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 – talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -

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.

Innovation driven organization

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

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.

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.

Strong track record of project management in the Crops industry

– PP London Sumatra is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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.

Cross disciplinary teams

– Horizontal connected teams at the PP London Sumatra 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.

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.

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.

Sustainable margins compare to other players in Crops industry

– PP London Sumatra has clearly differentiated products in the market place. This has enabled PP London Sumatra to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped PP London Sumatra to invest into research and development (R&D) and innovation.

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.

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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 -

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.

Increasing silos among functional specialists

– The organizational structure of PP London Sumatra is dominated by functional specialists. It is not different from other players in the Crops industry, but PP London Sumatra needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PP London Sumatra to focus more on services in the Crops industry rather than just following the product oriented approach.

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.

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.

Lack of clear differentiation of PP London Sumatra products

– To increase the profitability and margins on the products, PP London Sumatra needs to provide more differentiated products than what it is currently offering in the marketplace.

Skills based hiring in Crops industry

– The stress on hiring functional specialists at PP London Sumatra 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.

Employees’ less understanding of PP London Sumatra strategy

– From the outside it seems that the employees of PP London Sumatra don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Interest costs

– Compare to the competition, PP London Sumatra 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.

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.

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.

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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 -

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.

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.

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.

Better consumer reach

– The expansion of the 5G network will help PP London Sumatra to increase its market reach. PP London Sumatra 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.

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.

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.

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.

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.

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. PP London Sumatra can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Buying journey improvements

– PP London Sumatra 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.

Using analytics as competitive advantage

– PP London Sumatra 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 PP London Sumatra to build a competitive advantage using analytics. The analytics driven competitive advantage can help PP London Sumatra 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, 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.

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 -

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.

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.

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.

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.

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, PP London Sumatra may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of 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. PP London Sumatra 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.

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.

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 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.

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. PP London Sumatra can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 PP London Sumatra in the Crops sector and impact the bottomline of the organization.

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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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