Indonesian Paradise (INPP) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Indonesian Paradise (Indonesia)

Based on various researches at Oak Spring University , Indonesian Paradise is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, geopolitical disruptions, increasing energy prices, increasing household debt because of falling income levels, increasing commodity prices, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, etc

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Introduction to SWOT Analysis of Indonesian Paradise

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Indonesian Paradise can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Indonesian Paradise, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Indonesian Paradise 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 Indonesian Paradise can be done for the following purposes –
1. Strategic planning of Indonesian Paradise
2. Improving business portfolio management of Indonesian Paradise
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Indonesian Paradise

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Strengths of Indonesian Paradise | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Indonesian Paradise are -

Effective Research and Development (R&D)

– Indonesian Paradise has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Indonesian Paradise staying ahead in the Hotels & Motels industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Highly skilled collaborators

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

Organizational Resilience of Indonesian Paradise

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

High switching costs

– The high switching costs that Indonesian Paradise 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 Hotels & Motels industry

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

Successful track record of launching new products

– Indonesian Paradise has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Indonesian Paradise 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.

High brand equity

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

Ability to recruit top talent

– Indonesian Paradise is one of the leading players in the Hotels & Motels 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.

Learning organization

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

Ability to lead change in Hotels & Motels

– Indonesian Paradise is one of the leading players in the Hotels & Motels industry in Indonesia. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in Indonesia but also across the existing markets. The ability to lead change has enabled Indonesian Paradise in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Innovation driven organization

– Indonesian Paradise is one of the most innovative firm in Hotels & Motels sector.

Sustainable margins compare to other players in Hotels & Motels industry

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

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Weaknesses of Indonesian Paradise | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Indonesian Paradise are -

Lack of clear differentiation of Indonesian Paradise products

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

Compensation and incentives

– The revenue per employee of Indonesian Paradise is just above the Hotels & Motels industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Skills based hiring in Hotels & Motels industry

– The stress on hiring functional specialists at Indonesian Paradise 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.

Aligning sales with marketing

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

Employees’ less understanding of Indonesian Paradise strategy

– From the outside it seems that the employees of Indonesian Paradise 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.

Low market penetration in new markets

– Outside its home market of Indonesia, Indonesian Paradise needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High operating costs

– Compare to the competitors, Indonesian Paradise has high operating costs in the Hotels & Motels industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Indonesian Paradise lucrative customers.

Increasing silos among functional specialists

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

Slow to harness new channels of communication

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

Ability to respond to the competition

– As the decision making is very deliberative at Indonesian Paradise, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Indonesian Paradise 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, Indonesian Paradise has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Hotels & Motels industry over the last five years. Indonesian Paradise 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.

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Indonesian Paradise Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Indonesian Paradise are -

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 Indonesian Paradise 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.

Using analytics as competitive advantage

– Indonesian Paradise has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Hotels & Motels sector. This continuous investment in analytics has enabled Indonesian Paradise to build a competitive advantage using analytics. The analytics driven competitive advantage can help Indonesian Paradise to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Leveraging digital technologies

– Indonesian Paradise 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.

Manufacturing automation

– Indonesian Paradise can use the latest technology developments to improve its manufacturing and designing process in Hotels & Motels 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.

Learning at scale

– Online learning technologies has now opened space for Indonesian Paradise 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Indonesian Paradise in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Hotels & Motels industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Hotels & Motels industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Indonesian Paradise in the Hotels & Motels industry. Now Indonesian Paradise can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at Indonesian Paradise 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 Hotels & Motels industry.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Indonesian Paradise is facing challenges because of the dominance of functional experts in the organization. Indonesian Paradise can utilize new technology in the field of Hotels & Motels industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. Indonesian Paradise can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Buying journey improvements

– Indonesian Paradise can improve the customer journey of consumers in the Hotels & Motels 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.

Harnessing reconfiguration of the global supply chains

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

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Hotels & Motels industry, but it has also influenced the consumer preferences. Indonesian Paradise can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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Threats Indonesian Paradise External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Indonesian Paradise are -

Regulatory challenges

– Indonesian Paradise 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 Hotels & Motels industry regulations.

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 Indonesian Paradise in the Hotels & Motels sector and impact the bottomline of the organization.

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. Indonesian Paradise needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.

Learning curve for new practices

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

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Indonesian Paradise 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 Indonesian Paradise prominent markets.

High dependence on third party suppliers

– Indonesian Paradise 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 acceleration in Forth Industrial Revolution

– Indonesian Paradise has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Indonesian Paradise needs to keep up with the evolution of technology in the Hotels & Motels 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.

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. Indonesian Paradise 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

– Indonesian Paradise 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. Indonesian Paradise can take advantage of this fund but it will also bring new competitors in the Hotels & Motels 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

– Indonesian Paradise 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 Hotels & Motels industry.

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 Indonesian Paradise.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Indonesian Paradise in Hotels & Motels industry. The Hotels & Motels 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.

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Weighted SWOT Analysis of Indonesian Paradise Template, Example

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

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