SWOT Analysis / TOWS Matrix for Sarawak Oil Palms (Malaysia)
Based on various researches at Oak Spring University , Sarawak Oil Palms is operating in a macro-environment that has been destablized by – increasing energy prices, geopolitical disruptions, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, wage bills are increasing, technology disruption,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Sarawak Oil Palms
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sarawak Oil Palms can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sarawak Oil Palms, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sarawak Oil Palms 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 Sarawak Oil Palms can be done for the following purposes –
1. Strategic planning of Sarawak Oil Palms
2. Improving business portfolio management of Sarawak Oil Palms
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sarawak Oil Palms
Strengths of Sarawak Oil Palms | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sarawak Oil Palms are -
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For Sarawak Oil Palms digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sarawak Oil Palms 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.
Learning organization
- Sarawak Oil Palms 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 Sarawak Oil Palms is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sarawak Oil Palms emphasize – knowledge, initiative, and innovation.
Analytics focus
– Sarawak Oil Palms 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 Crops industry. The technology infrastructure of Malaysia 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.
Superior customer experience
– The customer experience strategy of Sarawak Oil Palms in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Sarawak Oil Palms has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sarawak Oil Palms staying ahead in the Crops industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Sarawak Oil Palms in the Consumer/Non-Cyclical sector have low bargaining power. Sarawak Oil Palms has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sarawak Oil Palms to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Crops industry
– Sarawak Oil Palms has clearly differentiated products in the market place. This has enabled Sarawak Oil Palms to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped Sarawak Oil Palms to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Sarawak Oil Palms comprises – understanding the underlying the factors in the Crops 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.
High brand equity
– Sarawak Oil Palms has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sarawak Oil Palms to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Sarawak Oil Palms has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sarawak Oil Palms 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.
Highly skilled collaborators
– Sarawak Oil Palms has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of Sarawak Oil Palms have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Sarawak Oil Palms is one of the most innovative firm in Crops sector.
Weaknesses of Sarawak Oil Palms | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sarawak Oil Palms are -
Capital Spending Reduction
– Even during the low interest decade, Sarawak Oil Palms 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 Crops industry using digital technology.
Lack of clear differentiation of Sarawak Oil Palms products
– To increase the profitability and margins on the products, Sarawak Oil Palms needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Sarawak Oil Palms strategy
– From the outside it seems that the employees of Sarawak Oil Palms 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.
No frontier risks strategy
– From the 10K / annual statement of Sarawak Oil Palms, it seems that company is thinking out the frontier risks that can impact Crops 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.
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 Sarawak Oil Palms supply chain. Even after few cautionary changes, Sarawak Oil Palms is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sarawak Oil Palms vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Malaysia, Sarawak Oil Palms needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Sarawak Oil Palms has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sarawak Oil Palms lucrative customers.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at Sarawak Oil Palms 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.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Malaysia, Sarawak Oil Palms 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 Crops industry.
Aligning sales with marketing
– From the outside it seems that Sarawak Oil Palms needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at Sarawak Oil Palms can leverage the sales team experience to cultivate customer relationships as Sarawak Oil Palms is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Crops industry, Sarawak Oil Palms 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.
Sarawak Oil Palms Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sarawak Oil Palms are -
Creating value in data economy
– The success of analytics program of Sarawak Oil Palms has opened avenues for new revenue streams for the organization in Crops industry. This can help Sarawak Oil Palms to build a more holistic ecosystem for Sarawak Oil Palms products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Sarawak Oil Palms can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
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. Sarawak Oil Palms can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sarawak Oil Palms can use these opportunities to build new business models that can help the communities that Sarawak Oil Palms operates in. Secondly it can use opportunities from government spending in Crops sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sarawak Oil Palms 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. Sarawak Oil Palms 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 Sarawak Oil Palms 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
– Sarawak Oil Palms 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sarawak Oil Palms to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sarawak Oil Palms to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sarawak Oil Palms in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Sarawak Oil Palms to increase its market reach. Sarawak Oil Palms 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.
Leveraging digital technologies
– Sarawak Oil Palms 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, Sarawak Oil Palms 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 Sarawak Oil Palms to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sarawak Oil Palms 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.
Threats Sarawak Oil Palms External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sarawak Oil Palms are -
Stagnating economy with rate increase
– Sarawak Oil Palms 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 Crops 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 Sarawak Oil Palms business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sarawak Oil Palms 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 Sarawak Oil Palms prominent markets.
High dependence on third party suppliers
– Sarawak Oil Palms 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.
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. Sarawak Oil Palms needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
Consumer confidence and its impact on Sarawak Oil Palms 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 Crops industry and other sectors.
Easy access to finance
– Easy access to finance in Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sarawak Oil Palms can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Sarawak Oil Palms.
Shortening product life cycle
– it is one of the major threat that Sarawak Oil Palms is facing in Crops 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 Sarawak Oil Palms in Crops industry. The Crops 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.
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. Sarawak Oil Palms 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents Sarawak Oil Palms with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.
Weighted SWOT Analysis of Sarawak Oil Palms Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sarawak Oil Palms 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 Sarawak Oil Palms 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 Sarawak Oil Palms 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 Sarawak Oil Palms 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 Sarawak Oil Palms needs to make to build a sustainable competitive advantage.