Sinar Mas Multiartha (SMMA) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Accident & Health)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sinar Mas Multiartha (Indonesia)
Based on various researches at Oak Spring University , Sinar Mas Multiartha is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, talent flight as more people leaving formal jobs, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Sinar Mas Multiartha
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sinar Mas Multiartha can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sinar Mas Multiartha, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sinar Mas Multiartha 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 Sinar Mas Multiartha can be done for the following purposes –
1. Strategic planning of Sinar Mas Multiartha
2. Improving business portfolio management of Sinar Mas Multiartha
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Insurance (Accident & Health) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sinar Mas Multiartha
Strengths of Sinar Mas Multiartha | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sinar Mas Multiartha are -
Operational resilience
– The operational resilience strategy of Sinar Mas Multiartha comprises – understanding the underlying the factors in the Insurance (Accident & Health) 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.
Analytics focus
– Sinar Mas Multiartha 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 Insurance (Accident & Health) industry. The technology infrastructure of Indonesia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Insurance (Accident & Health) industry
– Sinar Mas Multiartha has clearly differentiated products in the market place. This has enabled Sinar Mas Multiartha to fetch slight price premium compare to the competitors in the Insurance (Accident & Health) industry. The sustainable margins have also helped Sinar Mas Multiartha to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Sinar Mas Multiartha in the Financial sector have low bargaining power. Sinar Mas Multiartha has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sinar Mas Multiartha to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Insurance (Accident & Health)
– Sinar Mas Multiartha is one of the leading players in the Insurance (Accident & Health) industry in Indonesia. Over the years it has not only transformed the business landscape in the Insurance (Accident & Health) industry in Indonesia but also across the existing markets. The ability to lead change has enabled Sinar Mas Multiartha 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 Sinar Mas Multiartha in Insurance (Accident & Health) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Sinar Mas Multiartha
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sinar Mas Multiartha does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Sinar Mas Multiartha is one of the leading players in the Insurance (Accident & Health) industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Sinar Mas Multiartha is one of the most innovative firm in Insurance (Accident & Health) sector.
Diverse revenue streams
– Sinar Mas Multiartha is present in almost all the verticals within the Insurance (Accident & Health) industry. This has provided Sinar Mas Multiartha 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.
Highly skilled collaborators
– Sinar Mas Multiartha has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Accident & Health) industry. Secondly the value chain collaborators of Sinar Mas Multiartha have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Insurance (Accident & Health) industry
- digital transformation varies from industry to industry. For Sinar Mas Multiartha digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sinar Mas Multiartha 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.
Weaknesses of Sinar Mas Multiartha | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sinar Mas Multiartha are -
Products dominated business model
– Even though Sinar Mas Multiartha has some of the most successful models in the Insurance (Accident & Health) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sinar Mas Multiartha should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Sinar Mas Multiartha is dominated by functional specialists. It is not different from other players in the Insurance (Accident & Health) industry, but Sinar Mas Multiartha needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sinar Mas Multiartha to focus more on services in the Insurance (Accident & Health) industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Sinar Mas Multiartha has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Insurance (Accident & Health) industry over the last five years. Sinar Mas Multiartha 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sinar Mas Multiartha is slow explore the new channels of communication. These new channels of communication can help Sinar Mas Multiartha to provide better information regarding Insurance (Accident & Health) products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Sinar Mas Multiartha needs to have more collaboration between its sales team and marketing team. Sales professionals in the Insurance (Accident & Health) industry have deep experience in developing customer relationships. Marketing department at Sinar Mas Multiartha can leverage the sales team experience to cultivate customer relationships as Sinar Mas Multiartha is planning to shift buying processes online.
Lack of clear differentiation of Sinar Mas Multiartha products
– To increase the profitability and margins on the products, Sinar Mas Multiartha needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Sinar Mas Multiartha supply chain. Even after few cautionary changes, Sinar Mas Multiartha is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sinar Mas Multiartha vulnerable to further global disruptions in South East Asia.
High dependence on Sinar Mas Multiartha ‘s star products
– The top 2 products and services of Sinar Mas Multiartha still accounts for major business revenue. This dependence on star products in Insurance (Accident & Health) industry has resulted into insufficient focus on developing new products, even though Sinar Mas Multiartha has relatively successful track record of launching new products.
Employees’ less understanding of Sinar Mas Multiartha strategy
– From the outside it seems that the employees of Sinar Mas Multiartha 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.
Compensation and incentives
– The revenue per employee of Sinar Mas Multiartha is just above the Insurance (Accident & Health) industry average. It 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.
Ability to respond to the competition
– As the decision making is very deliberative at Sinar Mas Multiartha, in the dynamic environment of Insurance (Accident & Health) industry it has struggled to respond to the nimble upstart competition. Sinar Mas Multiartha has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Sinar Mas Multiartha Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sinar Mas Multiartha 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 Sinar Mas Multiartha 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.
Better consumer reach
– The expansion of the 5G network will help Sinar Mas Multiartha to increase its market reach. Sinar Mas Multiartha 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.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Accident & Health) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sinar Mas Multiartha in the Insurance (Accident & Health) industry. Now Sinar Mas Multiartha can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sinar Mas Multiartha can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sinar Mas Multiartha is facing challenges because of the dominance of functional experts in the organization. Sinar Mas Multiartha can utilize new technology in the field of Insurance (Accident & Health) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sinar Mas Multiartha 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 Sinar Mas Multiartha to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Sinar Mas Multiartha 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sinar Mas Multiartha in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Accident & Health) industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Sinar Mas Multiartha 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.
Learning at scale
– Online learning technologies has now opened space for Sinar Mas Multiartha 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.
Manufacturing automation
– Sinar Mas Multiartha can use the latest technology developments to improve its manufacturing and designing process in Insurance (Accident & Health) sector. 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sinar Mas Multiartha 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.
Buying journey improvements
– Sinar Mas Multiartha can improve the customer journey of consumers in the Insurance (Accident & Health) industry by using analytics and artificial intelligence. It 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.
Threats Sinar Mas Multiartha External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sinar Mas Multiartha are -
Consumer confidence and its impact on Sinar Mas Multiartha 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 Insurance (Accident & Health) industry and other sectors.
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 Sinar Mas Multiartha.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sinar Mas Multiartha may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Insurance (Accident & Health) sector.
Shortening product life cycle
– it is one of the major threat that Sinar Mas Multiartha is facing in Insurance (Accident & Health) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Sinar Mas Multiartha needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Insurance (Accident & Health) industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sinar Mas Multiartha in Insurance (Accident & Health) industry. The Insurance (Accident & Health) 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.
Technology acceleration in Forth Industrial Revolution
– Sinar Mas Multiartha has witnessed rapid integration of technology during Covid-19 in the Insurance (Accident & Health) industry. As one of the leading players in the industry, Sinar Mas Multiartha needs to keep up with the evolution of technology in the Insurance (Accident & Health) 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.
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.
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 Sinar Mas Multiartha in the Insurance (Accident & Health) sector and impact the bottomline of the organization.
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. Sinar Mas Multiartha needs to understand the core reasons impacting the Insurance (Accident & Health) industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Insurance (Accident & Health) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sinar Mas Multiartha can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Sinar Mas Multiartha
– 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 Sinar Mas Multiartha.
Weighted SWOT Analysis of Sinar Mas Multiartha Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sinar Mas Multiartha 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 Sinar Mas Multiartha 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 Sinar Mas Multiartha 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 Sinar Mas Multiartha 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 Sinar Mas Multiartha needs to make to build a sustainable competitive advantage.