Multi Prima Sejahtera (LPIN) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Multi Prima Sejahtera (Indonesia)
Based on various researches at Oak Spring University , Multi Prima Sejahtera is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Multi Prima Sejahtera
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Multi Prima Sejahtera can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Multi Prima Sejahtera, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Multi Prima Sejahtera 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 Multi Prima Sejahtera can be done for the following purposes –
1. Strategic planning of Multi Prima Sejahtera
2. Improving business portfolio management of Multi Prima Sejahtera
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Multi Prima Sejahtera
Strengths of Multi Prima Sejahtera | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Multi Prima Sejahtera are -
Effective Research and Development (R&D)
– Multi Prima Sejahtera has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Multi Prima Sejahtera staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Auto & Truck Parts industry
– Multi Prima Sejahtera is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Multi Prima Sejahtera is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Multi Prima Sejahtera 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.
High brand equity
– Multi Prima Sejahtera has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Multi Prima Sejahtera to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Multi Prima Sejahtera has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Multi Prima Sejahtera 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.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Multi Prima Sejahtera has clearly differentiated products in the market place. This has enabled Multi Prima Sejahtera to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Multi Prima Sejahtera to invest into research and development (R&D) and innovation.
Learning organization
- Multi Prima Sejahtera 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 Multi Prima Sejahtera is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Multi Prima Sejahtera emphasize – knowledge, initiative, and innovation.
Ability to lead change in Auto & Truck Parts
– Multi Prima Sejahtera is one of the leading players in the Auto & Truck Parts industry in Indonesia. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in Indonesia but also across the existing markets. The ability to lead change has enabled Multi Prima Sejahtera in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Multi Prima Sejahtera 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.
Organizational Resilience of Multi Prima Sejahtera
– The covid-19 pandemic has put organizational resilience at the centre of everthing Multi Prima Sejahtera does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Multi Prima Sejahtera digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Multi Prima Sejahtera 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.
Innovation driven organization
– Multi Prima Sejahtera is one of the most innovative firm in Auto & Truck Parts sector.
Weaknesses of Multi Prima Sejahtera | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Multi Prima Sejahtera are -
Products dominated business model
– Even though Multi Prima Sejahtera has some of the most successful models in the Auto & Truck Parts industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Multi Prima Sejahtera should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Multi Prima Sejahtera is slow explore the new channels of communication. These new channels of communication can help Multi Prima Sejahtera to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Multi Prima Sejahtera, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Multi Prima Sejahtera has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Multi Prima Sejahtera, it seems that company is thinking out the frontier risks that can impact Auto & Truck Parts 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.
Increasing silos among functional specialists
– The organizational structure of Multi Prima Sejahtera is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Multi Prima Sejahtera needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Multi Prima Sejahtera to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Lack of clear differentiation of Multi Prima Sejahtera products
– To increase the profitability and margins on the products, Multi Prima Sejahtera needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Multi Prima Sejahtera needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Multi Prima Sejahtera can leverage the sales team experience to cultivate customer relationships as Multi Prima Sejahtera is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Multi Prima Sejahtera 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 Auto & Truck Parts industry using digital technology.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Multi Prima Sejahtera 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.
Employees’ less understanding of Multi Prima Sejahtera strategy
– From the outside it seems that the employees of Multi Prima Sejahtera don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Multi Prima Sejahtera has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. Multi Prima Sejahtera 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.
Multi Prima Sejahtera Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Multi Prima Sejahtera are -
Building a culture of innovation
– managers at Multi Prima Sejahtera 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 Auto & Truck Parts industry.
Leveraging digital technologies
– Multi Prima Sejahtera 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.
Using analytics as competitive advantage
– Multi Prima Sejahtera has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Multi Prima Sejahtera to build a competitive advantage using analytics. The analytics driven competitive advantage can help Multi Prima Sejahtera to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Multi Prima Sejahtera 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.
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 Multi Prima Sejahtera 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Multi Prima Sejahtera can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Multi Prima Sejahtera can use these opportunities to build new business models that can help the communities that Multi Prima Sejahtera operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Multi Prima Sejahtera is facing challenges because of the dominance of functional experts in the organization. Multi Prima Sejahtera can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Multi Prima Sejahtera can develop new processes and procedures in Auto & Truck Parts 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.
Learning at scale
– Online learning technologies has now opened space for Multi Prima Sejahtera 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Multi Prima Sejahtera in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Manufacturing automation
– Multi Prima Sejahtera can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Better consumer reach
– The expansion of the 5G network will help Multi Prima Sejahtera to increase its market reach. Multi Prima Sejahtera 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 Multi Prima Sejahtera External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Multi Prima Sejahtera are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Multi Prima Sejahtera in Auto & Truck Parts industry. The Auto & Truck Parts 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.
Shortening product life cycle
– it is one of the major threat that Multi Prima Sejahtera is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Multi Prima Sejahtera has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Multi Prima Sejahtera needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
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. Multi Prima Sejahtera 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.
Stagnating economy with rate increase
– Multi Prima Sejahtera 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 Auto & Truck Parts industry.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Multi Prima Sejahtera with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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 Multi Prima Sejahtera.
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 Multi Prima Sejahtera in the Auto & Truck Parts sector and impact the bottomline of the organization.
Regulatory challenges
– Multi Prima Sejahtera 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 Auto & Truck Parts industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Multi Prima Sejahtera may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
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.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Multi Prima Sejahtera can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Multi Prima Sejahtera Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Multi Prima Sejahtera 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 Multi Prima Sejahtera 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 Multi Prima Sejahtera 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 Multi Prima Sejahtera 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 Multi Prima Sejahtera needs to make to build a sustainable competitive advantage.