SWOT Analysis / TOWS Matrix for Saranacentral Bajatama (Indonesia)
Based on various researches at Oak Spring University , Saranacentral Bajatama is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, there is backlash against globalization, technology disruption,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
Introduction to SWOT Analysis of Saranacentral Bajatama
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Saranacentral Bajatama can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Saranacentral Bajatama, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Saranacentral Bajatama 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 Saranacentral Bajatama can be done for the following purposes –
1. Strategic planning of Saranacentral Bajatama
2. Improving business portfolio management of Saranacentral Bajatama
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Saranacentral Bajatama
Strengths of Saranacentral Bajatama | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Saranacentral Bajatama are -
Diverse revenue streams
– Saranacentral Bajatama is present in almost all the verticals within the Iron & Steel industry. This has provided Saranacentral Bajatama 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.
Sustainable margins compare to other players in Iron & Steel industry
– Saranacentral Bajatama has clearly differentiated products in the market place. This has enabled Saranacentral Bajatama to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped Saranacentral Bajatama to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Saranacentral Bajatama has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Saranacentral Bajatama staying ahead in the Iron & Steel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Saranacentral Bajatama in Iron & Steel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Iron & Steel industry
– Saranacentral Bajatama is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Saranacentral Bajatama is one of the most innovative firm in Iron & Steel sector.
Analytics focus
– Saranacentral Bajatama 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 Iron & Steel 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.
Digital Transformation in Iron & Steel industry
- digital transformation varies from industry to industry. For Saranacentral Bajatama digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Saranacentral Bajatama 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.
High brand equity
– Saranacentral Bajatama has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Saranacentral Bajatama to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Saranacentral Bajatama
– The covid-19 pandemic has put organizational resilience at the centre of everthing Saranacentral Bajatama does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Saranacentral Bajatama 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.
Low bargaining power of suppliers
– Suppliers of Saranacentral Bajatama in the Basic Materials sector have low bargaining power. Saranacentral Bajatama has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Saranacentral Bajatama to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Saranacentral Bajatama | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Saranacentral Bajatama are -
High bargaining power of channel partners in Iron & Steel industry
– because of the regulatory requirements in Indonesia, Saranacentral Bajatama 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 Iron & Steel industry.
Increasing silos among functional specialists
– The organizational structure of Saranacentral Bajatama is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but Saranacentral Bajatama needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Saranacentral Bajatama to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Saranacentral Bajatama is one of the leading players in the Iron & Steel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Iron & Steel industry in last five years.
Lack of clear differentiation of Saranacentral Bajatama products
– To increase the profitability and margins on the products, Saranacentral Bajatama needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Saranacentral Bajatama is just above the Iron & Steel 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.
Aligning sales with marketing
– From the outside it seems that Saranacentral Bajatama needs to have more collaboration between its sales team and marketing team. Sales professionals in the Iron & Steel industry have deep experience in developing customer relationships. Marketing department at Saranacentral Bajatama can leverage the sales team experience to cultivate customer relationships as Saranacentral Bajatama is planning to shift buying processes online.
Products dominated business model
– Even though Saranacentral Bajatama has some of the most successful models in the Iron & Steel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Saranacentral Bajatama should strive to include more intangible value offerings along with its core products and services.
High dependence on Saranacentral Bajatama ‘s star products
– The top 2 products and services of Saranacentral Bajatama still accounts for major business revenue. This dependence on star products in Iron & Steel industry has resulted into insufficient focus on developing new products, even though Saranacentral Bajatama has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Indonesia, Saranacentral Bajatama needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Saranacentral Bajatama has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. Saranacentral Bajatama 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.
Ability to respond to the competition
– As the decision making is very deliberative at Saranacentral Bajatama, in the dynamic environment of Iron & Steel industry it has struggled to respond to the nimble upstart competition. Saranacentral Bajatama has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Saranacentral Bajatama Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Saranacentral Bajatama are -
Loyalty marketing
– Saranacentral Bajatama 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.
Learning at scale
– Online learning technologies has now opened space for Saranacentral Bajatama 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Saranacentral Bajatama 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.
Buying journey improvements
– Saranacentral Bajatama can improve the customer journey of consumers in the Iron & Steel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Saranacentral Bajatama can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Saranacentral Bajatama to increase its market reach. Saranacentral Bajatama 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.
Using analytics as competitive advantage
– Saranacentral Bajatama has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled Saranacentral Bajatama to build a competitive advantage using analytics. The analytics driven competitive advantage can help Saranacentral Bajatama to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Saranacentral Bajatama has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help Saranacentral Bajatama to build a more holistic ecosystem for Saranacentral Bajatama products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Saranacentral Bajatama 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 Saranacentral Bajatama to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Iron & Steel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Saranacentral Bajatama in the Iron & Steel industry. Now Saranacentral Bajatama can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. Saranacentral Bajatama can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Saranacentral Bajatama in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Saranacentral Bajatama 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 Saranacentral Bajatama to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Saranacentral Bajatama External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Saranacentral Bajatama are -
Regulatory challenges
– Saranacentral Bajatama 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 Iron & Steel industry regulations.
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.
Increasing wage structure of Saranacentral Bajatama
– 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 Saranacentral Bajatama.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Saranacentral Bajatama 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 Saranacentral Bajatama prominent markets.
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 Saranacentral Bajatama.
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.
Stagnating economy with rate increase
– Saranacentral Bajatama 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 Iron & Steel industry.
Easy access to finance
– Easy access to finance in Iron & Steel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Saranacentral Bajatama can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Saranacentral Bajatama 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 Iron & Steel 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. Saranacentral Bajatama needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Saranacentral Bajatama 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.
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 Saranacentral Bajatama business can come under increasing regulations regarding data privacy, data security, etc.
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. Saranacentral Bajatama 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.
Weighted SWOT Analysis of Saranacentral Bajatama Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Saranacentral Bajatama 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 Saranacentral Bajatama 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 Saranacentral Bajatama 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 Saranacentral Bajatama 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 Saranacentral Bajatama needs to make to build a sustainable competitive advantage.
