SWOT Analysis / TOWS Matrix for Cahayaputra Asa Keramik (Indonesia)
Based on various researches at Oak Spring University , Cahayaputra Asa Keramik is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, there is backlash against globalization, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Cahayaputra Asa Keramik
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cahayaputra Asa Keramik can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cahayaputra Asa Keramik, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik can be done for the following purposes –
1. Strategic planning of Cahayaputra Asa Keramik
2. Improving business portfolio management of Cahayaputra Asa Keramik
3. Assessing feasibility of the new initiative in Indonesia
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cahayaputra Asa Keramik
Strengths of Cahayaputra Asa Keramik | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cahayaputra Asa Keramik are -
Highly skilled collaborators
– Cahayaputra Asa Keramik has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Cahayaputra Asa Keramik have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Cahayaputra Asa Keramik
– The covid-19 pandemic has put organizational resilience at the centre of everthing Cahayaputra Asa Keramik does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Cahayaputra Asa Keramik 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.
Effective Research and Development (R&D)
– Cahayaputra Asa Keramik has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cahayaputra Asa Keramik staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Cahayaputra Asa Keramik has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cahayaputra Asa Keramik 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.
Low bargaining power of suppliers
– Suppliers of Cahayaputra Asa Keramik in the sector have low bargaining power. Cahayaputra Asa Keramik has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cahayaputra Asa Keramik to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Cahayaputra Asa Keramik is present in almost all the verticals within the industry. This has provided Cahayaputra Asa Keramik 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.
Sustainable margins compare to other players in industry
– Cahayaputra Asa Keramik has clearly differentiated products in the market place. This has enabled Cahayaputra Asa Keramik to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Cahayaputra Asa Keramik to invest into research and development (R&D) and innovation.
Learning organization
- Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cahayaputra Asa Keramik emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Cahayaputra Asa Keramik 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.
Ability to lead change in
– Cahayaputra Asa Keramik is one of the leading players in the industry in Indonesia. Over the years it has not only transformed the business landscape in the industry in Indonesia but also across the existing markets. The ability to lead change has enabled Cahayaputra Asa Keramik in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Cahayaputra Asa Keramik has one of the best training and development program in 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.
Weaknesses of Cahayaputra Asa Keramik | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cahayaputra Asa Keramik are -
Interest costs
– Compare to the competition, Cahayaputra Asa Keramik 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.
Compensation and incentives
– The revenue per employee of Cahayaputra Asa Keramik is just above the 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.
High operating costs
– Compare to the competitors, Cahayaputra Asa Keramik has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cahayaputra Asa Keramik lucrative customers.
Lack of clear differentiation of Cahayaputra Asa Keramik products
– To increase the profitability and margins on the products, Cahayaputra Asa Keramik needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Cahayaputra Asa Keramik has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cahayaputra Asa Keramik 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.
Increasing silos among functional specialists
– The organizational structure of Cahayaputra Asa Keramik is dominated by functional specialists. It is not different from other players in the industry, but Cahayaputra Asa Keramik needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cahayaputra Asa Keramik to focus more on services in the industry rather than just following the product oriented approach.
High dependence on Cahayaputra Asa Keramik ‘s star products
– The top 2 products and services of Cahayaputra Asa Keramik still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Cahayaputra Asa Keramik has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Indonesia, Cahayaputra Asa Keramik needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Cahayaputra Asa Keramik 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 industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cahayaputra Asa Keramik is slow explore the new channels of communication. These new channels of communication can help Cahayaputra Asa Keramik to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Cahayaputra Asa Keramik has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cahayaputra Asa Keramik should strive to include more intangible value offerings along with its core products and services.
Cahayaputra Asa Keramik Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cahayaputra Asa Keramik are -
Developing new processes and practices
– Cahayaputra Asa Keramik can develop new processes and procedures in 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.
Building a culture of innovation
– managers at Cahayaputra Asa Keramik 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 industry.
Better consumer reach
– The expansion of the 5G network will help Cahayaputra Asa Keramik to increase its market reach. Cahayaputra Asa Keramik 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cahayaputra Asa Keramik can use these opportunities to build new business models that can help the communities that Cahayaputra Asa Keramik operates in. Secondly it can use opportunities from government spending in sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cahayaputra Asa Keramik 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. Cahayaputra Asa Keramik 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cahayaputra Asa Keramik can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Cahayaputra Asa Keramik has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cahayaputra Asa Keramik 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.
Learning at scale
– Online learning technologies has now opened space for Cahayaputra Asa Keramik 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.
Leveraging digital technologies
– Cahayaputra Asa Keramik 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik 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 industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cahayaputra Asa Keramik in the industry. Now Cahayaputra Asa Keramik can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Cahayaputra Asa Keramik can use the latest technology developments to improve its manufacturing and designing process in 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.
Threats Cahayaputra Asa Keramik External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cahayaputra Asa Keramik are -
Environmental challenges
– Cahayaputra Asa Keramik 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. Cahayaputra Asa Keramik can take advantage of this fund but it will also bring new competitors in the industry.
Increasing wage structure of Cahayaputra Asa Keramik
– 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 Cahayaputra Asa Keramik.
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.
Consumer confidence and its impact on Cahayaputra Asa Keramik 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 industry and other sectors.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cahayaputra Asa Keramik can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Cahayaputra Asa Keramik 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.
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 Cahayaputra Asa Keramik business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Cahayaputra Asa Keramik 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik prominent markets.
Stagnating economy with rate increase
– Cahayaputra Asa Keramik 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 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 Cahayaputra Asa Keramik in the sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Cahayaputra Asa Keramik with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Cahayaputra Asa Keramik Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik 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 Cahayaputra Asa Keramik needs to make to build a sustainable competitive advantage.