SWOT Analysis / TOWS Matrix for Pabrik Kertas Tjiwi (Indonesia)
Based on various researches at Oak Spring University , Pabrik Kertas Tjiwi is operating in a macro-environment that has been destablized by – technology disruption, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Pabrik Kertas Tjiwi
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pabrik Kertas Tjiwi can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pabrik Kertas Tjiwi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi can be done for the following purposes –
1. Strategic planning of Pabrik Kertas Tjiwi
2. Improving business portfolio management of Pabrik Kertas Tjiwi
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pabrik Kertas Tjiwi
Strengths of Pabrik Kertas Tjiwi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pabrik Kertas Tjiwi are -
Low bargaining power of suppliers
– Suppliers of Pabrik Kertas Tjiwi in the Basic Materials sector have low bargaining power. Pabrik Kertas Tjiwi has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pabrik Kertas Tjiwi to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Pabrik Kertas Tjiwi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pabrik Kertas Tjiwi has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Pabrik Kertas Tjiwi
– The covid-19 pandemic has put organizational resilience at the centre of everthing Pabrik Kertas Tjiwi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Pabrik Kertas Tjiwi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Pabrik Kertas Tjiwi staying ahead in the Paper & Paper Products 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 Pabrik Kertas Tjiwi 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.
Analytics focus
– Pabrik Kertas Tjiwi 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 Paper & Paper Products 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 brand equity
– Pabrik Kertas Tjiwi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pabrik Kertas Tjiwi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Paper & Paper Products industry
– Pabrik Kertas Tjiwi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Pabrik Kertas Tjiwi is one of the most innovative firm in Paper & Paper Products sector.
Sustainable margins compare to other players in Paper & Paper Products industry
– Pabrik Kertas Tjiwi has clearly differentiated products in the market place. This has enabled Pabrik Kertas Tjiwi to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Pabrik Kertas Tjiwi to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Pabrik Kertas Tjiwi in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pabrik Kertas Tjiwi emphasize – knowledge, initiative, and innovation.
Weaknesses of Pabrik Kertas Tjiwi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pabrik Kertas Tjiwi are -
Products dominated business model
– Even though Pabrik Kertas Tjiwi has some of the most successful models in the Paper & Paper Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Pabrik Kertas Tjiwi should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Pabrik Kertas Tjiwi 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 Paper & Paper Products industry using digital technology.
Interest costs
– Compare to the competition, Pabrik Kertas Tjiwi 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 cash cycle compare to competitors
Pabrik Kertas Tjiwi has a high cash cycle compare to other players in the Paper & Paper Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Pabrik Kertas Tjiwi needs to have more collaboration between its sales team and marketing team. Sales professionals in the Paper & Paper Products industry have deep experience in developing customer relationships. Marketing department at Pabrik Kertas Tjiwi can leverage the sales team experience to cultivate customer relationships as Pabrik Kertas Tjiwi is planning to shift buying processes online.
Employees’ less understanding of Pabrik Kertas Tjiwi strategy
– From the outside it seems that the employees of Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Pabrik Kertas Tjiwi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pabrik Kertas Tjiwi to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
High dependence on Pabrik Kertas Tjiwi ‘s star products
– The top 2 products and services of Pabrik Kertas Tjiwi still accounts for major business revenue. This dependence on star products in Paper & Paper Products industry has resulted into insufficient focus on developing new products, even though Pabrik Kertas Tjiwi has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Pabrik Kertas Tjiwi, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Pabrik Kertas Tjiwi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pabrik Kertas Tjiwi is slow explore the new channels of communication. These new channels of communication can help Pabrik Kertas Tjiwi to provide better information regarding Paper & Paper Products 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 Pabrik Kertas Tjiwi is just above the Paper & Paper Products 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.
Pabrik Kertas Tjiwi Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pabrik Kertas Tjiwi are -
Developing new processes and practices
– Pabrik Kertas Tjiwi can develop new processes and procedures in Paper & Paper Products 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.
Building a culture of innovation
– managers at Pabrik Kertas Tjiwi 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 Paper & Paper Products industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pabrik Kertas Tjiwi 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
– Pabrik Kertas Tjiwi can improve the customer journey of consumers in the Paper & Paper Products 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.
Learning at scale
– Online learning technologies has now opened space for Pabrik Kertas Tjiwi 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pabrik Kertas Tjiwi 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. Pabrik Kertas Tjiwi 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.
Loyalty marketing
– Pabrik Kertas Tjiwi 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pabrik Kertas Tjiwi is facing challenges because of the dominance of functional experts in the organization. Pabrik Kertas Tjiwi can utilize new technology in the field of Paper & Paper Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pabrik Kertas Tjiwi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Paper & Paper Products industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pabrik Kertas Tjiwi can use these opportunities to build new business models that can help the communities that Pabrik Kertas Tjiwi operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Using analytics as competitive advantage
– Pabrik Kertas Tjiwi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Paper & Paper Products sector. This continuous investment in analytics has enabled Pabrik Kertas Tjiwi to build a competitive advantage using analytics. The analytics driven competitive advantage can help Pabrik Kertas Tjiwi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Pabrik Kertas Tjiwi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pabrik Kertas Tjiwi are -
Environmental challenges
– Pabrik Kertas Tjiwi 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. Pabrik Kertas Tjiwi can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
Consumer confidence and its impact on Pabrik Kertas Tjiwi 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 Paper & Paper Products industry and other sectors.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Pabrik Kertas Tjiwi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Paper & Paper Products sector.
Increasing wage structure of Pabrik Kertas Tjiwi
– 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 Pabrik Kertas Tjiwi.
Easy access to finance
– Easy access to finance in Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pabrik Kertas Tjiwi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Pabrik Kertas Tjiwi has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Pabrik Kertas Tjiwi needs to keep up with the evolution of technology in the Paper & Paper Products 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.
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 Pabrik Kertas Tjiwi business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Pabrik Kertas Tjiwi 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 Paper & Paper Products industry.
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. Pabrik Kertas Tjiwi 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.
High dependence on third party suppliers
– Pabrik Kertas Tjiwi 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.
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.
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 Pabrik Kertas Tjiwi.
Weighted SWOT Analysis of Pabrik Kertas Tjiwi Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi needs to make to build a sustainable competitive advantage.