SWOT Analysis / TOWS Matrix for Sentral Mitra Informatika (Indonesia)
Based on various researches at Oak Spring University , Sentral Mitra Informatika is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Sentral Mitra Informatika
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sentral Mitra Informatika can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sentral Mitra Informatika, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sentral Mitra Informatika 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 Sentral Mitra Informatika can be done for the following purposes –
1. Strategic planning of Sentral Mitra Informatika
2. Improving business portfolio management of Sentral Mitra Informatika
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 Sentral Mitra Informatika
Strengths of Sentral Mitra Informatika | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sentral Mitra Informatika are -
Successful track record of launching new products
– Sentral Mitra Informatika has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sentral Mitra Informatika 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.
High brand equity
– Sentral Mitra Informatika has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sentral Mitra Informatika to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in
– Sentral Mitra Informatika 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 Sentral Mitra Informatika in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Sentral Mitra Informatika 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 Sentral Mitra Informatika have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Sentral Mitra Informatika in the sector have low bargaining power. Sentral Mitra Informatika has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sentral Mitra Informatika to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Sentral Mitra Informatika 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 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.
Organizational Resilience of Sentral Mitra Informatika
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sentral Mitra Informatika does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Sentral Mitra Informatika comprises – understanding the underlying the factors in the 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.
Training and development
– Sentral Mitra Informatika 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.
Learning organization
- Sentral Mitra Informatika 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 Sentral Mitra Informatika is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sentral Mitra Informatika emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in industry
– Sentral Mitra Informatika has clearly differentiated products in the market place. This has enabled Sentral Mitra Informatika to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Sentral Mitra Informatika to invest into research and development (R&D) and innovation.
Strong track record of project management in the industry
– Sentral Mitra Informatika is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Sentral Mitra Informatika | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sentral Mitra Informatika are -
Ability to respond to the competition
– As the decision making is very deliberative at Sentral Mitra Informatika, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Sentral Mitra Informatika has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sentral Mitra Informatika is slow explore the new channels of communication. These new channels of communication can help Sentral Mitra Informatika to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on Sentral Mitra Informatika ‘s star products
– The top 2 products and services of Sentral Mitra Informatika still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Sentral Mitra Informatika has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Sentral Mitra Informatika 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.
Low market penetration in new markets
– Outside its home market of Indonesia, Sentral Mitra Informatika needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Sentral Mitra Informatika is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring in industry
– The stress on hiring functional specialists at Sentral Mitra Informatika 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.
Slow decision making process
– As mentioned earlier in the report, Sentral Mitra Informatika 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. Sentral Mitra Informatika 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.
High operating costs
– Compare to the competitors, Sentral Mitra Informatika 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 Sentral Mitra Informatika lucrative customers.
Aligning sales with marketing
– From the outside it seems that Sentral Mitra Informatika needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Sentral Mitra Informatika can leverage the sales team experience to cultivate customer relationships as Sentral Mitra Informatika is planning to shift buying processes online.
Employees’ less understanding of Sentral Mitra Informatika strategy
– From the outside it seems that the employees of Sentral Mitra Informatika 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.
Sentral Mitra Informatika Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sentral Mitra Informatika are -
Building a culture of innovation
– managers at Sentral Mitra Informatika 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 Sentral Mitra Informatika to increase its market reach. Sentral Mitra Informatika 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.
Learning at scale
– Online learning technologies has now opened space for Sentral Mitra Informatika 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.
Creating value in data economy
– The success of analytics program of Sentral Mitra Informatika has opened avenues for new revenue streams for the organization in industry. This can help Sentral Mitra Informatika to build a more holistic ecosystem for Sentral Mitra Informatika products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Sentral Mitra Informatika 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sentral Mitra Informatika can use these opportunities to build new business models that can help the communities that Sentral Mitra Informatika operates in. Secondly it can use opportunities from government spending in sector.
Using analytics as competitive advantage
– Sentral Mitra Informatika has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Sentral Mitra Informatika to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sentral Mitra Informatika to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sentral Mitra Informatika can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Sentral Mitra Informatika can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Sentral Mitra Informatika 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sentral Mitra Informatika 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 Sentral Mitra Informatika 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 Sentral Mitra Informatika in the industry. Now Sentral Mitra Informatika can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Sentral Mitra Informatika can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Sentral Mitra Informatika External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sentral Mitra Informatika are -
Shortening product life cycle
– it is one of the major threat that Sentral Mitra Informatika is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sentral Mitra Informatika in industry. The 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.
Stagnating economy with rate increase
– Sentral Mitra Informatika 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.
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 Sentral Mitra Informatika business can come under increasing regulations regarding data privacy, data security, etc.
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. Sentral Mitra Informatika can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Sentral Mitra Informatika
– 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 Sentral Mitra Informatika.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sentral Mitra Informatika may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Sentral Mitra Informatika with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sentral Mitra Informatika 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 Sentral Mitra Informatika prominent markets.
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.
Consumer confidence and its impact on Sentral Mitra Informatika 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.
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 Sentral Mitra Informatika in the sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Sentral Mitra Informatika Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sentral Mitra Informatika 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 Sentral Mitra Informatika 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 Sentral Mitra Informatika 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 Sentral Mitra Informatika 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 Sentral Mitra Informatika needs to make to build a sustainable competitive advantage.