Sumber Alfaria Trijaya (AMRT) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sumber Alfaria Trijaya (Indonesia)

Based on various researches at Oak Spring University , Sumber Alfaria Trijaya is operating in a macro-environment that has been destablized by – 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, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Sumber Alfaria Trijaya

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sumber Alfaria Trijaya can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sumber Alfaria Trijaya, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sumber Alfaria Trijaya 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Sumber Alfaria Trijaya can be done for the following purposes –
1. Strategic planning of Sumber Alfaria Trijaya
2. Improving business portfolio management of Sumber Alfaria Trijaya
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sumber Alfaria Trijaya

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Strengths of Sumber Alfaria Trijaya | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sumber Alfaria Trijaya are -

Low bargaining power of suppliers

– Suppliers of Sumber Alfaria Trijaya in the Services sector have low bargaining power. Sumber Alfaria Trijaya has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sumber Alfaria Trijaya to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Retail (Grocery)

– Sumber Alfaria Trijaya is one of the leading players in the Retail (Grocery) industry in Indonesia. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in Indonesia but also across the existing markets. The ability to lead change has enabled Sumber Alfaria Trijaya in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

– Sumber Alfaria Trijaya has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Grocery) industry. Secondly the value chain collaborators of Sumber Alfaria Trijaya have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Sumber Alfaria Trijaya in Retail (Grocery) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Cross disciplinary teams

– Horizontal connected teams at the Sumber Alfaria Trijaya 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.

Effective Research and Development (R&D)

– Sumber Alfaria Trijaya has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sumber Alfaria Trijaya staying ahead in the Retail (Grocery) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Training and development

– Sumber Alfaria Trijaya has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

High brand equity

– Sumber Alfaria Trijaya has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sumber Alfaria Trijaya to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Analytics focus

– Sumber Alfaria Trijaya 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 Retail (Grocery) 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.

High switching costs

– The high switching costs that Sumber Alfaria Trijaya has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Strong track record of project management in the Retail (Grocery) industry

– Sumber Alfaria Trijaya is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sumber Alfaria Trijaya emphasize – knowledge, initiative, and innovation.

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Weaknesses of Sumber Alfaria Trijaya | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sumber Alfaria Trijaya are -

Increasing silos among functional specialists

– The organizational structure of Sumber Alfaria Trijaya is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Sumber Alfaria Trijaya needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sumber Alfaria Trijaya to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.

Interest costs

– Compare to the competition, Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya ‘s star products

– The top 2 products and services of Sumber Alfaria Trijaya still accounts for major business revenue. This dependence on star products in Retail (Grocery) industry has resulted into insufficient focus on developing new products, even though Sumber Alfaria Trijaya has relatively successful track record of launching new products.

No frontier risks strategy

– From the 10K / annual statement of Sumber Alfaria Trijaya, it seems that company is thinking out the frontier risks that can impact Retail (Grocery) industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Lack of clear differentiation of Sumber Alfaria Trijaya products

– To increase the profitability and margins on the products, Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya, in the dynamic environment of Retail (Grocery) industry it has struggled to respond to the nimble upstart competition. Sumber Alfaria Trijaya has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow to strategic competitive environment developments

– As Sumber Alfaria Trijaya is one of the leading players in the Retail (Grocery) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Grocery) industry in last five years.

High cash cycle compare to competitors

Sumber Alfaria Trijaya has a high cash cycle compare to other players in the Retail (Grocery) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Sumber Alfaria Trijaya has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Grocery) industry over the last five years. Sumber Alfaria Trijaya 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.

Compensation and incentives

– The revenue per employee of Sumber Alfaria Trijaya is just above the Retail (Grocery) 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.

Aligning sales with marketing

– From the outside it seems that Sumber Alfaria Trijaya needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Grocery) industry have deep experience in developing customer relationships. Marketing department at Sumber Alfaria Trijaya can leverage the sales team experience to cultivate customer relationships as Sumber Alfaria Trijaya is planning to shift buying processes online.

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Sumber Alfaria Trijaya Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sumber Alfaria Trijaya 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, Sumber Alfaria Trijaya can use these opportunities to build new business models that can help the communities that Sumber Alfaria Trijaya operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.

Using analytics as competitive advantage

– Sumber Alfaria Trijaya has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Grocery) sector. This continuous investment in analytics has enabled Sumber Alfaria Trijaya to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sumber Alfaria Trijaya to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Buying journey improvements

– Sumber Alfaria Trijaya can improve the customer journey of consumers in the Retail (Grocery) 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Sumber Alfaria Trijaya in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Grocery) industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Sumber Alfaria Trijaya has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Sumber Alfaria Trijaya to build a more holistic ecosystem for Sumber Alfaria Trijaya products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Learning at scale

– Online learning technologies has now opened space for Sumber Alfaria Trijaya 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.

Leveraging digital technologies

– Sumber Alfaria Trijaya can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Manufacturing automation

– Sumber Alfaria Trijaya can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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.

Better consumer reach

– The expansion of the 5G network will help Sumber Alfaria Trijaya to increase its market reach. Sumber Alfaria Trijaya 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.

Building a culture of innovation

– managers at Sumber Alfaria Trijaya 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 Retail (Grocery) industry.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Sumber Alfaria Trijaya is facing challenges because of the dominance of functional experts in the organization. Sumber Alfaria Trijaya can utilize new technology in the field of Retail (Grocery) industry 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 Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya to hire the very best people irrespective of their geographical location.

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Threats Sumber Alfaria Trijaya External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sumber Alfaria Trijaya are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sumber Alfaria Trijaya in Retail (Grocery) industry. The Retail (Grocery) 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 dependence on third party suppliers

– Sumber Alfaria Trijaya 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.

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 Sumber Alfaria Trijaya business can come under increasing regulations regarding data privacy, data security, etc.

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 Sumber Alfaria Trijaya in the Retail (Grocery) sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Sumber Alfaria Trijaya is facing in Retail (Grocery) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Easy access to finance

– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sumber Alfaria Trijaya can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Grocery) industry are lowering. It can presents Sumber Alfaria Trijaya with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Grocery) sector.

Increasing wage structure of Sumber Alfaria Trijaya

– 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 Sumber Alfaria Trijaya.

Technology acceleration in Forth Industrial Revolution

– Sumber Alfaria Trijaya has witnessed rapid integration of technology during Covid-19 in the Retail (Grocery) industry. As one of the leading players in the industry, Sumber Alfaria Trijaya needs to keep up with the evolution of technology in the Retail (Grocery) 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.

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 Sumber Alfaria Trijaya.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Sumber Alfaria Trijaya may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Grocery) sector.

Stagnating economy with rate increase

– Sumber Alfaria Trijaya 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 Retail (Grocery) industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya prominent markets.

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Weighted SWOT Analysis of Sumber Alfaria Trijaya Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya 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 Sumber Alfaria Trijaya needs to make to build a sustainable competitive advantage.

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