SWOT Analysis / TOWS Matrix for Gihon Telekom (Indonesia)
Based on various researches at Oak Spring University , Gihon Telekom is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Gihon Telekom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gihon Telekom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gihon Telekom 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 Gihon Telekom can be done for the following purposes –
1. Strategic planning of Gihon Telekom
2. Improving business portfolio management of Gihon Telekom
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gihon Telekom
Strengths of Gihon Telekom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gihon Telekom are -
Strong track record of project management in the Communications Services industry
– Gihon Telekom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Gihon Telekom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Gihon Telekom have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Gihon Telekom in the Services sector have low bargaining power. Gihon Telekom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gihon Telekom to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Gihon Telekom 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.
Sustainable margins compare to other players in Communications Services industry
– Gihon Telekom has clearly differentiated products in the market place. This has enabled Gihon Telekom to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Gihon Telekom to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Gihon Telekom in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Gihon Telekom is one of the most innovative firm in Communications Services sector.
Organizational Resilience of Gihon Telekom
– The covid-19 pandemic has put organizational resilience at the centre of everthing Gihon Telekom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For Gihon Telekom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gihon Telekom 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.
Cross disciplinary teams
– Horizontal connected teams at the Gihon Telekom 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.
High brand equity
– Gihon Telekom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gihon Telekom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Gihon Telekom is one of the leading players in the Communications Services 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.
Weaknesses of Gihon Telekom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gihon Telekom are -
No frontier risks strategy
– From the 10K / annual statement of Gihon Telekom, it seems that company is thinking out the frontier risks that can impact Communications Services 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.
Lack of clear differentiation of Gihon Telekom products
– To increase the profitability and margins on the products, Gihon Telekom needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Gihon Telekom has a high cash cycle compare to other players in the Communications Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Gihon Telekom strategy
– From the outside it seems that the employees of Gihon Telekom 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.
High bargaining power of channel partners in Communications Services industry
– because of the regulatory requirements in Indonesia, Gihon Telekom 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 Communications Services industry.
Capital Spending Reduction
– Even during the low interest decade, Gihon Telekom 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 Communications Services industry using digital technology.
High dependence on Gihon Telekom ‘s star products
– The top 2 products and services of Gihon Telekom still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Gihon Telekom has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Indonesia, Gihon Telekom needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Gihon Telekom has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Communications Services industry over the last five years. Gihon Telekom 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gihon Telekom is slow explore the new channels of communication. These new channels of communication can help Gihon Telekom to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Gihon Telekom 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.
Gihon Telekom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Gihon Telekom are -
Developing new processes and practices
– Gihon Telekom can develop new processes and procedures in Communications Services 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.
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. Gihon Telekom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Gihon Telekom can improve the customer journey of consumers in the Communications Services 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.
Leveraging digital technologies
– Gihon Telekom 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gihon Telekom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Gihon Telekom 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.
Better consumer reach
– The expansion of the 5G network will help Gihon Telekom to increase its market reach. Gihon Telekom 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 Gihon Telekom 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 Communications Services industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gihon Telekom 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 Gihon Telekom to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Gihon Telekom has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Gihon Telekom to build a more holistic ecosystem for Gihon Telekom products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gihon Telekom in the Communications Services industry. Now Gihon Telekom can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Gihon Telekom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gihon Telekom is facing challenges because of the dominance of functional experts in the organization. Gihon Telekom can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Gihon Telekom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Gihon Telekom are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gihon Telekom 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 Gihon Telekom prominent markets.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents Gihon Telekom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.
High dependence on third party suppliers
– Gihon Telekom 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.
Stagnating economy with rate increase
– Gihon Telekom 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 Communications Services industry.
Increasing wage structure of Gihon Telekom
– 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 Gihon Telekom.
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 Gihon Telekom business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Gihon Telekom 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 Communications Services industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Gihon Telekom has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, Gihon Telekom needs to keep up with the evolution of technology in the Communications Services 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gihon Telekom in Communications Services industry. The Communications Services 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Gihon Telekom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
Shortening product life cycle
– it is one of the major threat that Gihon Telekom is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Gihon Telekom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Gihon Telekom 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 Gihon Telekom 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 Gihon Telekom 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 Gihon Telekom 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 Gihon Telekom needs to make to build a sustainable competitive advantage.