtar Riady Building.
Authors :: Singfat Chu, Nicole Lo, Clark Hsu, Masahiro Okumura
Swot Analysis of "APLO: Optimal Supply of Street Lights" written by Singfat Chu, Nicole Lo, Clark Hsu, Masahiro Okumura includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aplo Indonesia's facing as an external strategic factors. Some of the topics covered in APLO: Optimal Supply of Street Lights case study are - Strategic Management Strategies, Manufacturing, Project management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the APLO: Optimal Supply of Street Lights casestudy better are - – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, there is backlash against globalization, increasing commodity prices, there is increasing trade war between United States & China, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of APLO: Optimal Supply of Street Lights
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in APLO: Optimal Supply of Street Lights case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aplo Indonesia's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aplo Indonesia'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 APLO: Optimal Supply of Street Lights can be done for the following purposes –
1. Strategic planning using facts provided in APLO: Optimal Supply of Street Lights case study
2. Improving business portfolio management of Aplo Indonesia's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aplo Indonesia's
Strengths APLO: Optimal Supply of Street Lights | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aplo Indonesia's in APLO: Optimal Supply of Street Lights Harvard Business Review case study are -
Analytics focus
– Aplo Indonesia's 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 Singfat Chu, Nicole Lo, Clark Hsu, Masahiro Okumura 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.
High brand equity
– Aplo Indonesia's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aplo Indonesia's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Aplo Indonesia's is one of the leading recruiters in the industry. Managers in the APLO: Optimal Supply of Street Lights are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– APLO: Optimal Supply of Street Lights firm has clearly differentiated products in the market place. This has enabled Aplo Indonesia's to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Aplo Indonesia's to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Aplo Indonesia'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 APLO: Optimal Supply of Street Lights - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Aplo Indonesia's 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 APLO: Optimal Supply of Street Lights HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the APLO: Optimal Supply of Street Lights 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.
Low bargaining power of suppliers
– Suppliers of Aplo Indonesia's in the sector have low bargaining power. APLO: Optimal Supply of Street Lights has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aplo Indonesia's to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Aplo Indonesia's 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.
Learning organization
- Aplo Indonesia'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 Aplo Indonesia's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in APLO: Optimal Supply of Street Lights Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Aplo Indonesia'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 Aplo Indonesia's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Aplo Indonesia's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses APLO: Optimal Supply of Street Lights | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of APLO: Optimal Supply of Street Lights are -
High operating costs
– Compare to the competitors, firm in the HBR case study APLO: Optimal Supply of Street Lights 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 Aplo Indonesia'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 Aplo Indonesia's supply chain. Even after few cautionary changes mentioned in the HBR case study - APLO: Optimal Supply of Street Lights, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aplo Indonesia's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Aplo Indonesia'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 dependence on star products
– The top 2 products and services of the firm as mentioned in the APLO: Optimal Supply of Street Lights 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 Aplo Indonesia's has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aplo Indonesia's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study APLO: Optimal Supply of Street Lights can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Aplo Indonesia'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.
Increasing silos among functional specialists
– The organizational structure of Aplo Indonesia's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Aplo Indonesia's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aplo Indonesia's to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Aplo Indonesia'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.
Low market penetration in new markets
– Outside its home market of Aplo Indonesia's, firm in the HBR case study APLO: Optimal Supply of Street Lights needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Aplo Indonesia's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study APLO: Optimal Supply of Street Lights, in the dynamic environment Aplo Indonesia's has struggled to respond to the nimble upstart competition. Aplo Indonesia's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities APLO: Optimal Supply of Street Lights | 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 APLO: Optimal Supply of Street Lights are -
Developing new processes and practices
– Aplo Indonesia's can develop new processes and procedures in Leadership & Managing People 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 Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aplo Indonesia'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. Aplo Indonesia'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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aplo Indonesia's can use these opportunities to build new business models that can help the communities that Aplo Indonesia's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Aplo Indonesia'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.
Learning at scale
– Online learning technologies has now opened space for Aplo Indonesia'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.
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 Aplo Indonesia'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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aplo Indonesia's 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 Leadership & Managing People industry, but it has also influenced the consumer preferences. Aplo Indonesia's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Aplo Indonesia's can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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, Aplo Indonesia's is facing challenges because of the dominance of functional experts in the organization. APLO: Optimal Supply of Street Lights 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aplo Indonesia's 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 Aplo Indonesia's to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Aplo Indonesia's has opened avenues for new revenue streams for the organization in the industry. This can help Aplo Indonesia's to build a more holistic ecosystem as suggested in the APLO: Optimal Supply of Street Lights case study. Aplo Indonesia's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aplo Indonesia'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.
Threats APLO: Optimal Supply of Street Lights External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study APLO: Optimal Supply of Street Lights are -
Stagnating economy with rate increase
– Aplo Indonesia'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.
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 Aplo Indonesia's 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. Aplo Indonesia'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.
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 Aplo Indonesia's.
Technology acceleration in Forth Industrial Revolution
– Aplo Indonesia's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aplo Indonesia's needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Consumer confidence and its impact on Aplo Indonesia'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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aplo Indonesia's in the Leadership & Managing People industry. The Leadership & Managing People 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.
Shortening product life cycle
– it is one of the major threat that Aplo Indonesia's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
High dependence on third party suppliers
– Aplo Indonesia'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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study APLO: Optimal Supply of Street Lights, Aplo Indonesia'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 Leadership & Managing People .
Environmental challenges
– Aplo Indonesia'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. Aplo Indonesia's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Aplo Indonesia's in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of APLO: Optimal Supply of Street Lights 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 APLO: Optimal Supply of Street Lights 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 APLO: Optimal Supply of Street Lights 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 APLO: Optimal Supply of Street Lights 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 APLO: Optimal Supply of Street Lights 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 Aplo Indonesia's needs to make to build a sustainable competitive advantage.