SWOT Analysis / TOWS Matrix for PT Surya Pertiwi (Indonesia)
Based on various researches at Oak Spring University , PT Surya Pertiwi is operating in a macro-environment that has been destablized by – increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, there is backlash against globalization, technology disruption, cloud computing is disrupting traditional business models,
increasing energy prices, 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 PT Surya Pertiwi can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PT Surya Pertiwi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PT Surya 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 PT Surya Pertiwi can be done for the following purposes –
1. Strategic planning of PT Surya Pertiwi
2. Improving business portfolio management of PT Surya Pertiwi
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Retail (Home Improvement) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PT Surya Pertiwi
Strengths of PT Surya Pertiwi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PT Surya Pertiwi are -
Effective Research and Development (R&D)
– PT Surya Pertiwi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PT Surya Pertiwi staying ahead in the Retail (Home Improvement) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– PT Surya Pertiwi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PT Surya 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.
Learning organization
- PT Surya 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 PT Surya Pertiwi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PT Surya Pertiwi emphasize – knowledge, initiative, and innovation.
High brand equity
– PT Surya Pertiwi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PT Surya Pertiwi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of PT Surya Pertiwi in Retail (Home Improvement) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– PT Surya Pertiwi is one of the most innovative firm in Retail (Home Improvement) sector.
Training and development
– PT Surya Pertiwi has one of the best training and development program in Services 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.
Operational resilience
– The operational resilience strategy of PT Surya Pertiwi comprises – understanding the underlying the factors in the Retail (Home Improvement) 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.
Diverse revenue streams
– PT Surya Pertiwi is present in almost all the verticals within the Retail (Home Improvement) industry. This has provided PT Surya Pertiwi 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.
Cross disciplinary teams
– Horizontal connected teams at the PT Surya Pertiwi 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.
Highly skilled collaborators
– PT Surya Pertiwi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Home Improvement) industry. Secondly the value chain collaborators of PT Surya Pertiwi have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that PT Surya Pertiwi 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.
Weaknesses of PT Surya Pertiwi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PT Surya Pertiwi are -
Increasing silos among functional specialists
– The organizational structure of PT Surya Pertiwi is dominated by functional specialists. It is not different from other players in the Retail (Home Improvement) industry, but PT Surya Pertiwi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PT Surya Pertiwi to focus more on services in the Retail (Home Improvement) industry rather than just following the product oriented approach.
Employees’ less understanding of PT Surya Pertiwi strategy
– From the outside it seems that the employees of PT Surya Pertiwi 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.
Lack of clear differentiation of PT Surya Pertiwi products
– To increase the profitability and margins on the products, PT Surya Pertiwi needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, PT Surya 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.
High dependence on PT Surya Pertiwi ‘s star products
– The top 2 products and services of PT Surya Pertiwi still accounts for major business revenue. This dependence on star products in Retail (Home Improvement) industry has resulted into insufficient focus on developing new products, even though PT Surya Pertiwi has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, PT Surya Pertiwi is slow explore the new channels of communication. These new channels of communication can help PT Surya Pertiwi to provide better information regarding Retail (Home Improvement) products and services. It can also build an online community to further reach out to potential customers.
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 PT Surya Pertiwi supply chain. Even after few cautionary changes, PT Surya Pertiwi is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left PT Surya Pertiwi vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
PT Surya Pertiwi has a high cash cycle compare to other players in the Retail (Home Improvement) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Indonesia, PT Surya Pertiwi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Retail (Home Improvement) industry, PT Surya 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.
Capital Spending Reduction
– Even during the low interest decade, PT Surya 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 Retail (Home Improvement) industry using digital technology.
PT Surya Pertiwi Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PT Surya Pertiwi are -
Developing new processes and practices
– PT Surya Pertiwi can develop new processes and procedures in Retail (Home Improvement) 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.
Buying journey improvements
– PT Surya Pertiwi can improve the customer journey of consumers in the Retail (Home Improvement) 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.
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. PT Surya Pertiwi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– PT Surya Pertiwi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Home Improvement) sector. This continuous investment in analytics has enabled PT Surya Pertiwi to build a competitive advantage using analytics. The analytics driven competitive advantage can help PT Surya Pertiwi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PT Surya 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 PT Surya 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for PT Surya 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 PT Surya Pertiwi to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– PT Surya Pertiwi 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.
Learning at scale
– Online learning technologies has now opened space for PT Surya Pertiwi 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.
Better consumer reach
– The expansion of the 5G network will help PT Surya Pertiwi to increase its market reach. PT Surya 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Home Improvement) industry, but it has also influenced the consumer preferences. PT Surya Pertiwi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PT Surya Pertiwi can use these opportunities to build new business models that can help the communities that PT Surya Pertiwi operates in. Secondly it can use opportunities from government spending in Retail (Home Improvement) sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Home Improvement) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PT Surya Pertiwi 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. PT Surya Pertiwi 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.
Loyalty marketing
– PT Surya 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.
Threats PT Surya Pertiwi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PT Surya Pertiwi are -
Environmental challenges
– PT Surya Pertiwi 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. PT Surya Pertiwi can take advantage of this fund but it will also bring new competitors in the Retail (Home Improvement) industry.
Increasing wage structure of PT Surya 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 PT Surya Pertiwi.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, PT Surya Pertiwi 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 PT Surya Pertiwi prominent markets.
Shortening product life cycle
– it is one of the major threat that PT Surya Pertiwi is facing in Retail (Home Improvement) 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 PT Surya Pertiwi.
High dependence on third party suppliers
– PT Surya 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for PT Surya Pertiwi in Retail (Home Improvement) industry. The Retail (Home Improvement) 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
– PT Surya 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 Retail (Home Improvement) industry regulations.
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. PT Surya Pertiwi needs to understand the core reasons impacting the Retail (Home Improvement) industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– PT Surya Pertiwi has witnessed rapid integration of technology during Covid-19 in the Retail (Home Improvement) industry. As one of the leading players in the industry, PT Surya Pertiwi needs to keep up with the evolution of technology in the Retail (Home Improvement) 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, PT Surya 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 Retail (Home Improvement) sector.
Stagnating economy with rate increase
– PT Surya 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 Retail (Home Improvement) industry.
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 PT Surya Pertiwi in the Retail (Home Improvement) sector and impact the bottomline of the organization.
Weighted SWOT Analysis of PT Surya Pertiwi Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PT Surya 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 PT Surya 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 PT Surya 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 PT Surya 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 PT Surya Pertiwi needs to make to build a sustainable competitive advantage.
