Ancora Indonesia (OKAS) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Ancora Indonesia (Indonesia)
Based on various researches at Oak Spring University , Ancora Indonesia is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, geopolitical disruptions, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ancora Indonesia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ancora Indonesia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ancora Indonesia 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 Ancora Indonesia can be done for the following purposes –
1. Strategic planning of Ancora Indonesia
2. Improving business portfolio management of Ancora Indonesia
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ancora Indonesia
Strengths of Ancora Indonesia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ancora Indonesia are -
Diverse revenue streams
– Ancora Indonesia is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Ancora Indonesia 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.
Innovation driven organization
– Ancora Indonesia is one of the most innovative firm in Chemical Manufacturing sector.
Analytics focus
– Ancora Indonesia 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 Chemical Manufacturing 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.
Learning organization
- Ancora Indonesia 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 Ancora Indonesia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ancora Indonesia emphasize – knowledge, initiative, and innovation.
Ability to lead change in Chemical Manufacturing
– Ancora Indonesia is one of the leading players in the Chemical Manufacturing industry in Indonesia. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in Indonesia but also across the existing markets. The ability to lead change has enabled Ancora Indonesia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Ancora Indonesia in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Ancora Indonesia in the Basic Materials sector have low bargaining power. Ancora Indonesia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ancora Indonesia to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Ancora Indonesia has one of the best training and development program in Basic Materials 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.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Ancora Indonesia has clearly differentiated products in the market place. This has enabled Ancora Indonesia to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Ancora Indonesia to invest into research and development (R&D) and innovation.
High brand equity
– Ancora Indonesia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ancora Indonesia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Ancora Indonesia is one of the leading players in the Chemical Manufacturing 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.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Ancora Indonesia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ancora Indonesia 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.
Weaknesses of Ancora Indonesia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ancora Indonesia are -
High cash cycle compare to competitors
Ancora Indonesia has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Chemical Manufacturing industry
– because of the regulatory requirements in Indonesia, Ancora Indonesia 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 Chemical Manufacturing industry.
Slow decision making process
– As mentioned earlier in the report, Ancora Indonesia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Ancora Indonesia 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.
Low market penetration in new markets
– Outside its home market of Indonesia, Ancora Indonesia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ancora Indonesia is slow explore the new channels of communication. These new channels of communication can help Ancora Indonesia to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Ancora Indonesia has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ancora Indonesia should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Ancora Indonesia is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Ancora Indonesia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ancora Indonesia to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Ancora Indonesia has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ancora Indonesia lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Ancora Indonesia, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Ancora Indonesia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Ancora Indonesia is just above the Chemical Manufacturing 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.
Workers concerns about automation
– As automation is fast increasing in the Chemical Manufacturing industry, Ancora Indonesia 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.
Ancora Indonesia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ancora Indonesia are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ancora Indonesia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ancora Indonesia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemical Manufacturing industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ancora Indonesia 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 Ancora Indonesia to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ancora Indonesia 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Ancora Indonesia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Ancora Indonesia can develop new processes and procedures in Chemical Manufacturing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ancora Indonesia 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 Ancora Indonesia to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Ancora Indonesia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Ancora Indonesia to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ancora Indonesia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Ancora Indonesia 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.
Buying journey improvements
– Ancora Indonesia can improve the customer journey of consumers in the Chemical Manufacturing 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 Ancora Indonesia to increase its market reach. Ancora Indonesia 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.
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 Ancora Indonesia 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.
Creating value in data economy
– The success of analytics program of Ancora Indonesia has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Ancora Indonesia to build a more holistic ecosystem for Ancora Indonesia products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Ancora Indonesia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ancora Indonesia are -
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 Ancora Indonesia in the Chemical Manufacturing sector and impact the bottomline of the organization.
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. Ancora Indonesia 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.
Shortening product life cycle
– it is one of the major threat that Ancora Indonesia is facing in Chemical Manufacturing 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 Chemical Manufacturing industry are lowering. It can presents Ancora Indonesia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
Environmental challenges
– Ancora Indonesia 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. Ancora Indonesia can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ancora Indonesia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
High dependence on third party suppliers
– Ancora Indonesia 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.
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.
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 Ancora Indonesia 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, Ancora Indonesia 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 Ancora Indonesia prominent markets.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ancora Indonesia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Consumer confidence and its impact on Ancora Indonesia 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 Chemical Manufacturing industry and other sectors.
Weighted SWOT Analysis of Ancora Indonesia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ancora Indonesia 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 Ancora Indonesia 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 Ancora Indonesia 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 Ancora Indonesia 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 Ancora Indonesia needs to make to build a sustainable competitive advantage.