SWOT Analysis / TOWS Matrix for Gajah Tunggal (Indonesia)
Based on various researches at Oak Spring University , Gajah Tunggal is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Gajah Tunggal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gajah Tunggal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gajah Tunggal 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 Gajah Tunggal can be done for the following purposes –
1. Strategic planning of Gajah Tunggal
2. Improving business portfolio management of Gajah Tunggal
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Tires sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gajah Tunggal
Strengths of Gajah Tunggal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gajah Tunggal are -
Superior customer experience
– The customer experience strategy of Gajah Tunggal in Tires industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Gajah Tunggal
– The covid-19 pandemic has put organizational resilience at the centre of everthing Gajah Tunggal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Gajah Tunggal comprises – understanding the underlying the factors in the Tires 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.
Sustainable margins compare to other players in Tires industry
– Gajah Tunggal has clearly differentiated products in the market place. This has enabled Gajah Tunggal to fetch slight price premium compare to the competitors in the Tires industry. The sustainable margins have also helped Gajah Tunggal to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Gajah Tunggal 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.
Innovation driven organization
– Gajah Tunggal is one of the most innovative firm in Tires sector.
Digital Transformation in Tires industry
- digital transformation varies from industry to industry. For Gajah Tunggal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gajah Tunggal 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.
Successful track record of launching new products
– Gajah Tunggal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gajah Tunggal 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.
Low bargaining power of suppliers
– Suppliers of Gajah Tunggal in the Consumer Cyclical sector have low bargaining power. Gajah Tunggal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gajah Tunggal to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Gajah Tunggal is present in almost all the verticals within the Tires industry. This has provided Gajah Tunggal 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.
Training and development
– Gajah Tunggal has one of the best training and development program in Consumer Cyclical 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 lead change in Tires
– Gajah Tunggal is one of the leading players in the Tires industry in Indonesia. Over the years it has not only transformed the business landscape in the Tires industry in Indonesia but also across the existing markets. The ability to lead change has enabled Gajah Tunggal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Gajah Tunggal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gajah Tunggal are -
No frontier risks strategy
– From the 10K / annual statement of Gajah Tunggal, it seems that company is thinking out the frontier risks that can impact Tires industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners in Tires industry
– because of the regulatory requirements in Indonesia, Gajah Tunggal 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 Tires industry.
Capital Spending Reduction
– Even during the low interest decade, Gajah Tunggal 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 Tires industry using digital technology.
High dependence on Gajah Tunggal ‘s star products
– The top 2 products and services of Gajah Tunggal still accounts for major business revenue. This dependence on star products in Tires industry has resulted into insufficient focus on developing new products, even though Gajah Tunggal has relatively successful track record of launching new products.
High cash cycle compare to competitors
Gajah Tunggal has a high cash cycle compare to other players in the Tires industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gajah Tunggal is slow explore the new channels of communication. These new channels of communication can help Gajah Tunggal to provide better information regarding Tires products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Gajah Tunggal is dominated by functional specialists. It is not different from other players in the Tires industry, but Gajah Tunggal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gajah Tunggal to focus more on services in the Tires industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Gajah Tunggal needs to have more collaboration between its sales team and marketing team. Sales professionals in the Tires industry have deep experience in developing customer relationships. Marketing department at Gajah Tunggal can leverage the sales team experience to cultivate customer relationships as Gajah Tunggal is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Tires industry, Gajah Tunggal 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 Gajah Tunggal, in the dynamic environment of Tires industry it has struggled to respond to the nimble upstart competition. Gajah Tunggal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Indonesia, Gajah Tunggal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Gajah Tunggal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Gajah Tunggal are -
Using analytics as competitive advantage
– Gajah Tunggal has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Tires sector. This continuous investment in analytics has enabled Gajah Tunggal to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gajah Tunggal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Gajah Tunggal 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.
Building a culture of innovation
– managers at Gajah Tunggal 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 Tires industry.
Learning at scale
– Online learning technologies has now opened space for Gajah Tunggal 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 Gajah Tunggal in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Tires industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Gajah Tunggal to increase its market reach. Gajah Tunggal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gajah Tunggal 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 Gajah Tunggal 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, Gajah Tunggal 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
– Gajah Tunggal can develop new processes and procedures in Tires 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.
Use of Bitcoin and other crypto currencies for transactions in Tires industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gajah Tunggal in the Tires industry. Now Gajah Tunggal can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gajah Tunggal can use these opportunities to build new business models that can help the communities that Gajah Tunggal operates in. Secondly it can use opportunities from government spending in Tires sector.
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. Gajah Tunggal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Gajah Tunggal can use the latest technology developments to improve its manufacturing and designing process in Tires 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.
Threats Gajah Tunggal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Gajah Tunggal are -
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. Gajah Tunggal 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 acceleration in Forth Industrial Revolution
– Gajah Tunggal has witnessed rapid integration of technology during Covid-19 in the Tires industry. As one of the leading players in the industry, Gajah Tunggal needs to keep up with the evolution of technology in the Tires 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.
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 Gajah Tunggal in the Tires sector and impact the bottomline of the organization.
Environmental challenges
– Gajah Tunggal 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. Gajah Tunggal can take advantage of this fund but it will also bring new competitors in the Tires industry.
Regulatory challenges
– Gajah Tunggal 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 Tires industry regulations.
Stagnating economy with rate increase
– Gajah Tunggal 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 Tires industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gajah Tunggal 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 Gajah Tunggal prominent markets.
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.
Consumer confidence and its impact on Gajah Tunggal 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 Tires industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Tires industry are lowering. It can presents Gajah Tunggal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Tires sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Gajah Tunggal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Tires sector.
Easy access to finance
– Easy access to finance in Tires industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gajah Tunggal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Gajah Tunggal 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.
Weighted SWOT Analysis of Gajah Tunggal Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal 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 Gajah Tunggal needs to make to build a sustainable competitive advantage.