Perusahaan Gas Negara (PGAS) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Perusahaan Gas Negara (Indonesia)
Based on various researches at Oak Spring University , Perusahaan Gas Negara is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, technology disruption, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Perusahaan Gas Negara
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Perusahaan Gas Negara can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Perusahaan Gas Negara, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Perusahaan Gas Negara 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 Perusahaan Gas Negara can be done for the following purposes –
1. Strategic planning of Perusahaan Gas Negara
2. Improving business portfolio management of Perusahaan Gas Negara
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Natural Gas Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Perusahaan Gas Negara
Strengths of Perusahaan Gas Negara | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Perusahaan Gas Negara are -
Diverse revenue streams
– Perusahaan Gas Negara is present in almost all the verticals within the Natural Gas Utilities industry. This has provided Perusahaan Gas Negara 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.
Analytics focus
– Perusahaan Gas Negara 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 Natural Gas Utilities 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.
Effective Research and Development (R&D)
– Perusahaan Gas Negara has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Perusahaan Gas Negara staying ahead in the Natural Gas Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Perusahaan Gas Negara 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.
Sustainable margins compare to other players in Natural Gas Utilities industry
– Perusahaan Gas Negara has clearly differentiated products in the market place. This has enabled Perusahaan Gas Negara to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Perusahaan Gas Negara to invest into research and development (R&D) and innovation.
High brand equity
– Perusahaan Gas Negara has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Perusahaan Gas Negara to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Natural Gas Utilities
– Perusahaan Gas Negara is one of the leading players in the Natural Gas Utilities industry in Indonesia. Over the years it has not only transformed the business landscape in the Natural Gas Utilities industry in Indonesia but also across the existing markets. The ability to lead change has enabled Perusahaan Gas Negara in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Perusahaan Gas Negara has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Natural Gas Utilities industry. Secondly the value chain collaborators of Perusahaan Gas Negara have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Perusahaan Gas Negara 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 Perusahaan Gas Negara is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Perusahaan Gas Negara emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Perusahaan Gas Negara in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Natural Gas Utilities industry
– Perusahaan Gas Negara is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Perusahaan Gas Negara
– The covid-19 pandemic has put organizational resilience at the centre of everthing Perusahaan Gas Negara does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Perusahaan Gas Negara | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Perusahaan Gas Negara are -
Lack of clear differentiation of Perusahaan Gas Negara products
– To increase the profitability and margins on the products, Perusahaan Gas Negara 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 Perusahaan Gas Negara, in the dynamic environment of Natural Gas Utilities industry it has struggled to respond to the nimble upstart competition. Perusahaan Gas Negara has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Perusahaan Gas Negara has some of the most successful models in the Natural Gas Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Perusahaan Gas Negara should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Perusahaan Gas Negara needs to have more collaboration between its sales team and marketing team. Sales professionals in the Natural Gas Utilities industry have deep experience in developing customer relationships. Marketing department at Perusahaan Gas Negara can leverage the sales team experience to cultivate customer relationships as Perusahaan Gas Negara is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Perusahaan Gas Negara is slow explore the new channels of communication. These new channels of communication can help Perusahaan Gas Negara to provide better information regarding Natural Gas Utilities products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Perusahaan Gas Negara is just above the Natural Gas Utilities 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.
High operating costs
– Compare to the competitors, Perusahaan Gas Negara has high operating costs in the Natural Gas Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Perusahaan Gas Negara lucrative customers.
Employees’ less understanding of Perusahaan Gas Negara strategy
– From the outside it seems that the employees of Perusahaan Gas Negara 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.
Increasing silos among functional specialists
– The organizational structure of Perusahaan Gas Negara is dominated by functional specialists. It is not different from other players in the Natural Gas Utilities industry, but Perusahaan Gas Negara needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Perusahaan Gas Negara to focus more on services in the Natural Gas Utilities industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Perusahaan Gas Negara has a high cash cycle compare to other players in the Natural Gas Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Perusahaan Gas Negara has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Perusahaan Gas Negara Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Perusahaan Gas Negara are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Perusahaan Gas Negara can use these opportunities to build new business models that can help the communities that Perusahaan Gas Negara operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Perusahaan Gas Negara 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.
Use of Bitcoin and other crypto currencies for transactions in Natural Gas Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Perusahaan Gas Negara in the Natural Gas Utilities industry. Now Perusahaan Gas Negara can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Natural Gas Utilities industry, but it has also influenced the consumer preferences. Perusahaan Gas Negara can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Perusahaan Gas Negara can improve the customer journey of consumers in the Natural Gas Utilities 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.
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. Perusahaan Gas Negara can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Perusahaan Gas Negara is facing challenges because of the dominance of functional experts in the organization. Perusahaan Gas Negara can utilize new technology in the field of Natural Gas Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Perusahaan Gas Negara 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Perusahaan Gas Negara 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 Perusahaan Gas Negara to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Perusahaan Gas Negara 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 Perusahaan Gas Negara to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Perusahaan Gas Negara 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Perusahaan Gas Negara in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Natural Gas Utilities industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Perusahaan Gas Negara can develop new processes and procedures in Natural Gas Utilities 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 Perusahaan Gas Negara External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Perusahaan Gas Negara are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Perusahaan Gas Negara 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 Perusahaan Gas Negara prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Perusahaan Gas Negara in Natural Gas Utilities industry. The Natural Gas Utilities 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.
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. Perusahaan Gas Negara needs to understand the core reasons impacting the Natural Gas Utilities industry. This will help it in building a better workplace.
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 Perusahaan Gas Negara in the Natural Gas Utilities sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Perusahaan Gas Negara 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.
Stagnating economy with rate increase
– Perusahaan Gas Negara 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 Natural Gas Utilities industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Perusahaan Gas Negara may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Natural Gas Utilities sector.
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 Perusahaan Gas Negara.
Shortening product life cycle
– it is one of the major threat that Perusahaan Gas Negara is facing in Natural Gas Utilities 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 Natural Gas Utilities industry are lowering. It can presents Perusahaan Gas Negara with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Natural Gas Utilities sector.
Environmental challenges
– Perusahaan Gas Negara 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. Perusahaan Gas Negara can take advantage of this fund but it will also bring new competitors in the Natural Gas Utilities industry.
Technology acceleration in Forth Industrial Revolution
– Perusahaan Gas Negara has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, Perusahaan Gas Negara needs to keep up with the evolution of technology in the Natural Gas Utilities 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.
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. Perusahaan Gas Negara 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.
Weighted SWOT Analysis of Perusahaan Gas Negara Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Perusahaan Gas Negara 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 Perusahaan Gas Negara 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 Perusahaan Gas Negara 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 Perusahaan Gas Negara 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 Perusahaan Gas Negara needs to make to build a sustainable competitive advantage.