PP London Sumatra (LSIP) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for PP London Sumatra (Indonesia)

Based on various researches at Oak Spring University , PP London Sumatra is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing household debt because of falling income levels, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of PP London Sumatra

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PP London Sumatra can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PP London Sumatra, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PP London Sumatra 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 PP London Sumatra can be done for the following purposes –
1. Strategic planning of PP London Sumatra
2. Improving business portfolio management of PP London Sumatra
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 PP London Sumatra

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Strengths of PP London Sumatra | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of PP London Sumatra are -

Superior customer experience

– The customer experience strategy of PP London Sumatra in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Highly skilled collaborators

– PP London Sumatra has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of PP London Sumatra have helped the firm to develop new products and bring them quickly to the marketplace.

Learning organization

- PP London Sumatra 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 PP London Sumatra is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PP London Sumatra emphasize – knowledge, initiative, and innovation.

Operational resilience

– The operational resilience strategy of PP London Sumatra 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.

High switching costs

– The high switching costs that PP London Sumatra 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.

Innovation driven organization

– PP London Sumatra is one of the most innovative firm in Crops sector.

Ability to lead change in Crops

– PP London Sumatra 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 PP London Sumatra in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High brand equity

– PP London Sumatra has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PP London Sumatra to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Organizational Resilience of PP London Sumatra

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

Ability to recruit top talent

– PP London Sumatra 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.

Low bargaining power of suppliers

– Suppliers of PP London Sumatra in the Consumer/Non-Cyclical sector have low bargaining power. PP London Sumatra has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PP London Sumatra to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– PP London Sumatra is present in almost all the verticals within the Crops industry. This has provided PP London Sumatra 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.

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Weaknesses of PP London Sumatra | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of PP London Sumatra are -

High cash cycle compare to competitors

PP London Sumatra 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.

Slow to strategic competitive environment developments

– As PP London Sumatra 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 decision making process

– As mentioned earlier in the report, PP London Sumatra 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. PP London Sumatra 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.

Products dominated business model

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

High bargaining power of channel partners in Crops industry

– because of the regulatory requirements in Indonesia, PP London Sumatra 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.

Need for greater diversity

– PP London Sumatra 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.

High operating costs

– Compare to the competitors, PP London Sumatra 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 PP London Sumatra lucrative customers.

No frontier risks strategy

– From the 10K / annual statement of PP London Sumatra, 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, PP London Sumatra is slow explore the new channels of communication. These new channels of communication can help PP London Sumatra to provide better information regarding Crops products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

– From the outside it seems that PP London Sumatra needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at PP London Sumatra can leverage the sales team experience to cultivate customer relationships as PP London Sumatra is planning to shift buying processes online.

Workers concerns about automation

– As automation is fast increasing in the Crops industry, PP London Sumatra needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

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PP London Sumatra Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of PP London Sumatra are -

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 PP London Sumatra in the Crops industry. Now PP London Sumatra can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

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

Developing new processes and practices

– PP London Sumatra 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.

Manufacturing automation

– PP London Sumatra 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, PP London Sumatra is facing challenges because of the dominance of functional experts in the organization. PP London Sumatra 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.

Creating value in data economy

– The success of analytics program of PP London Sumatra has opened avenues for new revenue streams for the organization in Crops industry. This can help PP London Sumatra to build a more holistic ecosystem for PP London Sumatra products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Reforming the budgeting process

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

Learning at scale

– Online learning technologies has now opened space for PP London Sumatra 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, PP London Sumatra 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.

Loyalty marketing

– PP London Sumatra 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

– PP London Sumatra 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, PP London Sumatra can use these opportunities to build new business models that can help the communities that PP London Sumatra operates in. Secondly it can use opportunities from government spending in Crops sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for PP London Sumatra in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.

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Threats PP London Sumatra External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of PP London Sumatra are -

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 PP London Sumatra.

Technology acceleration in Forth Industrial Revolution

– PP London Sumatra has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, PP London Sumatra 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.

Consumer confidence and its impact on PP London Sumatra 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 PP London Sumatra

– 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 PP London Sumatra.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents PP London Sumatra with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.

High dependence on third party suppliers

– PP London Sumatra 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.

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.

Environmental challenges

– PP London Sumatra 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. PP London Sumatra can take advantage of this fund but it will also bring new competitors in the Crops industry.

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.

Stagnating economy with rate increase

– PP London Sumatra 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.

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 PP London Sumatra business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, PP London Sumatra 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 PP London Sumatra prominent markets.

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. PP London Sumatra needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of PP London Sumatra Template, Example

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

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