SWOT Analysis / TOWS Matrix for Sawit Sumbermas Sarana (Indonesia)
Based on various researches at Oak Spring University , Sawit Sumbermas Sarana is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
technology disruption, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Sawit Sumbermas Sarana
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sawit Sumbermas Sarana can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sawit Sumbermas Sarana, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana can be done for the following purposes –
1. Strategic planning of Sawit Sumbermas Sarana
2. Improving business portfolio management of Sawit Sumbermas Sarana
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sawit Sumbermas Sarana
Strengths of Sawit Sumbermas Sarana | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sawit Sumbermas Sarana are -
Low bargaining power of suppliers
– Suppliers of Sawit Sumbermas Sarana in the Consumer/Non-Cyclical sector have low bargaining power. Sawit Sumbermas Sarana has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sawit Sumbermas Sarana to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Sawit Sumbermas Sarana has one of the best training and development program in Consumer/Non-Cyclical 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
– Sawit Sumbermas Sarana is one of the leading players in the Crops 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.
Learning organization
- Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sawit Sumbermas Sarana emphasize – knowledge, initiative, and innovation.
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For Sawit Sumbermas Sarana digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sawit Sumbermas Sarana has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Crops
– Sawit Sumbermas Sarana is one of the leading players in the Crops industry in Indonesia. Over the years it has not only transformed the business landscape in the Crops industry in Indonesia but also across the existing markets. The ability to lead change has enabled Sawit Sumbermas Sarana in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Sawit Sumbermas Sarana 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.
Effective Research and Development (R&D)
– Sawit Sumbermas Sarana has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sawit Sumbermas Sarana staying ahead in the Crops industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Sawit Sumbermas Sarana
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana comprises – understanding the underlying the factors in the Crops 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.
Analytics focus
– Sawit Sumbermas Sarana 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 Crops 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.
Superior customer experience
– The customer experience strategy of Sawit Sumbermas Sarana in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Sawit Sumbermas Sarana | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sawit Sumbermas Sarana are -
Increasing silos among functional specialists
– The organizational structure of Sawit Sumbermas Sarana is dominated by functional specialists. It is not different from other players in the Crops industry, but Sawit Sumbermas Sarana needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sawit Sumbermas Sarana to focus more on services in the Crops industry rather than just following the product oriented approach.
Need for greater diversity
– Sawit Sumbermas Sarana 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.
No frontier risks strategy
– From the 10K / annual statement of Sawit Sumbermas Sarana, it seems that company is thinking out the frontier risks that can impact Crops 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.
Ability to respond to the competition
– As the decision making is very deliberative at Sawit Sumbermas Sarana, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Sawit Sumbermas Sarana has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Sawit Sumbermas Sarana has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sawit Sumbermas Sarana lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sawit Sumbermas Sarana is slow explore the new channels of communication. These new channels of communication can help Sawit Sumbermas Sarana to provide better information regarding Crops products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Sawit Sumbermas Sarana is one of the leading players in the Crops industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Crops industry in last five years.
High dependence on Sawit Sumbermas Sarana ‘s star products
– The top 2 products and services of Sawit Sumbermas Sarana still accounts for major business revenue. This dependence on star products in Crops industry has resulted into insufficient focus on developing new products, even though Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana supply chain. Even after few cautionary changes, Sawit Sumbermas Sarana is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sawit Sumbermas Sarana vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Indonesia, Sawit Sumbermas Sarana needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Sawit Sumbermas Sarana 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.
Sawit Sumbermas Sarana Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sawit Sumbermas Sarana are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sawit Sumbermas Sarana 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. Sawit Sumbermas Sarana 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.
Using analytics as competitive advantage
– Sawit Sumbermas Sarana has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled Sawit Sumbermas Sarana to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sawit Sumbermas Sarana to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sawit Sumbermas Sarana 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. Sawit Sumbermas Sarana can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sawit Sumbermas Sarana can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Sawit Sumbermas Sarana can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
Creating value in data economy
– The success of analytics program of Sawit Sumbermas Sarana has opened avenues for new revenue streams for the organization in Crops industry. This can help Sawit Sumbermas Sarana to build a more holistic ecosystem for Sawit Sumbermas Sarana products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Sawit Sumbermas Sarana can improve the customer journey of consumers in the Crops 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, Sawit Sumbermas Sarana is facing challenges because of the dominance of functional experts in the organization. Sawit Sumbermas Sarana can utilize new technology in the field of Crops industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Sawit Sumbermas Sarana 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.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sawit Sumbermas Sarana in the Crops industry. Now Sawit Sumbermas Sarana can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Sawit Sumbermas Sarana 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.
Building a culture of innovation
– managers at Sawit Sumbermas Sarana 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 Crops industry.
Threats Sawit Sumbermas Sarana External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sawit Sumbermas Sarana are -
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 Sawit Sumbermas Sarana in the Crops sector and impact the bottomline of the organization.
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. Sawit Sumbermas Sarana 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 Crops industry are lowering. It can presents Sawit Sumbermas Sarana with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana prominent markets.
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.
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. Sawit Sumbermas Sarana needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Sawit Sumbermas Sarana 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 Crops industry.
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.
Consumer confidence and its impact on Sawit Sumbermas Sarana 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 Crops industry and other sectors.
High dependence on third party suppliers
– Sawit Sumbermas Sarana 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.
Shortening product life cycle
– it is one of the major threat that Sawit Sumbermas Sarana is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Sawit Sumbermas Sarana
– 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 Sawit Sumbermas Sarana.
Easy access to finance
– Easy access to finance in Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sawit Sumbermas Sarana can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Sawit Sumbermas Sarana Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana needs to make to build a sustainable competitive advantage.