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 – central banks are concerned over increasing inflation, geopolitical disruptions, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, cloud computing is disrupting traditional business models,
increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
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.
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.
High switching costs
– The high switching costs that Pabrik Kertas Tjiwi 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.
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.
Training and development
– Pabrik Kertas Tjiwi has one of the best training and development program in Basic Materials 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.
Ability to recruit top talent
– Pabrik Kertas Tjiwi is one of the leading players in the Paper & Paper Products 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 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.
Ability to lead change in Paper & Paper Products
– Pabrik Kertas Tjiwi is one of the leading players in the Paper & Paper Products industry in Indonesia. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in Indonesia but also across the existing markets. The ability to lead change has enabled Pabrik Kertas Tjiwi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 -
Need for greater diversity
– Pabrik Kertas Tjiwi 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.
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.
High bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in Indonesia, Pabrik Kertas Tjiwi is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Paper & Paper Products industry.
Slow to strategic competitive environment developments
– As Pabrik Kertas Tjiwi is one of the leading players in the Paper & Paper Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Paper & Paper Products industry in last five years.
Lack of clear differentiation of Pabrik Kertas Tjiwi products
– To increase the profitability and margins on the products, Pabrik Kertas Tjiwi needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Pabrik Kertas Tjiwi supply chain. Even after few cautionary changes, Pabrik Kertas Tjiwi is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pabrik Kertas Tjiwi vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Indonesia, Pabrik Kertas Tjiwi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Slow decision making process
– As mentioned earlier in the report, Pabrik Kertas Tjiwi has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Paper & Paper Products industry over the last five years. Pabrik Kertas Tjiwi 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.
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.
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 -
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.
Leveraging digital technologies
– Pabrik Kertas Tjiwi 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. Pabrik Kertas Tjiwi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Paper & Paper Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pabrik Kertas Tjiwi in the Paper & Paper Products industry. Now Pabrik Kertas Tjiwi can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Pabrik Kertas Tjiwi to increase its market reach. Pabrik Kertas Tjiwi 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.
Manufacturing automation
– Pabrik Kertas Tjiwi can use the latest technology developments to improve its manufacturing and designing process in Paper & Paper Products 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pabrik Kertas Tjiwi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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 -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Pabrik Kertas Tjiwi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Paper & Paper Products sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pabrik Kertas Tjiwi 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 Pabrik Kertas Tjiwi prominent markets.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pabrik Kertas Tjiwi in Paper & Paper Products industry. The Paper & Paper Products 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.
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 Pabrik Kertas Tjiwi in the Paper & Paper Products sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Pabrik Kertas Tjiwi needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
Regulatory challenges
– Pabrik Kertas Tjiwi 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 Paper & Paper Products industry regulations.
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.