SWOT Analysis / TOWS Matrix for Capitol Nusantara (Indonesia)
Based on various researches at Oak Spring University , Capitol Nusantara is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, wage bills are increasing,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of Capitol Nusantara
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Capitol Nusantara can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Capitol Nusantara, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Capitol Nusantara 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 Capitol Nusantara can be done for the following purposes –
1. Strategic planning of Capitol Nusantara
2. Improving business portfolio management of Capitol Nusantara
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Water Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Capitol Nusantara
Strengths of Capitol Nusantara | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Capitol Nusantara are -
Analytics focus
– Capitol Nusantara 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 Water Transportation 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.
Sustainable margins compare to other players in Water Transportation industry
– Capitol Nusantara has clearly differentiated products in the market place. This has enabled Capitol Nusantara to fetch slight price premium compare to the competitors in the Water Transportation industry. The sustainable margins have also helped Capitol Nusantara to invest into research and development (R&D) and innovation.
Ability to lead change in Water Transportation
– Capitol Nusantara is one of the leading players in the Water Transportation industry in Indonesia. Over the years it has not only transformed the business landscape in the Water Transportation industry in Indonesia but also across the existing markets. The ability to lead change has enabled Capitol Nusantara in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Capitol Nusantara is one of the most innovative firm in Water Transportation sector.
Learning organization
- Capitol Nusantara 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 Capitol Nusantara is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Capitol Nusantara emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Capitol Nusantara 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.
Highly skilled collaborators
– Capitol Nusantara has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Transportation industry. Secondly the value chain collaborators of Capitol Nusantara have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Capitol Nusantara has one of the best training and development program in Transportation 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.
Superior customer experience
– The customer experience strategy of Capitol Nusantara in Water Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Capitol Nusantara has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Capitol Nusantara to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Water Transportation industry
- digital transformation varies from industry to industry. For Capitol Nusantara digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Capitol Nusantara 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.
Strong track record of project management in the Water Transportation industry
– Capitol Nusantara is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Capitol Nusantara | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Capitol Nusantara are -
High bargaining power of channel partners in Water Transportation industry
– because of the regulatory requirements in Indonesia, Capitol Nusantara 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 Water Transportation industry.
High operating costs
– Compare to the competitors, Capitol Nusantara has high operating costs in the Water Transportation industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Capitol Nusantara lucrative customers.
High dependence on Capitol Nusantara ‘s star products
– The top 2 products and services of Capitol Nusantara still accounts for major business revenue. This dependence on star products in Water Transportation industry has resulted into insufficient focus on developing new products, even though Capitol Nusantara has relatively successful track record of launching new products.
Need for greater diversity
– Capitol Nusantara 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Capitol Nusantara is slow explore the new channels of communication. These new channels of communication can help Capitol Nusantara to provide better information regarding Water Transportation products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Capitol Nusantara has a high cash cycle compare to other players in the Water Transportation 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 Capitol Nusantara is dominated by functional specialists. It is not different from other players in the Water Transportation industry, but Capitol Nusantara needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Capitol Nusantara to focus more on services in the Water Transportation industry rather than just following the product oriented approach.
Lack of clear differentiation of Capitol Nusantara products
– To increase the profitability and margins on the products, Capitol Nusantara needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Capitol Nusantara 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 Water Transportation industry using digital technology.
Skills based hiring in Water Transportation industry
– The stress on hiring functional specialists at Capitol Nusantara 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.
Products dominated business model
– Even though Capitol Nusantara has some of the most successful models in the Water Transportation industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Capitol Nusantara should strive to include more intangible value offerings along with its core products and services.
Capitol Nusantara Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Capitol Nusantara are -
Using analytics as competitive advantage
– Capitol Nusantara has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Transportation sector. This continuous investment in analytics has enabled Capitol Nusantara to build a competitive advantage using analytics. The analytics driven competitive advantage can help Capitol Nusantara 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 Capitol Nusantara has opened avenues for new revenue streams for the organization in Water Transportation industry. This can help Capitol Nusantara to build a more holistic ecosystem for Capitol Nusantara products in the Water Transportation industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Capitol Nusantara can use the latest technology developments to improve its manufacturing and designing process in Water Transportation 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.
Leveraging digital technologies
– Capitol Nusantara 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Capitol Nusantara can use these opportunities to build new business models that can help the communities that Capitol Nusantara operates in. Secondly it can use opportunities from government spending in Water Transportation sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Water Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Capitol Nusantara 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. Capitol Nusantara 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Capitol Nusantara 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 Capitol Nusantara to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Capitol Nusantara 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.
Loyalty marketing
– Capitol Nusantara 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, Capitol Nusantara 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
– Capitol Nusantara can develop new processes and procedures in Water Transportation 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Water Transportation industry, but it has also influenced the consumer preferences. Capitol Nusantara can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Capitol Nusantara to increase its market reach. Capitol Nusantara 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.
Threats Capitol Nusantara External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Capitol Nusantara are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Capitol Nusantara 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 Capitol Nusantara prominent markets.
Regulatory challenges
– Capitol Nusantara 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 Water Transportation industry regulations.
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. Capitol Nusantara 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.
Environmental challenges
– Capitol Nusantara 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. Capitol Nusantara can take advantage of this fund but it will also bring new competitors in the Water Transportation industry.
Stagnating economy with rate increase
– Capitol Nusantara 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 Water Transportation industry.
Consumer confidence and its impact on Capitol Nusantara 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 Water Transportation industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Capitol Nusantara is facing in Water Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Capitol Nusantara
– 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 Capitol Nusantara.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Capitol Nusantara in Water Transportation industry. The Water Transportation 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.
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 Capitol Nusantara.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Transportation industry are lowering. It can presents Capitol Nusantara with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Transportation sector.
Technology acceleration in Forth Industrial Revolution
– Capitol Nusantara has witnessed rapid integration of technology during Covid-19 in the Water Transportation industry. As one of the leading players in the industry, Capitol Nusantara needs to keep up with the evolution of technology in the Water Transportation 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.
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. Capitol Nusantara needs to understand the core reasons impacting the Water Transportation industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Capitol Nusantara Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Capitol Nusantara 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 Capitol Nusantara 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 Capitol Nusantara 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 Capitol Nusantara 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 Capitol Nusantara needs to make to build a sustainable competitive advantage.