Based on various researches at Oak Spring University , Binakarya Jaya Abadi Tbk PT is operating in a macro-environment that has been destablized by – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Binakarya Jaya Abadi Tbk PT
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Binakarya Jaya Abadi Tbk PT can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Binakarya Jaya Abadi Tbk PT, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT can be done for the following purposes –
1. Strategic planning of Binakarya Jaya Abadi Tbk PT
2. Improving business portfolio management of Binakarya Jaya Abadi Tbk PT
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Binakarya Jaya Abadi Tbk PT
Strengths of Binakarya Jaya Abadi Tbk PT | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Binakarya Jaya Abadi Tbk PT are -
Learning organization
- Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Binakarya Jaya Abadi Tbk PT emphasize – knowledge, initiative, and innovation.
Analytics focus
– Binakarya Jaya Abadi Tbk PT 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 Construction Services 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 Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT in the Capital Goods sector have low bargaining power. Binakarya Jaya Abadi Tbk PT has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Binakarya Jaya Abadi Tbk PT to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Binakarya Jaya Abadi Tbk PT
– The covid-19 pandemic has put organizational resilience at the centre of everthing Binakarya Jaya Abadi Tbk PT does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Construction Services industry
– Binakarya Jaya Abadi Tbk PT is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Binakarya Jaya Abadi Tbk PT has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Binakarya Jaya Abadi Tbk PT have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Binakarya Jaya Abadi Tbk PT has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Binakarya Jaya Abadi Tbk PT to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Construction Services industry
– Binakarya Jaya Abadi Tbk PT has clearly differentiated products in the market place. This has enabled Binakarya Jaya Abadi Tbk PT to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Binakarya Jaya Abadi Tbk PT to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Binakarya Jaya Abadi Tbk PT is one of the leading players in the Construction Services 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.
High switching costs
– The high switching costs that Binakarya Jaya Abadi Tbk PT 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.
Successful track record of launching new products
– Binakarya Jaya Abadi Tbk PT has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Binakarya Jaya Abadi Tbk PT 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.
Weaknesses of Binakarya Jaya Abadi Tbk PT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Binakarya Jaya Abadi Tbk PT are -
Capital Spending Reduction
– Even during the low interest decade, Binakarya Jaya Abadi Tbk PT 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 Construction Services industry using digital technology.
Low market penetration in new markets
– Outside its home market of Indonesia, Binakarya Jaya Abadi Tbk PT needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Binakarya Jaya Abadi Tbk PT, it seems that company is thinking out the frontier risks that can impact Construction Services 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.
Employees’ less understanding of Binakarya Jaya Abadi Tbk PT strategy
– From the outside it seems that the employees of Binakarya Jaya Abadi Tbk PT 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.
Products dominated business model
– Even though Binakarya Jaya Abadi Tbk PT has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Binakarya Jaya Abadi Tbk PT should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Binakarya Jaya Abadi Tbk PT needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Binakarya Jaya Abadi Tbk PT can leverage the sales team experience to cultivate customer relationships as Binakarya Jaya Abadi Tbk PT is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Binakarya Jaya Abadi Tbk PT is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Binakarya Jaya Abadi Tbk PT 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Binakarya Jaya Abadi Tbk PT is slow explore the new channels of communication. These new channels of communication can help Binakarya Jaya Abadi Tbk PT to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Binakarya Jaya Abadi Tbk PT has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Binakarya Jaya Abadi Tbk PT 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.
Interest costs
– Compare to the competition, Binakarya Jaya Abadi Tbk PT 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.
Binakarya Jaya Abadi Tbk PT Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Binakarya Jaya Abadi Tbk PT are -
Manufacturing automation
– Binakarya Jaya Abadi Tbk PT can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Loyalty marketing
– Binakarya Jaya Abadi Tbk PT 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, Binakarya Jaya Abadi Tbk PT 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.
Building a culture of innovation
– managers at Binakarya Jaya Abadi Tbk PT 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 Construction Services industry.
Using analytics as competitive advantage
– Binakarya Jaya Abadi Tbk PT has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Binakarya Jaya Abadi Tbk PT to build a competitive advantage using analytics. The analytics driven competitive advantage can help Binakarya Jaya Abadi Tbk PT to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Binakarya Jaya Abadi Tbk PT is facing challenges because of the dominance of functional experts in the organization. Binakarya Jaya Abadi Tbk PT can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Binakarya Jaya Abadi Tbk PT to increase its market reach. Binakarya Jaya Abadi Tbk PT 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.
Leveraging digital technologies
– Binakarya Jaya Abadi Tbk PT 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.
Creating value in data economy
– The success of analytics program of Binakarya Jaya Abadi Tbk PT has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Binakarya Jaya Abadi Tbk PT to build a more holistic ecosystem for Binakarya Jaya Abadi Tbk PT products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, 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. Binakarya Jaya Abadi Tbk PT can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Binakarya Jaya Abadi Tbk PT can develop new processes and procedures in Construction Services 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.
Buying journey improvements
– Binakarya Jaya Abadi Tbk PT can improve the customer journey of consumers in the Construction Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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 Binakarya Jaya Abadi Tbk PT 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.
Threats Binakarya Jaya Abadi Tbk PT External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Binakarya Jaya Abadi Tbk PT 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. Binakarya Jaya Abadi Tbk PT 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.
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 Binakarya Jaya Abadi Tbk PT.
Shortening product life cycle
– it is one of the major threat that Binakarya Jaya Abadi Tbk PT is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Binakarya Jaya Abadi Tbk PT business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Binakarya Jaya Abadi Tbk PT may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT prominent markets.
Regulatory challenges
– Binakarya Jaya Abadi Tbk PT 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 Construction Services industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Binakarya Jaya Abadi Tbk PT in Construction Services industry. The Construction Services 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.
Technology acceleration in Forth Industrial Revolution
– Binakarya Jaya Abadi Tbk PT has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Binakarya Jaya Abadi Tbk PT needs to keep up with the evolution of technology in the Construction Services 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 Binakarya Jaya Abadi Tbk PT 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 Construction Services industry and other sectors.
Stagnating economy with rate increase
– Binakarya Jaya Abadi Tbk PT 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 Construction Services industry.
Increasing wage structure of Binakarya Jaya Abadi Tbk PT
– 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 Binakarya Jaya Abadi Tbk PT.
Weighted SWOT Analysis of Binakarya Jaya Abadi Tbk PT Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT 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 Binakarya Jaya Abadi Tbk PT needs to make to build a sustainable competitive advantage.
