Asuransi Bina Dana Arta (ABDA) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Prop. & Casualty)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Asuransi Bina Dana Arta (Indonesia)
Based on various researches at Oak Spring University , Asuransi Bina Dana Arta is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Asuransi Bina Dana Arta
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Asuransi Bina Dana Arta can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asuransi Bina Dana Arta, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta can be done for the following purposes –
1. Strategic planning of Asuransi Bina Dana Arta
2. Improving business portfolio management of Asuransi Bina Dana Arta
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Insurance (Prop. & Casualty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Asuransi Bina Dana Arta
Strengths of Asuransi Bina Dana Arta | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asuransi Bina Dana Arta are -
Operational resilience
– The operational resilience strategy of Asuransi Bina Dana Arta comprises – understanding the underlying the factors in the Insurance (Prop. & Casualty) 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.
Successful track record of launching new products
– Asuransi Bina Dana Arta has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asuransi Bina Dana Arta 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.
Diverse revenue streams
– Asuransi Bina Dana Arta is present in almost all the verticals within the Insurance (Prop. & Casualty) industry. This has provided Asuransi Bina Dana Arta 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.
Analytics focus
– Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) 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.
Effective Research and Development (R&D)
– Asuransi Bina Dana Arta has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Asuransi Bina Dana Arta staying ahead in the Insurance (Prop. & Casualty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Asuransi Bina Dana Arta has one of the best training and development program in Financial 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.
Ability to recruit top talent
– Asuransi Bina Dana Arta is one of the leading players in the Insurance (Prop. & Casualty) 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.
High brand equity
– Asuransi Bina Dana Arta has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Asuransi Bina Dana Arta to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Asuransi Bina Dana Arta has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Prop. & Casualty) industry. Secondly the value chain collaborators of Asuransi Bina Dana Arta have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Asuransi Bina Dana Arta
– The covid-19 pandemic has put organizational resilience at the centre of everthing Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta 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.
Sustainable margins compare to other players in Insurance (Prop. & Casualty) industry
– Asuransi Bina Dana Arta has clearly differentiated products in the market place. This has enabled Asuransi Bina Dana Arta to fetch slight price premium compare to the competitors in the Insurance (Prop. & Casualty) industry. The sustainable margins have also helped Asuransi Bina Dana Arta to invest into research and development (R&D) and innovation.
Weaknesses of Asuransi Bina Dana Arta | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Asuransi Bina Dana Arta are -
Low market penetration in new markets
– Outside its home market of Indonesia, Asuransi Bina Dana Arta needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Insurance (Prop. & Casualty) industry
– because of the regulatory requirements in Indonesia, Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) industry.
Interest costs
– Compare to the competition, Asuransi Bina Dana Arta 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 decision making process
– As mentioned earlier in the report, Asuransi Bina Dana Arta has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Insurance (Prop. & Casualty) industry over the last five years. Asuransi Bina Dana Arta 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.
High dependence on Asuransi Bina Dana Arta ‘s star products
– The top 2 products and services of Asuransi Bina Dana Arta still accounts for major business revenue. This dependence on star products in Insurance (Prop. & Casualty) industry has resulted into insufficient focus on developing new products, even though Asuransi Bina Dana Arta has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Prop. & Casualty) industry, Asuransi Bina Dana Arta 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.
Ability to respond to the competition
– As the decision making is very deliberative at Asuransi Bina Dana Arta, in the dynamic environment of Insurance (Prop. & Casualty) industry it has struggled to respond to the nimble upstart competition. Asuransi Bina Dana Arta has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) industry using digital technology.
Skills based hiring in Insurance (Prop. & Casualty) industry
– The stress on hiring functional specialists at Asuransi Bina Dana Arta 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.
Compensation and incentives
– The revenue per employee of Asuransi Bina Dana Arta is just above the Insurance (Prop. & Casualty) 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.
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 Asuransi Bina Dana Arta supply chain. Even after few cautionary changes, Asuransi Bina Dana Arta is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Asuransi Bina Dana Arta vulnerable to further global disruptions in South East Asia.
Asuransi Bina Dana Arta Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Asuransi Bina Dana Arta are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Asuransi Bina Dana Arta can develop new processes and procedures in Insurance (Prop. & Casualty) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Asuransi Bina Dana Arta can use these opportunities to build new business models that can help the communities that Asuransi Bina Dana Arta operates in. Secondly it can use opportunities from government spending in Insurance (Prop. & Casualty) sector.
Using analytics as competitive advantage
– Asuransi Bina Dana Arta has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Prop. & Casualty) sector. This continuous investment in analytics has enabled Asuransi Bina Dana Arta to build a competitive advantage using analytics. The analytics driven competitive advantage can help Asuransi Bina Dana Arta to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Insurance (Prop. & Casualty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Asuransi Bina Dana Arta 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. Asuransi Bina Dana Arta 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asuransi Bina Dana Arta is facing challenges because of the dominance of functional experts in the organization. Asuransi Bina Dana Arta can utilize new technology in the field of Insurance (Prop. & Casualty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Asuransi Bina Dana Arta can improve the customer journey of consumers in the Insurance (Prop. & Casualty) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Insurance (Prop. & Casualty) industry, but it has also influenced the consumer preferences. Asuransi Bina Dana Arta can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Prop. & Casualty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Asuransi Bina Dana Arta in the Insurance (Prop. & Casualty) industry. Now Asuransi Bina Dana Arta can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Asuransi Bina Dana Arta 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.
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 Asuransi Bina Dana Arta 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.
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. Asuransi Bina Dana Arta can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Asuransi Bina Dana Arta External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Asuransi Bina Dana Arta are -
Consumer confidence and its impact on Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) industry and other sectors.
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.
Shortening product life cycle
– it is one of the major threat that Asuransi Bina Dana Arta is facing in Insurance (Prop. & Casualty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Asuransi Bina Dana Arta.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta in the Insurance (Prop. & Casualty) sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Asuransi Bina Dana Arta 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Asuransi Bina Dana Arta in Insurance (Prop. & Casualty) industry. The Insurance (Prop. & Casualty) 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.
Regulatory challenges
– Asuransi Bina Dana Arta 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 Insurance (Prop. & Casualty) industry regulations.
Easy access to finance
– Easy access to finance in Insurance (Prop. & Casualty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Asuransi Bina Dana Arta can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Asuransi Bina Dana Arta
– 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 Asuransi Bina Dana Arta.
Technology acceleration in Forth Industrial Revolution
– Asuransi Bina Dana Arta has witnessed rapid integration of technology during Covid-19 in the Insurance (Prop. & Casualty) industry. As one of the leading players in the industry, Asuransi Bina Dana Arta needs to keep up with the evolution of technology in the Insurance (Prop. & Casualty) 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.
Environmental challenges
– Asuransi Bina Dana Arta 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. Asuransi Bina Dana Arta can take advantage of this fund but it will also bring new competitors in the Insurance (Prop. & Casualty) industry.
Weighted SWOT Analysis of Asuransi Bina Dana Arta Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta 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 Asuransi Bina Dana Arta needs to make to build a sustainable competitive advantage.