Red Planet Indonesia Tbk (PSKT) SWOT Analysis / TOWS Matrix / MBA Resources
Hotels & Motels
Strategy / 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 – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
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.
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
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 -
Organizational Resilience of Red Planet Indonesia Tbk
– The covid-19 pandemic has put organizational resilience at the centre of everthing Red Planet Indonesia Tbk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Red Planet Indonesia Tbk has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Red Planet Indonesia Tbk staying ahead in the Hotels & Motels industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Innovation driven organization
– Red Planet Indonesia Tbk is one of the most innovative firm in Hotels & Motels sector.
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.
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.
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.
Digital Transformation in Hotels & Motels industry
- digital transformation varies from industry to industry. For Red Planet Indonesia Tbk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Red Planet Indonesia Tbk 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.
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.
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.
Learning organization
- Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Red Planet Indonesia Tbk emphasize – knowledge, initiative, and innovation.
High brand equity
– Red Planet Indonesia Tbk has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Red Planet Indonesia Tbk to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
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.
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.
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.
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.
High bargaining power of channel partners in Hotels & Motels industry
– because of the regulatory requirements in Indonesia, Red Planet Indonesia Tbk 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 Hotels & Motels industry.
High operating costs
– Compare to the competitors, Red Planet Indonesia Tbk has high operating costs in the Hotels & Motels industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Red Planet Indonesia Tbk lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Red Planet Indonesia Tbk supply chain. Even after few cautionary changes, Red Planet Indonesia Tbk is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Red Planet Indonesia Tbk vulnerable to further global disruptions in South East Asia.
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.
Slow decision making process
– As mentioned earlier in the report, Red Planet Indonesia Tbk has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Hotels & Motels industry over the last five years. Red Planet Indonesia Tbk 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.
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.
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.
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 -
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.
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.
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.
Creating value in data economy
– The success of analytics program of Red Planet Indonesia Tbk has opened avenues for new revenue streams for the organization in Hotels & Motels industry. This can help Red Planet Indonesia Tbk to build a more holistic ecosystem for Red Planet Indonesia Tbk products in the Hotels & Motels industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Leveraging digital technologies
– Red Planet Indonesia Tbk 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Red Planet Indonesia Tbk in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Hotels & Motels industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Hotels & Motels industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Red Planet Indonesia Tbk in the Hotels & Motels industry. Now Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk to increase its market reach. Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk 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 Red Planet Indonesia Tbk to hire the very best people irrespective of their geographical location.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Red Planet Indonesia Tbk can use these opportunities to build new business models that can help the communities that Red Planet Indonesia Tbk operates in. Secondly it can use opportunities from government spending in Hotels & Motels sector.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Red Planet Indonesia Tbk has witnessed rapid integration of technology during Covid-19 in the Hotels & Motels industry. As one of the leading players in the industry, Red Planet Indonesia Tbk needs to keep up with the evolution of technology in the Hotels & Motels 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.
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.
Increasing wage structure of Red Planet Indonesia Tbk
– 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 Red Planet Indonesia Tbk.
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.
Shortening product life cycle
– it is one of the major threat that Red Planet Indonesia Tbk is facing in Hotels & Motels sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.