Mustika Ratu (MRAT) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Mustika Ratu (Indonesia)

Based on various researches at Oak Spring University , Mustika Ratu is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, technology disruption, etc

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Introduction to SWOT Analysis of Mustika Ratu

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mustika Ratu can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mustika Ratu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mustika Ratu 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Mustika Ratu can be done for the following purposes –
1. Strategic planning of Mustika Ratu
2. Improving business portfolio management of Mustika Ratu
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mustika Ratu

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Strengths of Mustika Ratu | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Mustika Ratu are -

Effective Research and Development (R&D)

– Mustika Ratu has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mustika Ratu staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to recruit top talent

– Mustika Ratu is one of the leading players in the Major Drugs 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.

Cross disciplinary teams

– Horizontal connected teams at the Mustika Ratu 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.

Sustainable margins compare to other players in Major Drugs industry

– Mustika Ratu has clearly differentiated products in the market place. This has enabled Mustika Ratu to fetch slight price premium compare to the competitors in the Major Drugs industry. The sustainable margins have also helped Mustika Ratu to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of Mustika Ratu in Major Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Major Drugs industry

- digital transformation varies from industry to industry. For Mustika Ratu digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mustika Ratu has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

Ability to lead change in Major Drugs

– Mustika Ratu is one of the leading players in the Major Drugs industry in Indonesia. Over the years it has not only transformed the business landscape in the Major Drugs industry in Indonesia but also across the existing markets. The ability to lead change has enabled Mustika Ratu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of Mustika Ratu

– The covid-19 pandemic has put organizational resilience at the centre of everthing Mustika Ratu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Highly skilled collaborators

– Mustika Ratu has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Major Drugs industry. Secondly the value chain collaborators of Mustika Ratu have helped the firm to develop new products and bring them quickly to the marketplace.

High switching costs

– The high switching costs that Mustika Ratu 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.

Low bargaining power of suppliers

– Suppliers of Mustika Ratu in the Healthcare sector have low bargaining power. Mustika Ratu has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mustika Ratu to manage not only supply disruptions but also source products at highly competitive prices.

Successful track record of launching new products

– Mustika Ratu has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mustika Ratu 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.

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Weaknesses of Mustika Ratu | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Mustika Ratu are -

High cash cycle compare to competitors

Mustika Ratu has a high cash cycle compare to other players in the Major Drugs industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Interest costs

– Compare to the competition, Mustika Ratu 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.

High operating costs

– Compare to the competitors, Mustika Ratu has high operating costs in the Major Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mustika Ratu lucrative customers.

Need for greater diversity

– Mustika Ratu 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.

High bargaining power of channel partners in Major Drugs industry

– because of the regulatory requirements in Indonesia, Mustika Ratu 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 Major Drugs industry.

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 Mustika Ratu supply chain. Even after few cautionary changes, Mustika Ratu is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mustika Ratu vulnerable to further global disruptions in South East Asia.

Slow to strategic competitive environment developments

– As Mustika Ratu is one of the leading players in the Major Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Major Drugs industry in last five years.

Workers concerns about automation

– As automation is fast increasing in the Major Drugs industry, Mustika Ratu needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Increasing silos among functional specialists

– The organizational structure of Mustika Ratu is dominated by functional specialists. It is not different from other players in the Major Drugs industry, but Mustika Ratu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mustika Ratu to focus more on services in the Major Drugs industry rather than just following the product oriented approach.

Employees’ less understanding of Mustika Ratu strategy

– From the outside it seems that the employees of Mustika Ratu 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.

Lack of clear differentiation of Mustika Ratu products

– To increase the profitability and margins on the products, Mustika Ratu needs to provide more differentiated products than what it is currently offering in the marketplace.

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Mustika Ratu Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Mustika Ratu are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Mustika Ratu in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Major Drugs industry, and it will provide faster access to the consumers.

Using analytics as competitive advantage

– Mustika Ratu has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Major Drugs sector. This continuous investment in analytics has enabled Mustika Ratu to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mustika Ratu to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Mustika Ratu can develop new processes and procedures in Major Drugs 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.

Better consumer reach

– The expansion of the 5G network will help Mustika Ratu to increase its market reach. Mustika Ratu 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.

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. Mustika Ratu can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Mustika Ratu 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 Mustika Ratu to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Use of Bitcoin and other crypto currencies for transactions in Major Drugs industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mustika Ratu in the Major Drugs industry. Now Mustika Ratu can target international markets with far fewer capital restrictions requirements than the existing system.

Loyalty marketing

– Mustika Ratu 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.

Manufacturing automation

– Mustika Ratu can use the latest technology developments to improve its manufacturing and designing process in Major Drugs 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.

Creating value in data economy

– The success of analytics program of Mustika Ratu has opened avenues for new revenue streams for the organization in Major Drugs industry. This can help Mustika Ratu to build a more holistic ecosystem for Mustika Ratu products in the Major Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Major Drugs industry, but it has also influenced the consumer preferences. Mustika Ratu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Mustika Ratu is facing challenges because of the dominance of functional experts in the organization. Mustika Ratu can utilize new technology in the field of Major Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Low interest rates

– Even though inflation is raising its head in most developed economies, Mustika Ratu 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.

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Threats Mustika Ratu External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Mustika Ratu are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Mustika Ratu 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 Mustika Ratu prominent markets.

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 Mustika Ratu business can come under increasing regulations regarding data privacy, data security, etc.

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 Mustika Ratu in the Major Drugs sector and impact the bottomline of the organization.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Mustika Ratu may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Major Drugs sector.

Regulatory challenges

– Mustika Ratu 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 Major Drugs industry regulations.

Consumer confidence and its impact on Mustika Ratu 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 Major Drugs industry and other sectors.

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. Mustika Ratu needs to understand the core reasons impacting the Major Drugs industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Mustika Ratu 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 Major Drugs industry.

Increasing wage structure of Mustika Ratu

– 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 Mustika Ratu.

Technology acceleration in Forth Industrial Revolution

– Mustika Ratu has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, Mustika Ratu needs to keep up with the evolution of technology in the Major Drugs 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 dependence on third party suppliers

– Mustika Ratu 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.

Easy access to finance

– Easy access to finance in Major Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mustika Ratu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Major Drugs industry are lowering. It can presents Mustika Ratu with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Major Drugs sector.

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Weighted SWOT Analysis of Mustika Ratu Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu 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 Mustika Ratu needs to make to build a sustainable competitive advantage.

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