Polychem Indonesia (ADMG) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Polychem Indonesia (Indonesia)
Based on various researches at Oak Spring University , Polychem Indonesia is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, technology disruption, challanges to central banks by blockchain based private currencies, increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Polychem Indonesia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Polychem Indonesia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Polychem Indonesia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Polychem Indonesia 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 Polychem Indonesia can be done for the following purposes –
1. Strategic planning of Polychem Indonesia
2. Improving business portfolio management of Polychem Indonesia
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Polychem Indonesia
Strengths of Polychem Indonesia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Polychem Indonesia are -
High switching costs
– The high switching costs that Polychem Indonesia 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.
Training and development
– Polychem Indonesia has one of the best training and development program in Basic Materials 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.
Learning organization
- Polychem Indonesia 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 Polychem Indonesia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Polychem Indonesia emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Polychem Indonesia is one of the leading players in the Chemical Manufacturing 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.
Ability to lead change in Chemical Manufacturing
– Polychem Indonesia is one of the leading players in the Chemical Manufacturing industry in Indonesia. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in Indonesia but also across the existing markets. The ability to lead change has enabled Polychem Indonesia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Polychem Indonesia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Polychem Indonesia staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Polychem Indonesia in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Polychem Indonesia
– The covid-19 pandemic has put organizational resilience at the centre of everthing Polychem Indonesia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Polychem Indonesia 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 Chemical Manufacturing 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.
High brand equity
– Polychem Indonesia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Polychem Indonesia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Polychem Indonesia in the Basic Materials sector have low bargaining power. Polychem Indonesia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Polychem Indonesia to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Polychem Indonesia has clearly differentiated products in the market place. This has enabled Polychem Indonesia to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Polychem Indonesia to invest into research and development (R&D) and innovation.
Weaknesses of Polychem Indonesia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Polychem Indonesia are -
Interest costs
– Compare to the competition, Polychem Indonesia 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Polychem Indonesia is slow explore the new channels of communication. These new channels of communication can help Polychem Indonesia to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Polychem Indonesia 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.
High operating costs
– Compare to the competitors, Polychem Indonesia has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Polychem Indonesia lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Polychem Indonesia, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Polychem Indonesia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Polychem Indonesia strategy
– From the outside it seems that the employees of Polychem Indonesia 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.
Capital Spending Reduction
– Even during the low interest decade, Polychem Indonesia 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 Chemical Manufacturing industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Polychem Indonesia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Polychem Indonesia 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.
Products dominated business model
– Even though Polychem Indonesia has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Polychem Indonesia should strive to include more intangible value offerings along with its core products and services.
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 Polychem Indonesia supply chain. Even after few cautionary changes, Polychem Indonesia is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Polychem Indonesia vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Chemical Manufacturing industry, Polychem Indonesia 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.
Polychem Indonesia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Polychem Indonesia are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Polychem Indonesia 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 Polychem Indonesia to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Polychem Indonesia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Polychem Indonesia has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Polychem Indonesia to build a more holistic ecosystem for Polychem Indonesia products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Polychem Indonesia 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.
Using analytics as competitive advantage
– Polychem Indonesia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Polychem Indonesia to build a competitive advantage using analytics. The analytics driven competitive advantage can help Polychem Indonesia 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 Polychem Indonesia 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 Chemical Manufacturing industry.
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 Polychem Indonesia 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.
Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Polychem Indonesia in the Chemical Manufacturing industry. Now Polychem Indonesia can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Polychem Indonesia is facing challenges because of the dominance of functional experts in the organization. Polychem Indonesia can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Polychem Indonesia can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Polychem Indonesia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Polychem Indonesia can develop new processes and procedures in Chemical Manufacturing 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.
Better consumer reach
– The expansion of the 5G network will help Polychem Indonesia to increase its market reach. Polychem Indonesia 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.
Threats Polychem Indonesia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Polychem Indonesia are -
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.
Environmental challenges
– Polychem Indonesia 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. Polychem Indonesia can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Polychem Indonesia 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 Polychem Indonesia prominent markets.
Consumer confidence and its impact on Polychem Indonesia 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 Chemical Manufacturing industry and other sectors.
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 Polychem Indonesia.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Polychem Indonesia in Chemical Manufacturing industry. The Chemical Manufacturing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Polychem Indonesia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
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 Polychem Indonesia in the Chemical Manufacturing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Polychem Indonesia 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 Chemical Manufacturing industry.
Shortening product life cycle
– it is one of the major threat that Polychem Indonesia is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Polychem Indonesia 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Polychem Indonesia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Polychem Indonesia business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Polychem Indonesia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Polychem Indonesia 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 Polychem Indonesia 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 Polychem Indonesia 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 Polychem Indonesia 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 Polychem Indonesia needs to make to build a sustainable competitive advantage.