SWOT Analysis / TOWS Matrix for Renuka Coalindo (Indonesia)
Based on various researches at Oak Spring University , Renuka Coalindo is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing energy prices, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Renuka Coalindo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Renuka Coalindo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Renuka Coalindo 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 Renuka Coalindo can be done for the following purposes –
1. Strategic planning of Renuka Coalindo
2. Improving business portfolio management of Renuka Coalindo
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Renuka Coalindo
Strengths of Renuka Coalindo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Renuka Coalindo are -
Successful track record of launching new products
– Renuka Coalindo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Renuka Coalindo 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.
Sustainable margins compare to other players in Coal industry
– Renuka Coalindo has clearly differentiated products in the market place. This has enabled Renuka Coalindo to fetch slight price premium compare to the competitors in the Coal industry. The sustainable margins have also helped Renuka Coalindo to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Renuka Coalindo in the Energy sector have low bargaining power. Renuka Coalindo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Renuka Coalindo to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Renuka Coalindo is one of the leading players in the Coal 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.
Effective Research and Development (R&D)
– Renuka Coalindo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Renuka Coalindo staying ahead in the Coal industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Renuka Coalindo
– The covid-19 pandemic has put organizational resilience at the centre of everthing Renuka Coalindo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Renuka Coalindo has one of the best training and development program in Energy 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.
Diverse revenue streams
– Renuka Coalindo is present in almost all the verticals within the Coal industry. This has provided Renuka Coalindo 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
– Renuka Coalindo is one of the most innovative firm in Coal sector.
Superior customer experience
– The customer experience strategy of Renuka Coalindo in Coal industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Renuka Coalindo 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 Coal 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.
High brand equity
– Renuka Coalindo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Renuka Coalindo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Renuka Coalindo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Renuka Coalindo are -
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 Renuka Coalindo supply chain. Even after few cautionary changes, Renuka Coalindo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Renuka Coalindo vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Renuka Coalindo has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Renuka Coalindo should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Renuka Coalindo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. Renuka Coalindo 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.
No frontier risks strategy
– From the 10K / annual statement of Renuka Coalindo, it seems that company is thinking out the frontier risks that can impact Coal industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Renuka Coalindo 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 Coal industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Renuka Coalindo, in the dynamic environment of Coal industry it has struggled to respond to the nimble upstart competition. Renuka Coalindo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Renuka Coalindo needs to have more collaboration between its sales team and marketing team. Sales professionals in the Coal industry have deep experience in developing customer relationships. Marketing department at Renuka Coalindo can leverage the sales team experience to cultivate customer relationships as Renuka Coalindo is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Coal industry, Renuka Coalindo 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.
Increasing silos among functional specialists
– The organizational structure of Renuka Coalindo is dominated by functional specialists. It is not different from other players in the Coal industry, but Renuka Coalindo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Renuka Coalindo to focus more on services in the Coal industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Renuka Coalindo is slow explore the new channels of communication. These new channels of communication can help Renuka Coalindo to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Renuka Coalindo 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.
Renuka Coalindo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Renuka Coalindo are -
Developing new processes and practices
– Renuka Coalindo can develop new processes and procedures in Coal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Renuka Coalindo can use these opportunities to build new business models that can help the communities that Renuka Coalindo operates in. Secondly it can use opportunities from government spending in Coal sector.
Using analytics as competitive advantage
– Renuka Coalindo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled Renuka Coalindo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Renuka Coalindo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Renuka Coalindo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Renuka Coalindo 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.
Leveraging digital technologies
– Renuka Coalindo 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Renuka Coalindo 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. Renuka Coalindo 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.
Manufacturing automation
– Renuka Coalindo can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Coal industry, but it has also influenced the consumer preferences. Renuka Coalindo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Renuka Coalindo has opened avenues for new revenue streams for the organization in Coal industry. This can help Renuka Coalindo to build a more holistic ecosystem for Renuka Coalindo products in the Coal industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Renuka Coalindo 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 Coal industry.
Learning at scale
– Online learning technologies has now opened space for Renuka Coalindo 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, Renuka Coalindo 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.
Threats Renuka Coalindo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Renuka Coalindo are -
Increasing wage structure of Renuka Coalindo
– 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 Renuka Coalindo.
Regulatory challenges
– Renuka Coalindo 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 Coal industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Renuka Coalindo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Renuka Coalindo in Coal industry. The Coal 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.
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. Renuka Coalindo 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.
High dependence on third party suppliers
– Renuka Coalindo 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Renuka Coalindo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
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 Renuka Coalindo in the Coal sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Renuka Coalindo 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 Coal industry.
Technology acceleration in Forth Industrial Revolution
– Renuka Coalindo has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, Renuka Coalindo needs to keep up with the evolution of technology in the Coal 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 Renuka Coalindo 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 Coal industry and other sectors.
Environmental challenges
– Renuka Coalindo 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. Renuka Coalindo can take advantage of this fund but it will also bring new competitors in the Coal industry.
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.
Weighted SWOT Analysis of Renuka Coalindo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Renuka Coalindo 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 Renuka Coalindo 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 Renuka Coalindo 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 Renuka Coalindo 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 Renuka Coalindo needs to make to build a sustainable competitive advantage.