SWOT Analysis / TOWS Matrix for Kertas Basuki Rachmat (Indonesia)
Based on various researches at Oak Spring University , Kertas Basuki Rachmat is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Kertas Basuki Rachmat
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kertas Basuki Rachmat can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kertas Basuki Rachmat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kertas Basuki Rachmat 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 Kertas Basuki Rachmat can be done for the following purposes –
1. Strategic planning of Kertas Basuki Rachmat
2. Improving business portfolio management of Kertas Basuki Rachmat
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kertas Basuki Rachmat
Strengths of Kertas Basuki Rachmat | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kertas Basuki Rachmat are -
Innovation driven organization
– Kertas Basuki Rachmat is one of the most innovative firm in Retail (Specialty) sector.
Diverse revenue streams
– Kertas Basuki Rachmat is present in almost all the verticals within the Retail (Specialty) industry. This has provided Kertas Basuki Rachmat 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
- Kertas Basuki Rachmat 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 Kertas Basuki Rachmat is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kertas Basuki Rachmat emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Kertas Basuki Rachmat has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kertas Basuki Rachmat staying ahead in the Retail (Specialty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Kertas Basuki Rachmat in the Services sector have low bargaining power. Kertas Basuki Rachmat has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kertas Basuki Rachmat to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Retail (Specialty) industry
– Kertas Basuki Rachmat is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Kertas Basuki Rachmat 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.
Successful track record of launching new products
– Kertas Basuki Rachmat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kertas Basuki Rachmat 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.
Superior customer experience
– The customer experience strategy of Kertas Basuki Rachmat in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Kertas Basuki Rachmat 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.
Highly skilled collaborators
– Kertas Basuki Rachmat has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Specialty) industry. Secondly the value chain collaborators of Kertas Basuki Rachmat have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Kertas Basuki Rachmat is one of the leading players in the Retail (Specialty) industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses of Kertas Basuki Rachmat | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kertas Basuki Rachmat are -
Slow to strategic competitive environment developments
– As Kertas Basuki Rachmat is one of the leading players in the Retail (Specialty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Specialty) industry in last five years.
Interest costs
– Compare to the competition, Kertas Basuki Rachmat 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.
Employees’ less understanding of Kertas Basuki Rachmat strategy
– From the outside it seems that the employees of Kertas Basuki Rachmat 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.
Workers concerns about automation
– As automation is fast increasing in the Retail (Specialty) industry, Kertas Basuki Rachmat 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.
High bargaining power of channel partners in Retail (Specialty) industry
– because of the regulatory requirements in Indonesia, Kertas Basuki Rachmat 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 Retail (Specialty) industry.
High dependence on Kertas Basuki Rachmat ‘s star products
– The top 2 products and services of Kertas Basuki Rachmat still accounts for major business revenue. This dependence on star products in Retail (Specialty) industry has resulted into insufficient focus on developing new products, even though Kertas Basuki Rachmat has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Kertas Basuki Rachmat is just above the Retail (Specialty) 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.
Lack of clear differentiation of Kertas Basuki Rachmat products
– To increase the profitability and margins on the products, Kertas Basuki Rachmat needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Kertas Basuki Rachmat has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Specialty) industry over the last five years. Kertas Basuki Rachmat even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kertas Basuki Rachmat is slow explore the new channels of communication. These new channels of communication can help Kertas Basuki Rachmat to provide better information regarding Retail (Specialty) products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Kertas Basuki Rachmat needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Specialty) industry have deep experience in developing customer relationships. Marketing department at Kertas Basuki Rachmat can leverage the sales team experience to cultivate customer relationships as Kertas Basuki Rachmat is planning to shift buying processes online.
Kertas Basuki Rachmat Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kertas Basuki Rachmat are -
Building a culture of innovation
– managers at Kertas Basuki Rachmat 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 Retail (Specialty) industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kertas Basuki Rachmat 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 Kertas Basuki Rachmat to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Kertas Basuki Rachmat to increase its market reach. Kertas Basuki Rachmat 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.
Learning at scale
– Online learning technologies has now opened space for Kertas Basuki Rachmat 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.
Creating value in data economy
– The success of analytics program of Kertas Basuki Rachmat has opened avenues for new revenue streams for the organization in Retail (Specialty) industry. This can help Kertas Basuki Rachmat to build a more holistic ecosystem for Kertas Basuki Rachmat products in the Retail (Specialty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Kertas Basuki Rachmat can develop new processes and procedures in Retail (Specialty) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kertas Basuki Rachmat in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Specialty) 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 Retail (Specialty) industry, but it has also influenced the consumer preferences. Kertas Basuki Rachmat 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, Kertas Basuki Rachmat is facing challenges because of the dominance of functional experts in the organization. Kertas Basuki Rachmat can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Kertas Basuki Rachmat has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Using analytics as competitive advantage
– Kertas Basuki Rachmat has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Specialty) sector. This continuous investment in analytics has enabled Kertas Basuki Rachmat to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kertas Basuki Rachmat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Specialty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kertas Basuki Rachmat 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. Kertas Basuki Rachmat 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.
Buying journey improvements
– Kertas Basuki Rachmat can improve the customer journey of consumers in the Retail (Specialty) 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.
Threats Kertas Basuki Rachmat External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kertas Basuki Rachmat are -
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.
Shortening product life cycle
– it is one of the major threat that Kertas Basuki Rachmat is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents Kertas Basuki Rachmat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.
Increasing wage structure of Kertas Basuki Rachmat
– 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 Kertas Basuki Rachmat.
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. Kertas Basuki Rachmat 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.
Easy access to finance
– Easy access to finance in Retail (Specialty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kertas Basuki Rachmat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Kertas Basuki Rachmat business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Kertas Basuki Rachmat 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 Retail (Specialty) industry and other sectors.
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. Kertas Basuki Rachmat needs to understand the core reasons impacting the Retail (Specialty) industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Kertas Basuki Rachmat 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 Retail (Specialty) industry.
Technology acceleration in Forth Industrial Revolution
– Kertas Basuki Rachmat has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, Kertas Basuki Rachmat needs to keep up with the evolution of technology in the Retail (Specialty) 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.
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 Kertas Basuki Rachmat.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kertas Basuki Rachmat 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 Kertas Basuki Rachmat prominent markets.
Weighted SWOT Analysis of Kertas Basuki Rachmat Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kertas Basuki Rachmat 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 Kertas Basuki Rachmat 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 Kertas Basuki Rachmat 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 Kertas Basuki Rachmat 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 Kertas Basuki Rachmat needs to make to build a sustainable competitive advantage.
