Primarindo Asia Infrastructure Tbk (BIMA) SWOT Analysis / TOWS Matrix / MBA Resources
Footwear
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Primarindo Asia Infrastructure Tbk (Indonesia)
Based on various researches at Oak Spring University , Primarindo Asia Infrastructure Tbk is operating in a macro-environment that has been destablized by – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of Primarindo Asia Infrastructure Tbk
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Primarindo Asia Infrastructure Tbk can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Primarindo Asia Infrastructure Tbk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk can be done for the following purposes –
1. Strategic planning of Primarindo Asia Infrastructure Tbk
2. Improving business portfolio management of Primarindo Asia Infrastructure Tbk
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Primarindo Asia Infrastructure Tbk
Strengths of Primarindo Asia Infrastructure Tbk | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Primarindo Asia Infrastructure Tbk are -
Ability to recruit top talent
– Primarindo Asia Infrastructure Tbk is one of the leading players in the Footwear 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.
Organizational Resilience of Primarindo Asia Infrastructure Tbk
– The covid-19 pandemic has put organizational resilience at the centre of everthing Primarindo Asia Infrastructure Tbk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Primarindo Asia Infrastructure Tbk has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Primarindo Asia Infrastructure Tbk in Footwear industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Primarindo Asia Infrastructure Tbk comprises – understanding the underlying the factors in the Footwear industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Primarindo Asia Infrastructure Tbk 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 Footwear 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.
Strong track record of project management in the Footwear industry
– Primarindo Asia Infrastructure Tbk is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Primarindo Asia Infrastructure Tbk has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Primarindo Asia Infrastructure Tbk staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Primarindo Asia Infrastructure Tbk has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Primarindo Asia Infrastructure Tbk to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Primarindo Asia Infrastructure Tbk is one of the most innovative firm in Footwear sector.
Learning organization
- Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Primarindo Asia Infrastructure Tbk emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Primarindo Asia Infrastructure Tbk has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Footwear industry. Secondly the value chain collaborators of Primarindo Asia Infrastructure Tbk have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Primarindo Asia Infrastructure Tbk | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Primarindo Asia Infrastructure Tbk are -
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at Primarindo Asia Infrastructure Tbk 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.
Compensation and incentives
– The revenue per employee of Primarindo Asia Infrastructure Tbk is just above the Footwear 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.
Workers concerns about automation
– As automation is fast increasing in the Footwear industry, Primarindo Asia Infrastructure Tbk 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.
Capital Spending Reduction
– Even during the low interest decade, Primarindo Asia Infrastructure Tbk 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 Footwear industry using digital technology.
Lack of clear differentiation of Primarindo Asia Infrastructure Tbk products
– To increase the profitability and margins on the products, Primarindo Asia Infrastructure Tbk needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Primarindo Asia Infrastructure Tbk has a high cash cycle compare to other players in the Footwear industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Indonesia, Primarindo Asia Infrastructure Tbk needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Footwear industry
– because of the regulatory requirements in Indonesia, Primarindo Asia Infrastructure Tbk 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 Footwear industry.
No frontier risks strategy
– From the 10K / annual statement of Primarindo Asia Infrastructure Tbk, it seems that company is thinking out the frontier risks that can impact Footwear 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 Primarindo Asia Infrastructure Tbk strategy
– From the outside it seems that the employees of Primarindo Asia Infrastructure Tbk 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.
High operating costs
– Compare to the competitors, Primarindo Asia Infrastructure Tbk has high operating costs in the Footwear industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Primarindo Asia Infrastructure Tbk lucrative customers.
Primarindo Asia Infrastructure Tbk Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Primarindo Asia Infrastructure Tbk are -
Learning at scale
– Online learning technologies has now opened space for Primarindo Asia Infrastructure Tbk 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 Footwear industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Primarindo Asia Infrastructure Tbk 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. Primarindo Asia Infrastructure Tbk 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Footwear industry, but it has also influenced the consumer preferences. Primarindo Asia Infrastructure Tbk can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Primarindo Asia Infrastructure Tbk to increase its market reach. Primarindo Asia Infrastructure Tbk 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Primarindo Asia Infrastructure Tbk is facing challenges because of the dominance of functional experts in the organization. Primarindo Asia Infrastructure Tbk can utilize new technology in the field of Footwear industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Primarindo Asia Infrastructure Tbk can develop new processes and procedures in Footwear 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.
Using analytics as competitive advantage
– Primarindo Asia Infrastructure Tbk has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Footwear sector. This continuous investment in analytics has enabled Primarindo Asia Infrastructure Tbk to build a competitive advantage using analytics. The analytics driven competitive advantage can help Primarindo Asia Infrastructure Tbk to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Primarindo Asia Infrastructure Tbk 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.
Building a culture of innovation
– managers at Primarindo Asia Infrastructure Tbk 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 Footwear industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Primarindo Asia Infrastructure Tbk can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Primarindo Asia Infrastructure Tbk has opened avenues for new revenue streams for the organization in Footwear industry. This can help Primarindo Asia Infrastructure Tbk to build a more holistic ecosystem for Primarindo Asia Infrastructure Tbk products in the Footwear industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Footwear industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Primarindo Asia Infrastructure Tbk in the Footwear industry. Now Primarindo Asia Infrastructure Tbk can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Primarindo Asia Infrastructure Tbk External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Primarindo Asia Infrastructure Tbk are -
Consumer confidence and its impact on Primarindo Asia Infrastructure Tbk 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 Footwear industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Primarindo Asia Infrastructure Tbk in Footwear industry. The Footwear 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.
Regulatory challenges
– Primarindo Asia Infrastructure Tbk 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 Footwear 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.
High dependence on third party suppliers
– Primarindo Asia Infrastructure Tbk 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Primarindo Asia Infrastructure Tbk may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Footwear sector.
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.
Environmental challenges
– Primarindo Asia Infrastructure Tbk needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Primarindo Asia Infrastructure Tbk can take advantage of this fund but it will also bring new competitors in the Footwear industry.
Easy access to finance
– Easy access to finance in Footwear industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Primarindo Asia Infrastructure Tbk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Primarindo Asia Infrastructure Tbk is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Primarindo Asia Infrastructure Tbk.
Stagnating economy with rate increase
– Primarindo Asia Infrastructure Tbk 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 Footwear industry.
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 Primarindo Asia Infrastructure Tbk in the Footwear sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Primarindo Asia Infrastructure Tbk Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk 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 Primarindo Asia Infrastructure Tbk needs to make to build a sustainable competitive advantage.