Jamu dan Farmasi Sido (SIDO) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Jamu dan Farmasi Sido (Indonesia)

Based on various researches at Oak Spring University , Jamu dan Farmasi Sido is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices, etc

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Introduction to SWOT Analysis of Jamu dan Farmasi Sido

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jamu dan Farmasi Sido can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jamu dan Farmasi Sido, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jamu dan Farmasi Sido 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 Jamu dan Farmasi Sido can be done for the following purposes –
1. Strategic planning of Jamu dan Farmasi Sido
2. Improving business portfolio management of Jamu dan Farmasi Sido
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jamu dan Farmasi Sido

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Strengths of Jamu dan Farmasi Sido | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Jamu dan Farmasi Sido are -

Organizational Resilience of Jamu dan Farmasi Sido

– The covid-19 pandemic has put organizational resilience at the centre of everthing Jamu dan Farmasi Sido does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy of Jamu dan Farmasi Sido comprises – understanding the underlying the factors in the Biotechnology & Drugs industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

High switching costs

– The high switching costs that Jamu dan Farmasi Sido 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.

Ability to lead change in Biotechnology & Drugs

– Jamu dan Farmasi Sido is one of the leading players in the Biotechnology & Drugs industry in Indonesia. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in Indonesia but also across the existing markets. The ability to lead change has enabled Jamu dan Farmasi Sido in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Jamu dan Farmasi Sido 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 Biotechnology & Drugs 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.

Low bargaining power of suppliers

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

Innovation driven organization

– Jamu dan Farmasi Sido is one of the most innovative firm in Biotechnology & Drugs sector.

Learning organization

- Jamu dan Farmasi Sido 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 Jamu dan Farmasi Sido is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jamu dan Farmasi Sido emphasize – knowledge, initiative, and innovation.

Ability to recruit top talent

– Jamu dan Farmasi Sido is one of the leading players in the Biotechnology & Drugs 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.

Highly skilled collaborators

– Jamu dan Farmasi Sido has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Jamu dan Farmasi Sido have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Biotechnology & Drugs industry

– Jamu dan Farmasi Sido has clearly differentiated products in the market place. This has enabled Jamu dan Farmasi Sido to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Jamu dan Farmasi Sido to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Jamu dan Farmasi Sido has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jamu dan Farmasi Sido 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.

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Weaknesses of Jamu dan Farmasi Sido | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Jamu dan Farmasi Sido are -

Products dominated business model

– Even though Jamu dan Farmasi Sido has some of the most successful models in the Biotechnology & Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Jamu dan Farmasi Sido should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jamu dan Farmasi Sido is slow explore the new channels of communication. These new channels of communication can help Jamu dan Farmasi Sido to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.

Need for greater diversity

– Jamu dan Farmasi Sido 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.

Skills based hiring in Biotechnology & Drugs industry

– The stress on hiring functional specialists at Jamu dan Farmasi Sido has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative at Jamu dan Farmasi Sido, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Jamu dan Farmasi Sido has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Lack of clear differentiation of Jamu dan Farmasi Sido products

– To increase the profitability and margins on the products, Jamu dan Farmasi Sido needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As Jamu dan Farmasi Sido is one of the leading players in the Biotechnology & Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Biotechnology & Drugs industry in last five years.

Compensation and incentives

– The revenue per employee of Jamu dan Farmasi Sido is just above the Biotechnology & Drugs 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 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 Jamu dan Farmasi Sido supply chain. Even after few cautionary changes, Jamu dan Farmasi Sido is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jamu dan Farmasi Sido vulnerable to further global disruptions in South East Asia.

Slow decision making process

– As mentioned earlier in the report, Jamu dan Farmasi Sido has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. Jamu dan Farmasi Sido 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.

High bargaining power of channel partners in Biotechnology & Drugs industry

– because of the regulatory requirements in Indonesia, Jamu dan Farmasi Sido 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 Biotechnology & Drugs industry.

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Jamu dan Farmasi Sido Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Jamu dan Farmasi Sido are -

Using analytics as competitive advantage

– Jamu dan Farmasi Sido has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Jamu dan Farmasi Sido to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jamu dan Farmasi Sido to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. Jamu dan Farmasi Sido can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Jamu dan Farmasi Sido in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Jamu dan Farmasi Sido to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.

Learning at scale

– Online learning technologies has now opened space for Jamu dan Farmasi Sido 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.

Better consumer reach

– The expansion of the 5G network will help Jamu dan Farmasi Sido to increase its market reach. Jamu dan Farmasi Sido 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jamu dan Farmasi Sido can use these opportunities to build new business models that can help the communities that Jamu dan Farmasi Sido operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.

Manufacturing automation

– Jamu dan Farmasi Sido can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & Drugs 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jamu dan Farmasi Sido 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 Jamu dan Farmasi Sido to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Jamu dan Farmasi Sido can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Buying journey improvements

– Jamu dan Farmasi Sido can improve the customer journey of consumers in the Biotechnology & Drugs 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Jamu dan Farmasi Sido is facing challenges because of the dominance of functional experts in the organization. Jamu dan Farmasi Sido can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Harnessing reconfiguration of the global supply chains

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

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Threats Jamu dan Farmasi Sido External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Jamu dan Farmasi Sido are -

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. Jamu dan Farmasi Sido needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Jamu dan Farmasi Sido is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Jamu dan Farmasi Sido may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Jamu dan Farmasi Sido in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.

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 Jamu dan Farmasi Sido.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Jamu dan Farmasi Sido 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 Jamu dan Farmasi Sido prominent markets.

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 Jamu dan Farmasi Sido business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– Jamu dan Farmasi Sido 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 Biotechnology & Drugs 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. Jamu dan Farmasi Sido 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Jamu dan Farmasi Sido with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.

Technology acceleration in Forth Industrial Revolution

– Jamu dan Farmasi Sido has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Jamu dan Farmasi Sido needs to keep up with the evolution of technology in the Biotechnology & Drugs 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.

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.

Increasing wage structure of Jamu dan Farmasi Sido

– 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 Jamu dan Farmasi Sido.

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Weighted SWOT Analysis of Jamu dan Farmasi Sido Template, Example

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

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