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 government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing,
technology disruption, increasing commodity prices, 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 -
Diverse revenue streams
– Binakarya Jaya Abadi Tbk PT is present in almost all the verticals within the Construction Services industry. This has provided Binakarya Jaya Abadi Tbk PT 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 Construction Services industry
- digital transformation varies from industry to industry. For Binakarya Jaya Abadi Tbk PT digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Binakarya Jaya Abadi Tbk PT 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.
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.
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.
Training and development
– Binakarya Jaya Abadi Tbk PT has one of the best training and development program in Capital Goods 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.
Innovation driven organization
– Binakarya Jaya Abadi Tbk PT is one of the most innovative firm in Construction Services sector.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Binakarya Jaya Abadi Tbk PT has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Binakarya Jaya Abadi Tbk PT staying ahead in the Construction Services 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 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.
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 -
High cash cycle compare to competitors
Binakarya Jaya Abadi Tbk PT has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Binakarya Jaya Abadi Tbk PT supply chain. Even after few cautionary changes, Binakarya Jaya Abadi Tbk PT is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Binakarya Jaya Abadi Tbk PT vulnerable to further global disruptions in South East Asia.
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.
High operating costs
– Compare to the competitors, Binakarya Jaya Abadi Tbk PT has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Binakarya Jaya Abadi Tbk PT lucrative customers.
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.
Increasing silos among functional specialists
– The organizational structure of Binakarya Jaya Abadi Tbk PT is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Binakarya Jaya Abadi Tbk PT needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Binakarya Jaya Abadi Tbk PT to focus more on services in the Construction Services industry rather than just following the product oriented approach.
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.
Need for greater diversity
– Binakarya Jaya Abadi Tbk PT 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.
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.
Compensation and incentives
– The revenue per employee of Binakarya Jaya Abadi Tbk PT is just above the Construction Services industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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 -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Binakarya Jaya Abadi Tbk PT can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Binakarya Jaya Abadi Tbk PT in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Binakarya Jaya Abadi Tbk PT 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Binakarya Jaya Abadi Tbk PT 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. Binakarya Jaya Abadi Tbk PT 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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Binakarya Jaya Abadi Tbk PT can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of 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.
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 -
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.
High dependence on third party suppliers
– Binakarya Jaya Abadi Tbk PT 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.
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.
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.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Binakarya Jaya Abadi Tbk PT can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Binakarya Jaya Abadi Tbk PT with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
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. Binakarya Jaya Abadi Tbk PT needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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.
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.
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.