Based on various researches at Oak Spring University , Puradelta Lestari Tbk Pt is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing household debt because of falling income levels, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing commodity prices,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Puradelta Lestari Tbk Pt
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Puradelta Lestari Tbk Pt can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Puradelta Lestari Tbk Pt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt can be done for the following purposes –
1. Strategic planning of Puradelta Lestari Tbk Pt
2. Improving business portfolio management of Puradelta Lestari Tbk Pt
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 Puradelta Lestari Tbk Pt
Strengths of Puradelta Lestari Tbk Pt | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Puradelta Lestari Tbk Pt are -
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Puradelta Lestari Tbk Pt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Puradelta Lestari Tbk Pt 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.
Organizational Resilience of Puradelta Lestari Tbk Pt
– The covid-19 pandemic has put organizational resilience at the centre of everthing Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt 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.
Learning organization
- Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Puradelta Lestari Tbk Pt emphasize – knowledge, initiative, and innovation.
High brand equity
– Puradelta Lestari Tbk Pt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Puradelta Lestari Tbk Pt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Construction Services
– Puradelta Lestari Tbk Pt is one of the leading players in the Construction Services industry in Indonesia. Over the years it has not only transformed the business landscape in the Construction Services industry in Indonesia but also across the existing markets. The ability to lead change has enabled Puradelta Lestari Tbk Pt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Puradelta Lestari Tbk Pt is one of the leading players in the Construction Services 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.
Analytics focus
– Puradelta Lestari Tbk Pt 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.
Sustainable margins compare to other players in Construction Services industry
– Puradelta Lestari Tbk Pt has clearly differentiated products in the market place. This has enabled Puradelta Lestari Tbk Pt to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Puradelta Lestari Tbk Pt to invest into research and development (R&D) and innovation.
Innovation driven organization
– Puradelta Lestari Tbk Pt is one of the most innovative firm in Construction Services sector.
Low bargaining power of suppliers
– Suppliers of Puradelta Lestari Tbk Pt in the Capital Goods sector have low bargaining power. Puradelta Lestari Tbk Pt has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Puradelta Lestari Tbk Pt to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Puradelta Lestari Tbk Pt has one of the best training and development program in Capital Goods 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.
Weaknesses of Puradelta Lestari Tbk Pt | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Puradelta Lestari Tbk Pt are -
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in Indonesia, Puradelta Lestari Tbk Pt 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 Construction Services industry.
Low market penetration in new markets
– Outside its home market of Indonesia, Puradelta Lestari Tbk Pt needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Puradelta Lestari Tbk Pt 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Puradelta Lestari Tbk Pt is slow explore the new channels of communication. These new channels of communication can help Puradelta Lestari Tbk Pt to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Puradelta Lestari Tbk Pt has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Puradelta Lestari Tbk Pt lucrative customers.
Products dominated business model
– Even though Puradelta Lestari Tbk Pt 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. Puradelta Lestari Tbk Pt should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Puradelta Lestari Tbk Pt, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Puradelta Lestari Tbk Pt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Puradelta Lestari Tbk Pt 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.
Increasing silos among functional specialists
– The organizational structure of Puradelta Lestari Tbk Pt is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Puradelta Lestari Tbk Pt needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Puradelta Lestari Tbk Pt to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Puradelta Lestari Tbk Pt needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Puradelta Lestari Tbk Pt can leverage the sales team experience to cultivate customer relationships as Puradelta Lestari Tbk Pt is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Puradelta Lestari Tbk Pt 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.
Puradelta Lestari Tbk Pt Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Puradelta Lestari Tbk Pt are -
Leveraging digital technologies
– Puradelta Lestari Tbk Pt 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.
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. Puradelta Lestari Tbk Pt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Puradelta Lestari Tbk Pt can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Better consumer reach
– The expansion of the 5G network will help Puradelta Lestari Tbk Pt to increase its market reach. Puradelta Lestari Tbk Pt 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.
Building a culture of innovation
– managers at Puradelta Lestari Tbk Pt 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Puradelta Lestari Tbk Pt 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.
Developing new processes and practices
– Puradelta Lestari Tbk Pt can develop new processes and procedures in Construction Services 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Puradelta Lestari Tbk Pt 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. Puradelta Lestari Tbk Pt 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.
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Puradelta Lestari Tbk Pt in the Construction Services industry. Now Puradelta Lestari Tbk Pt can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Puradelta Lestari Tbk Pt 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Puradelta Lestari Tbk Pt can use these opportunities to build new business models that can help the communities that Puradelta Lestari Tbk Pt operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Puradelta Lestari Tbk Pt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Puradelta Lestari Tbk Pt External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Puradelta Lestari Tbk Pt are -
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. Puradelta Lestari Tbk Pt needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Puradelta Lestari Tbk Pt has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Puradelta Lestari Tbk Pt needs to keep up with the evolution of technology in the Construction Services 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.
Stagnating economy with rate increase
– Puradelta Lestari Tbk Pt 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.
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. Puradelta Lestari Tbk Pt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt prominent markets.
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 Puradelta Lestari Tbk Pt in the Construction Services sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Puradelta Lestari Tbk Pt 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Puradelta Lestari Tbk Pt 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. Puradelta Lestari Tbk Pt 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.
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.
High dependence on third party suppliers
– Puradelta Lestari Tbk Pt 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.
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.
Shortening product life cycle
– it is one of the major threat that Puradelta Lestari Tbk Pt is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Puradelta Lestari Tbk Pt Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt 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 Puradelta Lestari Tbk Pt needs to make to build a sustainable competitive advantage.