Adi Sarana Armada (ASSA) SWOT Analysis / TOWS Matrix / MBA Resources
Rental & Leasing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Adi Sarana Armada (Indonesia)
Based on various researches at Oak Spring University , Adi Sarana Armada is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing transportation and logistics costs, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of Adi Sarana Armada
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Adi Sarana Armada can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adi Sarana Armada, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adi Sarana Armada 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 Adi Sarana Armada can be done for the following purposes –
1. Strategic planning of Adi Sarana Armada
2. Improving business portfolio management of Adi Sarana Armada
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Rental & Leasing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adi Sarana Armada
Strengths of Adi Sarana Armada | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adi Sarana Armada are -
Diverse revenue streams
– Adi Sarana Armada is present in almost all the verticals within the Rental & Leasing industry. This has provided Adi Sarana Armada 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.
High switching costs
– The high switching costs that Adi Sarana Armada 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.
Learning organization
- Adi Sarana Armada 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 Adi Sarana Armada is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Adi Sarana Armada emphasize – knowledge, initiative, and innovation.
High brand equity
– Adi Sarana Armada has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adi Sarana Armada to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Adi Sarana Armada in Rental & Leasing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Adi Sarana Armada has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Rental & Leasing industry. Secondly the value chain collaborators of Adi Sarana Armada have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Adi Sarana Armada 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.
Ability to lead change in Rental & Leasing
– Adi Sarana Armada is one of the leading players in the Rental & Leasing industry in Indonesia. Over the years it has not only transformed the business landscape in the Rental & Leasing industry in Indonesia but also across the existing markets. The ability to lead change has enabled Adi Sarana Armada 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)
– Adi Sarana Armada has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Adi Sarana Armada staying ahead in the Rental & Leasing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Adi Sarana Armada
– The covid-19 pandemic has put organizational resilience at the centre of everthing Adi Sarana Armada does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Adi Sarana Armada is one of the leading players in the Rental & Leasing 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.
Sustainable margins compare to other players in Rental & Leasing industry
– Adi Sarana Armada has clearly differentiated products in the market place. This has enabled Adi Sarana Armada to fetch slight price premium compare to the competitors in the Rental & Leasing industry. The sustainable margins have also helped Adi Sarana Armada to invest into research and development (R&D) and innovation.
Weaknesses of Adi Sarana Armada | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Adi Sarana Armada are -
High dependence on Adi Sarana Armada ‘s star products
– The top 2 products and services of Adi Sarana Armada still accounts for major business revenue. This dependence on star products in Rental & Leasing industry has resulted into insufficient focus on developing new products, even though Adi Sarana Armada has relatively successful track record of launching new products.
Lack of clear differentiation of Adi Sarana Armada products
– To increase the profitability and margins on the products, Adi Sarana Armada needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Adi Sarana Armada has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Rental & Leasing industry over the last five years. Adi Sarana Armada 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.
Employees’ less understanding of Adi Sarana Armada strategy
– From the outside it seems that the employees of Adi Sarana Armada 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, Adi Sarana Armada 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 Rental & Leasing industry using digital technology.
High operating costs
– Compare to the competitors, Adi Sarana Armada has high operating costs in the Rental & Leasing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Adi Sarana Armada lucrative customers.
Compensation and incentives
– The revenue per employee of Adi Sarana Armada is just above the Rental & Leasing 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 bargaining power of channel partners in Rental & Leasing industry
– because of the regulatory requirements in Indonesia, Adi Sarana Armada 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 Rental & Leasing industry.
Slow to strategic competitive environment developments
– As Adi Sarana Armada is one of the leading players in the Rental & Leasing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Rental & Leasing industry in last five years.
High cash cycle compare to competitors
Adi Sarana Armada has a high cash cycle compare to other players in the Rental & Leasing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Adi Sarana Armada is dominated by functional specialists. It is not different from other players in the Rental & Leasing industry, but Adi Sarana Armada needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Adi Sarana Armada to focus more on services in the Rental & Leasing industry rather than just following the product oriented approach.
Adi Sarana Armada Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Adi Sarana Armada are -
Using analytics as competitive advantage
– Adi Sarana Armada has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Rental & Leasing sector. This continuous investment in analytics has enabled Adi Sarana Armada to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adi Sarana Armada 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, Adi Sarana Armada 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 Adi Sarana Armada to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adi Sarana Armada can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Adi Sarana Armada 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 Rental & Leasing industry.
Creating value in data economy
– The success of analytics program of Adi Sarana Armada has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help Adi Sarana Armada to build a more holistic ecosystem for Adi Sarana Armada products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, 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 Adi Sarana Armada 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Adi Sarana Armada 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 Adi Sarana Armada to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Adi Sarana Armada 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.
Manufacturing automation
– Adi Sarana Armada can use the latest technology developments to improve its manufacturing and designing process in Rental & Leasing 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.
Use of Bitcoin and other crypto currencies for transactions in Rental & Leasing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Adi Sarana Armada in the Rental & Leasing industry. Now Adi Sarana Armada can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Adi Sarana Armada can develop new processes and procedures in Rental & Leasing 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Rental & Leasing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Adi Sarana Armada 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. Adi Sarana Armada 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Adi Sarana Armada 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.
Threats Adi Sarana Armada External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Adi Sarana Armada are -
Environmental challenges
– Adi Sarana Armada 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. Adi Sarana Armada can take advantage of this fund but it will also bring new competitors in the Rental & Leasing industry.
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. Adi Sarana Armada needs to understand the core reasons impacting the Rental & Leasing industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Adi Sarana Armada has witnessed rapid integration of technology during Covid-19 in the Rental & Leasing industry. As one of the leading players in the industry, Adi Sarana Armada needs to keep up with the evolution of technology in the Rental & Leasing 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.
Stagnating economy with rate increase
– Adi Sarana Armada 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 Rental & Leasing industry.
Increasing wage structure of Adi Sarana Armada
– 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 Adi Sarana Armada.
Easy access to finance
– Easy access to finance in Rental & Leasing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adi Sarana Armada can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adi Sarana Armada in Rental & Leasing industry. The Rental & Leasing 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 Rental & Leasing industry are lowering. It can presents Adi Sarana Armada with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.
Shortening product life cycle
– it is one of the major threat that Adi Sarana Armada is facing in Rental & Leasing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Adi Sarana Armada business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Adi Sarana Armada 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.
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 Adi Sarana Armada.
Weighted SWOT Analysis of Adi Sarana Armada Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Adi Sarana Armada 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 Adi Sarana Armada 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 Adi Sarana Armada 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 Adi Sarana Armada 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 Adi Sarana Armada needs to make to build a sustainable competitive advantage.
