SWOT Analysis / TOWS Matrix for Pelangi Indah Canindo (Indonesia)
Based on various researches at Oak Spring University , Pelangi Indah Canindo is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Pelangi Indah Canindo
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pelangi Indah Canindo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pelangi Indah Canindo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pelangi Indah Canindo 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 Pelangi Indah Canindo can be done for the following purposes –
1. Strategic planning of Pelangi Indah Canindo
2. Improving business portfolio management of Pelangi Indah Canindo
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pelangi Indah Canindo
Strengths of Pelangi Indah Canindo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pelangi Indah Canindo are -
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Pelangi Indah Canindo has clearly differentiated products in the market place. This has enabled Pelangi Indah Canindo to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Pelangi Indah Canindo to invest into research and development (R&D) and innovation.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Pelangi Indah Canindo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pelangi Indah Canindo 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.
Ability to lead change in Misc. Fabricated Products
– Pelangi Indah Canindo is one of the leading players in the Misc. Fabricated Products industry in Indonesia. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in Indonesia but also across the existing markets. The ability to lead change has enabled Pelangi Indah Canindo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Pelangi Indah Canindo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pelangi Indah Canindo 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.
Ability to recruit top talent
– Pelangi Indah Canindo is one of the leading players in the Misc. Fabricated Products 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
- Pelangi Indah Canindo 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 Pelangi Indah Canindo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pelangi Indah Canindo emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Pelangi Indah Canindo is one of the most innovative firm in Misc. Fabricated Products sector.
Operational resilience
– The operational resilience strategy of Pelangi Indah Canindo comprises – understanding the underlying the factors in the Misc. Fabricated Products industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management in the Misc. Fabricated Products industry
– Pelangi Indah Canindo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Pelangi Indah Canindo 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.
High brand equity
– Pelangi Indah Canindo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pelangi Indah Canindo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Pelangi Indah Canindo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Pelangi Indah Canindo staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Pelangi Indah Canindo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pelangi Indah Canindo are -
Need for greater diversity
– Pelangi Indah Canindo 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.
Lack of clear differentiation of Pelangi Indah Canindo products
– To increase the profitability and margins on the products, Pelangi Indah Canindo needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Indonesia, Pelangi Indah Canindo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at Pelangi Indah Canindo has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Interest costs
– Compare to the competition, Pelangi Indah Canindo 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.
Slow to strategic competitive environment developments
– As Pelangi Indah Canindo is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
Products dominated business model
– Even though Pelangi Indah Canindo has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Pelangi Indah Canindo should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Pelangi Indah Canindo is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Pelangi Indah Canindo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pelangi Indah Canindo to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Pelangi Indah Canindo has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pelangi Indah Canindo lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Pelangi Indah Canindo, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Pelangi Indah Canindo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Pelangi Indah Canindo supply chain. Even after few cautionary changes, Pelangi Indah Canindo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pelangi Indah Canindo vulnerable to further global disruptions in South East Asia.
Pelangi Indah Canindo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pelangi Indah Canindo are -
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Pelangi Indah Canindo in the Misc. Fabricated Products industry. Now Pelangi Indah Canindo can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pelangi Indah Canindo 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
– Pelangi Indah Canindo 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pelangi Indah Canindo 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pelangi Indah Canindo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pelangi Indah Canindo 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. Pelangi Indah Canindo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pelangi Indah Canindo can use these opportunities to build new business models that can help the communities that Pelangi Indah Canindo operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pelangi Indah Canindo is facing challenges because of the dominance of functional experts in the organization. Pelangi Indah Canindo can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. Pelangi Indah Canindo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Pelangi Indah Canindo has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Pelangi Indah Canindo to build a more holistic ecosystem for Pelangi Indah Canindo products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Pelangi Indah Canindo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pelangi Indah Canindo 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 Pelangi Indah Canindo to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Pelangi Indah Canindo 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.
Threats Pelangi Indah Canindo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pelangi Indah Canindo are -
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. Pelangi Indah Canindo 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.
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.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pelangi Indah Canindo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology acceleration in Forth Industrial Revolution
– Pelangi Indah Canindo has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Pelangi Indah Canindo needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Stagnating economy with rate increase
– Pelangi Indah Canindo 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 Misc. Fabricated Products industry.
Increasing wage structure of Pelangi Indah Canindo
– 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 Pelangi Indah Canindo.
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 Pelangi Indah Canindo in the Misc. Fabricated Products sector and impact the bottomline of the organization.
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. Pelangi Indah Canindo needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Environmental challenges
– Pelangi Indah Canindo 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. Pelangi Indah Canindo can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pelangi Indah Canindo in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Pelangi Indah Canindo 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 Pelangi Indah Canindo prominent markets.
High dependence on third party suppliers
– Pelangi Indah Canindo 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.
Weighted SWOT Analysis of Pelangi Indah Canindo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pelangi Indah Canindo 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 Pelangi Indah Canindo 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 Pelangi Indah Canindo 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 Pelangi Indah Canindo 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 Pelangi Indah Canindo needs to make to build a sustainable competitive advantage.