SWOT Analysis / TOWS Matrix for Duta Pertiwi (Indonesia)
Based on various researches at Oak Spring University , Duta Pertiwi is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Duta Pertiwi can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Duta Pertiwi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Duta Pertiwi 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 Duta Pertiwi can be done for the following purposes –
1. Strategic planning of Duta Pertiwi
2. Improving business portfolio management of Duta Pertiwi
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Duta Pertiwi
Strengths of Duta Pertiwi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Duta Pertiwi are -
Analytics focus
– Duta Pertiwi 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 Construction Services 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.
Strong track record of project management in the Construction Services industry
– Duta Pertiwi is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Construction Services industry
– Duta Pertiwi has clearly differentiated products in the market place. This has enabled Duta Pertiwi to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Duta Pertiwi to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Duta Pertiwi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Duta Pertiwi 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.
Effective Research and Development (R&D)
– Duta Pertiwi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Duta Pertiwi staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Duta Pertiwi 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 Duta Pertiwi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Duta Pertiwi emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Duta Pertiwi in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Duta Pertiwi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Duta Pertiwi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Duta Pertiwi in the Capital Goods sector have low bargaining power. Duta Pertiwi has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Duta Pertiwi to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Duta Pertiwi is one of the most innovative firm in Construction Services sector.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Duta Pertiwi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Duta Pertiwi 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.
Operational resilience
– The operational resilience strategy of Duta Pertiwi comprises – understanding the underlying the factors in the Construction Services 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 Duta Pertiwi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Duta Pertiwi are -
High dependence on Duta Pertiwi ‘s star products
– The top 2 products and services of Duta Pertiwi still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Duta Pertiwi 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 Duta Pertiwi supply chain. Even after few cautionary changes, Duta Pertiwi is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Duta Pertiwi vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Duta Pertiwi 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Duta Pertiwi is slow explore the new channels of communication. These new channels of communication can help Duta Pertiwi to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Duta Pertiwi has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Duta Pertiwi should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Duta Pertiwi 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.
Low market penetration in new markets
– Outside its home market of Indonesia, Duta Pertiwi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Duta Pertiwi is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Duta Pertiwi has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Construction Services industry using digital technology.
Lack of clear differentiation of Duta Pertiwi products
– To increase the profitability and margins on the products, Duta Pertiwi needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Duta Pertiwi 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.
Duta Pertiwi Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Duta Pertiwi are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Duta Pertiwi 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 Duta Pertiwi to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Duta Pertiwi can improve the customer journey of consumers in the Construction Services 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Duta Pertiwi can use these opportunities to build new business models that can help the communities that Duta Pertiwi operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Loyalty marketing
– Duta Pertiwi 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.
Better consumer reach
– The expansion of the 5G network will help Duta Pertiwi to increase its market reach. Duta Pertiwi 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.
Using analytics as competitive advantage
– Duta Pertiwi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Duta Pertiwi to build a competitive advantage using analytics. The analytics driven competitive advantage can help Duta Pertiwi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Duta Pertiwi has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Duta Pertiwi to build a more holistic ecosystem for Duta Pertiwi products in the Construction Services 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 Duta Pertiwi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Duta Pertiwi 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 Duta Pertiwi to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Duta Pertiwi 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 Construction Services industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Duta Pertiwi 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.
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 Duta Pertiwi 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Duta Pertiwi is facing challenges because of the dominance of functional experts in the organization. Duta Pertiwi can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Duta Pertiwi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Duta Pertiwi are -
Shortening product life cycle
– it is one of the major threat that Duta Pertiwi is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Duta Pertiwi 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.
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 Duta Pertiwi business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Duta Pertiwi 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 Construction Services industry.
Regulatory challenges
– Duta Pertiwi 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 Construction Services industry regulations.
Increasing wage structure of Duta Pertiwi
– 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 Duta Pertiwi.
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 Duta Pertiwi.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Duta Pertiwi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services 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. Duta Pertiwi 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.
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. Duta Pertiwi needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Duta Pertiwi in Construction Services industry. The Construction Services 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Duta Pertiwi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Duta Pertiwi 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 Duta Pertiwi Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Duta Pertiwi 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 Duta Pertiwi 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 Duta Pertiwi 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 Duta Pertiwi 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 Duta Pertiwi needs to make to build a sustainable competitive advantage.