SWOT Analysis / TOWS Matrix for Betonjaya Manunggal (Indonesia)
Based on various researches at Oak Spring University , Betonjaya Manunggal is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Betonjaya Manunggal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Betonjaya Manunggal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Betonjaya Manunggal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Betonjaya Manunggal 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 Betonjaya Manunggal can be done for the following purposes –
1. Strategic planning of Betonjaya Manunggal
2. Improving business portfolio management of Betonjaya Manunggal
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 Betonjaya Manunggal
Strengths of Betonjaya Manunggal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Betonjaya Manunggal are -
Diverse revenue streams
– Betonjaya Manunggal is present in almost all the verticals within the Iron & Steel industry. This has provided Betonjaya Manunggal 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.
Digital Transformation in Iron & Steel industry
- digital transformation varies from industry to industry. For Betonjaya Manunggal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Betonjaya Manunggal 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.
Organizational Resilience of Betonjaya Manunggal
– The covid-19 pandemic has put organizational resilience at the centre of everthing Betonjaya Manunggal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Betonjaya Manunggal 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.
Cross disciplinary teams
– Horizontal connected teams at the Betonjaya Manunggal 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.
Low bargaining power of suppliers
– Suppliers of Betonjaya Manunggal in the Basic Materials sector have low bargaining power. Betonjaya Manunggal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Betonjaya Manunggal to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Betonjaya Manunggal has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of Betonjaya Manunggal have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Betonjaya Manunggal has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Betonjaya Manunggal 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.
Sustainable margins compare to other players in Iron & Steel industry
– Betonjaya Manunggal has clearly differentiated products in the market place. This has enabled Betonjaya Manunggal to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped Betonjaya Manunggal to invest into research and development (R&D) and innovation.
High brand equity
– Betonjaya Manunggal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Betonjaya Manunggal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Betonjaya Manunggal is one of the leading players in the Iron & Steel 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.
Learning organization
- Betonjaya Manunggal 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 Betonjaya Manunggal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Betonjaya Manunggal emphasize – knowledge, initiative, and innovation.
Weaknesses of Betonjaya Manunggal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Betonjaya Manunggal are -
High cash cycle compare to competitors
Betonjaya Manunggal has a high cash cycle compare to other players in the Iron & Steel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Betonjaya Manunggal is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but Betonjaya Manunggal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Betonjaya Manunggal to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.
Employees’ less understanding of Betonjaya Manunggal strategy
– From the outside it seems that the employees of Betonjaya Manunggal 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.
Slow decision making process
– As mentioned earlier in the report, Betonjaya Manunggal 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. Betonjaya Manunggal 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, Betonjaya Manunggal is slow explore the new channels of communication. These new channels of communication can help Betonjaya Manunggal to provide better information regarding Iron & Steel products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Betonjaya Manunggal 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.
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 Betonjaya Manunggal supply chain. Even after few cautionary changes, Betonjaya Manunggal is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Betonjaya Manunggal vulnerable to further global disruptions in South East Asia.
High dependence on Betonjaya Manunggal ‘s star products
– The top 2 products and services of Betonjaya Manunggal 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 Betonjaya Manunggal has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Betonjaya Manunggal has high operating costs in the Iron & Steel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Betonjaya Manunggal lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Betonjaya Manunggal 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 Iron & Steel industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Betonjaya Manunggal 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 Betonjaya Manunggal can leverage the sales team experience to cultivate customer relationships as Betonjaya Manunggal is planning to shift buying processes online.
Betonjaya Manunggal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Betonjaya Manunggal are -
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 Betonjaya Manunggal 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Betonjaya Manunggal is facing challenges because of the dominance of functional experts in the organization. Betonjaya Manunggal can utilize new technology in the field of Iron & Steel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Betonjaya Manunggal 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.
Leveraging digital technologies
– Betonjaya Manunggal 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.
Loyalty marketing
– Betonjaya Manunggal 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.
Better consumer reach
– The expansion of the 5G network will help Betonjaya Manunggal to increase its market reach. Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Betonjaya Manunggal has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help Betonjaya Manunggal to build a more holistic ecosystem for Betonjaya Manunggal products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Betonjaya Manunggal in the Iron & Steel industry. Now Betonjaya Manunggal can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Betonjaya Manunggal 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.
Developing new processes and practices
– Betonjaya Manunggal can develop new processes and procedures in Iron & Steel 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.
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. Betonjaya Manunggal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Betonjaya Manunggal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Betonjaya Manunggal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Betonjaya Manunggal are -
High dependence on third party suppliers
– Betonjaya Manunggal 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Betonjaya Manunggal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Iron & Steel sector.
Environmental challenges
– Betonjaya Manunggal 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. Betonjaya Manunggal can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.
Shortening product life cycle
– it is one of the major threat that Betonjaya Manunggal is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Betonjaya Manunggal.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Iron & Steel industry are lowering. It can presents Betonjaya Manunggal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Iron & Steel sector.
Regulatory challenges
– Betonjaya Manunggal 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.
Increasing wage structure of Betonjaya Manunggal
– 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 Betonjaya Manunggal.
Consumer confidence and its impact on Betonjaya Manunggal 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.
Stagnating economy with rate increase
– Betonjaya Manunggal 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Betonjaya Manunggal 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 Betonjaya Manunggal prominent markets.
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. Betonjaya Manunggal 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.
Weighted SWOT Analysis of Betonjaya Manunggal Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal needs to make to build a sustainable competitive advantage.
