Sumber Energi Andalan (ITMA) SWOT Analysis / TOWS Matrix / MBA Resources
Coal
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sumber Energi Andalan (Indonesia)
Based on various researches at Oak Spring University , Sumber Energi Andalan is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, geopolitical disruptions, technology disruption, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Sumber Energi Andalan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sumber Energi Andalan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sumber Energi Andalan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sumber Energi Andalan 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 Sumber Energi Andalan can be done for the following purposes –
1. Strategic planning of Sumber Energi Andalan
2. Improving business portfolio management of Sumber Energi Andalan
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sumber Energi Andalan
Strengths of Sumber Energi Andalan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sumber Energi Andalan are -
Cross disciplinary teams
– Horizontal connected teams at the Sumber Energi Andalan 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 Sumber Energi Andalan comprises – understanding the underlying the factors in the Coal 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.
High brand equity
– Sumber Energi Andalan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sumber Energi Andalan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Coal industry
– Sumber Energi Andalan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Coal industry
- digital transformation varies from industry to industry. For Sumber Energi Andalan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sumber Energi Andalan 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 recruit top talent
– Sumber Energi Andalan is one of the leading players in the Coal 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 Coal
– Sumber Energi Andalan is one of the leading players in the Coal industry in Indonesia. Over the years it has not only transformed the business landscape in the Coal industry in Indonesia but also across the existing markets. The ability to lead change has enabled Sumber Energi Andalan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Sumber Energi Andalan 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 Coal 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.
Highly skilled collaborators
– Sumber Energi Andalan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Coal industry. Secondly the value chain collaborators of Sumber Energi Andalan have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Sumber Energi Andalan
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sumber Energi Andalan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Sumber Energi Andalan is present in almost all the verticals within the Coal industry. This has provided Sumber Energi Andalan 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.
Learning organization
- Sumber Energi Andalan 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 Sumber Energi Andalan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sumber Energi Andalan emphasize – knowledge, initiative, and innovation.
Weaknesses of Sumber Energi Andalan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sumber Energi Andalan are -
Products dominated business model
– Even though Sumber Energi Andalan has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sumber Energi Andalan should strive to include more intangible value offerings along with its core products and services.
High dependence on Sumber Energi Andalan ‘s star products
– The top 2 products and services of Sumber Energi Andalan still accounts for major business revenue. This dependence on star products in Coal industry has resulted into insufficient focus on developing new products, even though Sumber Energi Andalan has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Indonesia, Sumber Energi Andalan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Sumber Energi Andalan has a high cash cycle compare to other players in the Coal industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sumber Energi Andalan is slow explore the new channels of communication. These new channels of communication can help Sumber Energi Andalan to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Coal industry
– The stress on hiring functional specialists at Sumber Energi Andalan 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.
Compensation and incentives
– The revenue per employee of Sumber Energi Andalan is just above the Coal 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 decision making process
– As mentioned earlier in the report, Sumber Energi Andalan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. Sumber Energi Andalan 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.
High operating costs
– Compare to the competitors, Sumber Energi Andalan has high operating costs in the Coal industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sumber Energi Andalan lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Sumber Energi Andalan is dominated by functional specialists. It is not different from other players in the Coal industry, but Sumber Energi Andalan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sumber Energi Andalan to focus more on services in the Coal industry rather than just following the product oriented approach.
Employees’ less understanding of Sumber Energi Andalan strategy
– From the outside it seems that the employees of Sumber Energi Andalan 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.
Sumber Energi Andalan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sumber Energi Andalan are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sumber Energi Andalan 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 Sumber Energi Andalan to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sumber Energi Andalan can use these opportunities to build new business models that can help the communities that Sumber Energi Andalan operates in. Secondly it can use opportunities from government spending in Coal sector.
Buying journey improvements
– Sumber Energi Andalan can improve the customer journey of consumers in the Coal 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.
Better consumer reach
– The expansion of the 5G network will help Sumber Energi Andalan to increase its market reach. Sumber Energi Andalan 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.
Creating value in data economy
– The success of analytics program of Sumber Energi Andalan has opened avenues for new revenue streams for the organization in Coal industry. This can help Sumber Energi Andalan to build a more holistic ecosystem for Sumber Energi Andalan products in the Coal industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Sumber Energi Andalan 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.
Developing new processes and practices
– Sumber Energi Andalan can develop new processes and procedures in Coal 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.
Manufacturing automation
– Sumber Energi Andalan can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sumber Energi Andalan 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 Sumber Energi Andalan to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sumber Energi Andalan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Coal industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sumber Energi Andalan in the Coal industry. Now Sumber Energi Andalan can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Sumber Energi Andalan 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 Coal industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sumber Energi Andalan 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 Sumber Energi Andalan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sumber Energi Andalan are -
Environmental challenges
– Sumber Energi Andalan 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. Sumber Energi Andalan can take advantage of this fund but it will also bring new competitors in the Coal industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sumber Energi Andalan 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 Sumber Energi Andalan 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. Sumber Energi Andalan needs to understand the core reasons impacting the Coal industry. This will help it in building a better workplace.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Sumber Energi Andalan will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Sumber Energi Andalan 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 Coal industry regulations.
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 Sumber Energi Andalan business can come under increasing regulations regarding data privacy, data security, etc.
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 Sumber Energi Andalan.
Increasing wage structure of Sumber Energi Andalan
– 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 Sumber Energi Andalan.
Consumer confidence and its impact on Sumber Energi Andalan 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 Coal industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sumber Energi Andalan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
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.
Technology acceleration in Forth Industrial Revolution
– Sumber Energi Andalan has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, Sumber Energi Andalan needs to keep up with the evolution of technology in the Coal 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Sumber Energi Andalan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
Weighted SWOT Analysis of Sumber Energi Andalan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sumber Energi Andalan 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 Sumber Energi Andalan 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 Sumber Energi Andalan 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 Sumber Energi Andalan 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 Sumber Energi Andalan needs to make to build a sustainable competitive advantage.
