Wilmar Cahaya Ind (CEKA) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Wilmar Cahaya Ind (Indonesia)

Based on various researches at Oak Spring University , Wilmar Cahaya Ind is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, geopolitical disruptions, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Wilmar Cahaya Ind

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wilmar Cahaya Ind can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wilmar Cahaya Ind, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wilmar Cahaya Ind 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Wilmar Cahaya Ind can be done for the following purposes –
1. Strategic planning of Wilmar Cahaya Ind
2. Improving business portfolio management of Wilmar Cahaya Ind
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wilmar Cahaya Ind

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Strengths of Wilmar Cahaya Ind | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wilmar Cahaya Ind are -

Low bargaining power of suppliers

– Suppliers of Wilmar Cahaya Ind in the Consumer/Non-Cyclical sector have low bargaining power. Wilmar Cahaya Ind has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wilmar Cahaya Ind to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the Wilmar Cahaya Ind 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.

Operational resilience

– The operational resilience strategy of Wilmar Cahaya Ind comprises – understanding the underlying the factors in the Food Processing 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 Food Processing industry

– Wilmar Cahaya Ind has clearly differentiated products in the market place. This has enabled Wilmar Cahaya Ind to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Wilmar Cahaya Ind to invest into research and development (R&D) and innovation.

High brand equity

– Wilmar Cahaya Ind has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wilmar Cahaya Ind to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– Wilmar Cahaya Ind is one of the most innovative firm in Food Processing sector.

Diverse revenue streams

– Wilmar Cahaya Ind is present in almost all the verticals within the Food Processing industry. This has provided Wilmar Cahaya Ind 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.

Ability to recruit top talent

– Wilmar Cahaya Ind is one of the leading players in the Food Processing 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.

Strong track record of project management in the Food Processing industry

– Wilmar Cahaya Ind 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

– Wilmar Cahaya Ind has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Wilmar Cahaya Ind have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in Food Processing industry

- digital transformation varies from industry to industry. For Wilmar Cahaya Ind digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wilmar Cahaya Ind 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.

Ability to lead change in Food Processing

– Wilmar Cahaya Ind is one of the leading players in the Food Processing industry in Indonesia. Over the years it has not only transformed the business landscape in the Food Processing industry in Indonesia but also across the existing markets. The ability to lead change has enabled Wilmar Cahaya Ind in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses of Wilmar Cahaya Ind | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Wilmar Cahaya Ind are -

Lack of clear differentiation of Wilmar Cahaya Ind products

– To increase the profitability and margins on the products, Wilmar Cahaya Ind needs to provide more differentiated products than what it is currently offering in the marketplace.

High operating costs

– Compare to the competitors, Wilmar Cahaya Ind has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Wilmar Cahaya Ind lucrative customers.

Products dominated business model

– Even though Wilmar Cahaya Ind has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Wilmar Cahaya Ind should strive to include more intangible value offerings along with its core products and services.

High dependence on Wilmar Cahaya Ind ‘s star products

– The top 2 products and services of Wilmar Cahaya Ind still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Wilmar Cahaya Ind has relatively successful track record of launching new products.

High cash cycle compare to competitors

Wilmar Cahaya Ind has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Compensation and incentives

– The revenue per employee of Wilmar Cahaya Ind is just above the Food Processing 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.

Slow to strategic competitive environment developments

– As Wilmar Cahaya Ind is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.

Skills based hiring in Food Processing industry

– The stress on hiring functional specialists at Wilmar Cahaya Ind 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.

Low market penetration in new markets

– Outside its home market of Indonesia, Wilmar Cahaya Ind needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, Wilmar Cahaya Ind 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.

Workers concerns about automation

– As automation is fast increasing in the Food Processing industry, Wilmar Cahaya Ind 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.

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Wilmar Cahaya Ind Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Wilmar Cahaya Ind are -

Creating value in data economy

– The success of analytics program of Wilmar Cahaya Ind has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Wilmar Cahaya Ind to build a more holistic ecosystem for Wilmar Cahaya Ind products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wilmar Cahaya Ind 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. Wilmar Cahaya Ind 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.

Better consumer reach

– The expansion of the 5G network will help Wilmar Cahaya Ind to increase its market reach. Wilmar Cahaya Ind 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wilmar Cahaya Ind 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 Wilmar Cahaya Ind to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Wilmar Cahaya Ind in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing 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 Food Processing industry, but it has also influenced the consumer preferences. Wilmar Cahaya Ind can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Building a culture of innovation

– managers at Wilmar Cahaya Ind 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 Food Processing industry.

Use of Bitcoin and other crypto currencies for transactions in Food Processing industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wilmar Cahaya Ind in the Food Processing industry. Now Wilmar Cahaya Ind can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Wilmar Cahaya Ind 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 Wilmar Cahaya Ind to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Using analytics as competitive advantage

– Wilmar Cahaya Ind has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Wilmar Cahaya Ind to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wilmar Cahaya Ind to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Wilmar Cahaya Ind 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.

Learning at scale

– Online learning technologies has now opened space for Wilmar Cahaya Ind 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Wilmar Cahaya Ind 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.

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Threats Wilmar Cahaya Ind External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Wilmar Cahaya Ind are -

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. Wilmar Cahaya Ind needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.

Easy access to finance

– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wilmar Cahaya Ind 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 Wilmar Cahaya Ind in Food Processing industry. The Food Processing 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.

Technology acceleration in Forth Industrial Revolution

– Wilmar Cahaya Ind has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Wilmar Cahaya Ind needs to keep up with the evolution of technology in the Food Processing 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.

High dependence on third party suppliers

– Wilmar Cahaya Ind 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 Wilmar Cahaya Ind.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Wilmar Cahaya Ind may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.

Stagnating economy with rate increase

– Wilmar Cahaya Ind 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 Food Processing industry.

Regulatory challenges

– Wilmar Cahaya Ind 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 Food Processing industry regulations.

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 Wilmar Cahaya Ind in the Food Processing sector and impact the bottomline of the organization.

Increasing wage structure of Wilmar Cahaya Ind

– 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 Wilmar Cahaya Ind.

Environmental challenges

– Wilmar Cahaya Ind 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. Wilmar Cahaya Ind can take advantage of this fund but it will also bring new competitors in the Food Processing industry.

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Weighted SWOT Analysis of Wilmar Cahaya Ind Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wilmar Cahaya Ind 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 Wilmar Cahaya Ind 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 Wilmar Cahaya Ind 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 Wilmar Cahaya Ind 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 Wilmar Cahaya Ind needs to make to build a sustainable competitive advantage.

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