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 – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
High brand equity
– Sinar Mas Multiartha has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sinar Mas Multiartha to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Sinar Mas Multiartha 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 Sinar Mas Multiartha is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sinar Mas Multiartha emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Innovation driven organization
– Sinar Mas Multiartha is one of the most innovative firm in Insurance (Accident & Health) sector.
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.
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.
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.
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 -
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.
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.
Interest costs
– Compare to the competition, Sinar Mas Multiartha 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.
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.
Low market penetration in new markets
– Outside its home market of Indonesia, Sinar Mas Multiartha needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High cash cycle compare to competitors
Sinar Mas Multiartha has a high cash cycle compare to other players in the Insurance (Accident & Health) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Sinar Mas Multiartha 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 Insurance (Accident & Health) industry using digital technology.
Skills based hiring in Insurance (Accident & Health) industry
– The stress on hiring functional specialists at Sinar Mas Multiartha 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.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Accident & Health) industry, Sinar Mas Multiartha 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.
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.
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 -
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.
Creating value in data economy
– The success of analytics program of Sinar Mas Multiartha has opened avenues for new revenue streams for the organization in Insurance (Accident & Health) industry. This can help Sinar Mas Multiartha to build a more holistic ecosystem for Sinar Mas Multiartha products in the Insurance (Accident & Health) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Insurance (Accident & Health) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sinar Mas Multiartha 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. Sinar Mas Multiartha 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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sinar Mas Multiartha can use these opportunities to build new business models that can help the communities that Sinar Mas Multiartha operates in. Secondly it can use opportunities from government spending in Insurance (Accident & Health) sector.
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.
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. Sinar Mas Multiartha can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Building a culture of innovation
– managers at Sinar Mas Multiartha can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Insurance (Accident & Health) industry.
Using analytics as competitive advantage
– Sinar Mas Multiartha has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Accident & Health) sector. This continuous investment in analytics has enabled Sinar Mas Multiartha to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sinar Mas Multiartha to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Sinar Mas Multiartha can develop new processes and procedures in Insurance (Accident & Health) 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.
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 -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Accident & Health) industry are lowering. It can presents Sinar Mas Multiartha with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Accident & Health) sector.
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.
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
– Sinar Mas Multiartha 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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sinar Mas Multiartha 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 Sinar Mas Multiartha prominent markets.
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.
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.
Environmental challenges
– Sinar Mas Multiartha 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. Sinar Mas Multiartha can take advantage of this fund but it will also bring new competitors in the Insurance (Accident & Health) industry.
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.