SWOT Analysis / TOWS Matrix for Pelita Samudera (Indonesia)
Based on various researches at Oak Spring University , Pelita Samudera is operating in a macro-environment that has been destablized by – increasing energy prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization,
cloud computing is disrupting traditional business models, 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 Pelita Samudera can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pelita Samudera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pelita Samudera 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 Pelita Samudera can be done for the following purposes –
1. Strategic planning of Pelita Samudera
2. Improving business portfolio management of Pelita Samudera
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pelita Samudera
Strengths of Pelita Samudera | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pelita Samudera are -
Ability to recruit top talent
– Pelita Samudera is one of the leading players in the Water Transportation 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.
Innovation driven organization
– Pelita Samudera is one of the most innovative firm in Water Transportation sector.
Training and development
– Pelita Samudera has one of the best training and development program in Transportation 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.
High switching costs
– The high switching costs that Pelita Samudera 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
- Pelita Samudera 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 Pelita Samudera is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pelita Samudera emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Water Transportation industry
– Pelita Samudera has clearly differentiated products in the market place. This has enabled Pelita Samudera to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Pelita Samudera to invest into research and development (R&D) and innovation.
Organizational Resilience of Pelita Samudera
– The covid-19 pandemic has put organizational resilience at the centre of everthing Pelita Samudera 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 Pelita Samudera 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.
Diverse revenue streams
– Pelita Samudera is present in almost all the verticals within the Water Transportation industry. This has provided Pelita Samudera 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.
Operational resilience
– The operational resilience strategy of Pelita Samudera comprises – understanding the underlying the factors in the Water Transportation 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.
Ability to lead change in Water Transportation
– Pelita Samudera is one of the leading players in the Water Transportation industry in Indonesia. Over the years it has not only transformed the business landscape in the Water Transportation industry in Indonesia but also across the existing markets. The ability to lead change has enabled Pelita Samudera 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)
– Pelita Samudera has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Pelita Samudera staying ahead in the Water Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Pelita Samudera | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pelita Samudera are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pelita Samudera is slow explore the new channels of communication. These new channels of communication can help Pelita Samudera to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Pelita Samudera is one of the leading players in the Water Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Water Transportation industry in last five years.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Pelita Samudera 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.
Lack of clear differentiation of Pelita Samudera products
– To increase the profitability and margins on the products, Pelita Samudera needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Pelita Samudera has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners in Water Transportation industry
– because of the regulatory requirements in Indonesia, Pelita Samudera 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 Water Transportation industry.
Increasing silos among functional specialists
– The organizational structure of Pelita Samudera is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Pelita Samudera needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pelita Samudera to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Pelita Samudera has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Transportation industry over the last five years. Pelita Samudera 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.
Low market penetration in new markets
– Outside its home market of Indonesia, Pelita Samudera needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Pelita Samudera has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Pelita Samudera should strive to include more intangible value offerings along with its core products and services.
High dependence on Pelita Samudera ‘s star products
– The top 2 products and services of Pelita Samudera still accounts for major business revenue. This dependence on star products in Water Transportation industry has resulted into insufficient focus on developing new products, even though Pelita Samudera has relatively successful track record of launching new products.
Pelita Samudera Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pelita Samudera are -
Use of Bitcoin and other crypto currencies for transactions in Water Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pelita Samudera in the Water Transportation industry. Now Pelita Samudera can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Pelita Samudera to increase its market reach. Pelita Samudera 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.
Building a culture of innovation
– managers at Pelita Samudera 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 Water Transportation industry.
Manufacturing automation
– Pelita Samudera can use the latest technology developments to improve its manufacturing and designing process in Water Transportation 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.
Buying journey improvements
– Pelita Samudera can improve the customer journey of consumers in the Water Transportation 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.
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 Pelita Samudera 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.
Creating value in data economy
– The success of analytics program of Pelita Samudera has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Pelita Samudera to build a more holistic ecosystem for Pelita Samudera products in the Water Transportation 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, Pelita Samudera 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pelita Samudera in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Transportation industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Water Transportation industry, but it has also influenced the consumer preferences. Pelita Samudera can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Pelita Samudera can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Water Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pelita Samudera 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. Pelita Samudera 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.
Developing new processes and practices
– Pelita Samudera can develop new processes and procedures in Water Transportation 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.
Threats Pelita Samudera External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pelita Samudera are -
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 Pelita Samudera in the Water Transportation sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Pelita Samudera 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.
Environmental challenges
– Pelita Samudera 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. Pelita Samudera can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Stagnating economy with rate increase
– Pelita Samudera 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 Water Transportation industry.
Regulatory challenges
– Pelita Samudera 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 Water Transportation industry regulations.
Shortening product life cycle
– it is one of the major threat that Pelita Samudera is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Pelita Samudera may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Transportation sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pelita Samudera in Water Transportation industry. The Water Transportation 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.
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 Pelita Samudera business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pelita Samudera 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 Pelita Samudera prominent markets.
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. Pelita Samudera needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Water Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pelita Samudera can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Pelita Samudera Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pelita Samudera 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 Pelita Samudera 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 Pelita Samudera 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 Pelita Samudera 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 Pelita Samudera needs to make to build a sustainable competitive advantage.
