Red Planet Indonesia Tbk (PSKT) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Red Planet Indonesia Tbk (Indonesia)

Based on various researches at Oak Spring University , Red Planet Indonesia Tbk is operating in a macro-environment that has been destablized by – increasing energy prices, increasing transportation and logistics costs, technology disruption, increasing commodity prices, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Red Planet Indonesia Tbk

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Red Planet Indonesia Tbk can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Red Planet Indonesia Tbk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk can be done for the following purposes –
1. Strategic planning of Red Planet Indonesia Tbk
2. Improving business portfolio management of Red Planet Indonesia Tbk
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Hotels & Motels sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Red Planet Indonesia Tbk

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Strengths of Red Planet Indonesia Tbk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Red Planet Indonesia Tbk are -

Low bargaining power of suppliers

– Suppliers of Red Planet Indonesia Tbk in the Services sector have low bargaining power. Red Planet Indonesia Tbk has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Red Planet Indonesia Tbk to manage not only supply disruptions but also source products at highly competitive prices.

Innovation driven organization

– Red Planet Indonesia Tbk is one of the most innovative firm in Hotels & Motels sector.

Successful track record of launching new products

– Red Planet Indonesia Tbk has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Red Planet Indonesia Tbk has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Analytics focus

– Red Planet Indonesia Tbk 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 Hotels & Motels 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.

Strong track record of project management in the Hotels & Motels industry

– Red Planet Indonesia Tbk is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Ability to lead change in Hotels & Motels

– Red Planet Indonesia Tbk is one of the leading players in the Hotels & Motels industry in Indonesia. Over the years it has not only transformed the business landscape in the Hotels & Motels industry in Indonesia but also across the existing markets. The ability to lead change has enabled Red Planet Indonesia Tbk in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Red Planet Indonesia Tbk 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.

Diverse revenue streams

– Red Planet Indonesia Tbk is present in almost all the verticals within the Hotels & Motels industry. This has provided Red Planet Indonesia Tbk 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.

Training and development

– Red Planet Indonesia Tbk has one of the best training and development program in Services 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.

Highly skilled collaborators

– Red Planet Indonesia Tbk has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Hotels & Motels industry. Secondly the value chain collaborators of Red Planet Indonesia Tbk have helped the firm to develop new products and bring them quickly to the marketplace.

Cross disciplinary teams

– Horizontal connected teams at the Red Planet Indonesia Tbk 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.

Sustainable margins compare to other players in Hotels & Motels industry

– Red Planet Indonesia Tbk has clearly differentiated products in the market place. This has enabled Red Planet Indonesia Tbk to fetch slight price premium compare to the competitors in the Hotels & Motels industry. The sustainable margins have also helped Red Planet Indonesia Tbk to invest into research and development (R&D) and innovation.

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Weaknesses of Red Planet Indonesia Tbk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Red Planet Indonesia Tbk are -

Aligning sales with marketing

– From the outside it seems that Red Planet Indonesia Tbk needs to have more collaboration between its sales team and marketing team. Sales professionals in the Hotels & Motels industry have deep experience in developing customer relationships. Marketing department at Red Planet Indonesia Tbk can leverage the sales team experience to cultivate customer relationships as Red Planet Indonesia Tbk is planning to shift buying processes online.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Red Planet Indonesia Tbk is slow explore the new channels of communication. These new channels of communication can help Red Planet Indonesia Tbk to provide better information regarding Hotels & Motels products and services. It can also build an online community to further reach out to potential customers.

Workers concerns about automation

– As automation is fast increasing in the Hotels & Motels industry, Red Planet Indonesia Tbk 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.

Capital Spending Reduction

– Even during the low interest decade, Red Planet Indonesia Tbk 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 Hotels & Motels industry using digital technology.

Ability to respond to the competition

– As the decision making is very deliberative at Red Planet Indonesia Tbk, in the dynamic environment of Hotels & Motels industry it has struggled to respond to the nimble upstart competition. Red Planet Indonesia Tbk has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Hotels & Motels industry

– The stress on hiring functional specialists at Red Planet Indonesia Tbk 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.

Increasing silos among functional specialists

– The organizational structure of Red Planet Indonesia Tbk is dominated by functional specialists. It is not different from other players in the Hotels & Motels industry, but Red Planet Indonesia Tbk needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Red Planet Indonesia Tbk to focus more on services in the Hotels & Motels industry rather than just following the product oriented approach.

Need for greater diversity

– Red Planet Indonesia Tbk 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.

Employees’ less understanding of Red Planet Indonesia Tbk strategy

– From the outside it seems that the employees of Red Planet Indonesia Tbk 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 cash cycle compare to competitors

Red Planet Indonesia Tbk has a high cash cycle compare to other players in the Hotels & Motels 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 Red Planet Indonesia Tbk is just above the Hotels & Motels 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.

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Red Planet Indonesia Tbk Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Red Planet Indonesia Tbk are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Red Planet Indonesia Tbk 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.

Developing new processes and practices

– Red Planet Indonesia Tbk can develop new processes and procedures in Hotels & Motels 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

– Red Planet Indonesia Tbk can use the latest technology developments to improve its manufacturing and designing process in Hotels & Motels 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Hotels & Motels industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Red Planet Indonesia Tbk 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. Red Planet Indonesia Tbk 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.

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. Red Planet Indonesia Tbk can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Hotels & Motels industry, but it has also influenced the consumer preferences. Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk 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 Hotels & Motels industry.

Buying journey improvements

– Red Planet Indonesia Tbk can improve the customer journey of consumers in the Hotels & Motels 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.

Using analytics as competitive advantage

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

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Red Planet Indonesia Tbk can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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 Red Planet Indonesia Tbk 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Red Planet Indonesia Tbk is facing challenges because of the dominance of functional experts in the organization. Red Planet Indonesia Tbk can utilize new technology in the field of Hotels & Motels industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Harnessing reconfiguration of the global supply chains

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

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Threats Red Planet Indonesia Tbk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Red Planet Indonesia Tbk are -

Environmental challenges

– Red Planet Indonesia Tbk 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. Red Planet Indonesia Tbk can take advantage of this fund but it will also bring new competitors in the Hotels & Motels industry.

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 Red Planet Indonesia Tbk.

High dependence on third party suppliers

– Red Planet Indonesia Tbk 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.

Easy access to finance

– Easy access to finance in Hotels & Motels industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Red Planet Indonesia Tbk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Red Planet Indonesia Tbk needs to understand the core reasons impacting the Hotels & Motels industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Red Planet Indonesia Tbk 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 Hotels & Motels industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Red Planet Indonesia Tbk in Hotels & Motels industry. The Hotels & Motels 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.

Regulatory challenges

– Red Planet Indonesia Tbk 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 Hotels & Motels 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 Red Planet Indonesia Tbk 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, Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk prominent markets.

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 Red Planet Indonesia Tbk in the Hotels & Motels sector and impact the bottomline of the organization.

Consumer confidence and its impact on Red Planet Indonesia Tbk 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 Hotels & Motels industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Red Planet Indonesia Tbk may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Hotels & Motels sector.

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Weighted SWOT Analysis of Red Planet Indonesia Tbk Template, Example

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

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