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 – increasing transportation and logistics costs, there is increasing trade war between United States & China, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , 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 -
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.
Strong track record of project management in the Crops industry
– Sawit Sumbermas Sarana is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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 brand equity
– Sawit Sumbermas Sarana has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sawit Sumbermas Sarana to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Sawit Sumbermas Sarana 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.
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.
Diverse revenue streams
– Sawit Sumbermas Sarana is present in almost all the verticals within the Crops industry. This has provided Sawit Sumbermas Sarana a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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 -
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.
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.
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.
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.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Indonesia, Sawit Sumbermas Sarana 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 Crops industry.
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.
Slow decision making process
– As mentioned earlier in the report, Sawit Sumbermas Sarana has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Crops industry over the last five years. Sawit Sumbermas Sarana 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.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at Sawit Sumbermas Sarana 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.
High cash cycle compare to competitors
Sawit Sumbermas Sarana has a high cash cycle compare to other players in the Crops industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sawit Sumbermas Sarana 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 Sawit Sumbermas Sarana to hire the very best people irrespective of their geographical location.
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.
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.
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.
Developing new processes and practices
– Sawit Sumbermas Sarana can develop new processes and procedures in Crops 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.
Loyalty marketing
– Sawit Sumbermas Sarana 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sawit Sumbermas Sarana can use these opportunities to build new business models that can help the communities that Sawit Sumbermas Sarana operates in. Secondly it can use opportunities from government spending in Crops sector.
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.
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. Sawit Sumbermas Sarana can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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 -
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.
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.
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.
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.
Regulatory challenges
– Sawit Sumbermas Sarana 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 Crops industry regulations.
Technology acceleration in Forth Industrial Revolution
– Sawit Sumbermas Sarana has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, Sawit Sumbermas Sarana needs to keep up with the evolution of technology in the Crops 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.
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.
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.
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.
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.
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.
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 Sawit Sumbermas Sarana.
Environmental challenges
– Sawit Sumbermas Sarana 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. Sawit Sumbermas Sarana can take advantage of this fund but it will also bring new competitors in the Crops industry.
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.
