DKSH Malaysia Berhad (DELM) SWOT Analysis / TOWS Matrix / MBA Resources
Business Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for DKSH Malaysia Berhad (Malaysia)
Based on various researches at Oak Spring University , DKSH Malaysia Berhad is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, there is backlash against globalization, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of DKSH Malaysia Berhad
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that DKSH Malaysia Berhad can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the DKSH Malaysia Berhad, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which DKSH Malaysia Berhad 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 DKSH Malaysia Berhad can be done for the following purposes –
1. Strategic planning of DKSH Malaysia Berhad
2. Improving business portfolio management of DKSH Malaysia Berhad
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of DKSH Malaysia Berhad
Strengths of DKSH Malaysia Berhad | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of DKSH Malaysia Berhad are -
Cross disciplinary teams
– Horizontal connected teams at the DKSH Malaysia Berhad 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 recruit top talent
– DKSH Malaysia Berhad is one of the leading players in the Business Services industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Business Services industry
– DKSH Malaysia Berhad has clearly differentiated products in the market place. This has enabled DKSH Malaysia Berhad to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped DKSH Malaysia Berhad to invest into research and development (R&D) and innovation.
Diverse revenue streams
– DKSH Malaysia Berhad is present in almost all the verticals within the Business Services industry. This has provided DKSH Malaysia Berhad 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.
Operational resilience
– The operational resilience strategy of DKSH Malaysia Berhad comprises – understanding the underlying the factors in the Business Services 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.
Innovation driven organization
– DKSH Malaysia Berhad is one of the most innovative firm in Business Services sector.
Ability to lead change in Business Services
– DKSH Malaysia Berhad is one of the leading players in the Business Services industry in Malaysia. Over the years it has not only transformed the business landscape in the Business Services industry in Malaysia but also across the existing markets. The ability to lead change has enabled DKSH Malaysia Berhad in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of DKSH Malaysia Berhad in the Services sector have low bargaining power. DKSH Malaysia Berhad has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps DKSH Malaysia Berhad to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– DKSH Malaysia Berhad has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. DKSH Malaysia Berhad 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.
Learning organization
- DKSH Malaysia Berhad 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 DKSH Malaysia Berhad is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at DKSH Malaysia Berhad emphasize – knowledge, initiative, and innovation.
Organizational Resilience of DKSH Malaysia Berhad
– The covid-19 pandemic has put organizational resilience at the centre of everthing DKSH Malaysia Berhad does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– DKSH Malaysia Berhad has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled DKSH Malaysia Berhad to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of DKSH Malaysia Berhad | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DKSH Malaysia Berhad are -
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at DKSH Malaysia Berhad 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.
No frontier risks strategy
– From the 10K / annual statement of DKSH Malaysia Berhad, it seems that company is thinking out the frontier risks that can impact Business Services 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 cash cycle compare to competitors
DKSH Malaysia Berhad has a high cash cycle compare to other players in the Business Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at DKSH Malaysia Berhad, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. DKSH Malaysia Berhad has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, DKSH Malaysia Berhad 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 Business Services industry using digital technology.
Interest costs
– Compare to the competition, DKSH Malaysia Berhad 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 dependence on DKSH Malaysia Berhad ‘s star products
– The top 2 products and services of DKSH Malaysia Berhad still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though DKSH Malaysia Berhad has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that DKSH Malaysia Berhad needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at DKSH Malaysia Berhad can leverage the sales team experience to cultivate customer relationships as DKSH Malaysia Berhad is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, DKSH Malaysia Berhad is slow explore the new channels of communication. These new channels of communication can help DKSH Malaysia Berhad to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of DKSH Malaysia Berhad products
– To increase the profitability and margins on the products, DKSH Malaysia Berhad needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of DKSH Malaysia Berhad strategy
– From the outside it seems that the employees of DKSH Malaysia Berhad 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.
DKSH Malaysia Berhad Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of DKSH Malaysia Berhad are -
Leveraging digital technologies
– DKSH Malaysia Berhad 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, DKSH Malaysia Berhad can use these opportunities to build new business models that can help the communities that DKSH Malaysia Berhad operates in. Secondly it can use opportunities from government spending in Business Services sector.
Manufacturing automation
– DKSH Malaysia Berhad can use the latest technology developments to improve its manufacturing and designing process in Business Services 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. DKSH Malaysia Berhad can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at DKSH Malaysia Berhad 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 Business Services industry.
Learning at scale
– Online learning technologies has now opened space for DKSH Malaysia Berhad 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.
Loyalty marketing
– DKSH Malaysia Berhad 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.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for DKSH Malaysia Berhad in the Business Services industry. Now DKSH Malaysia Berhad can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, DKSH Malaysia Berhad 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.
Buying journey improvements
– DKSH Malaysia Berhad can improve the customer journey of consumers in the Business Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. DKSH Malaysia Berhad can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 DKSH Malaysia Berhad 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. DKSH Malaysia Berhad 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. DKSH Malaysia Berhad 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.
Threats DKSH Malaysia Berhad External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of DKSH Malaysia Berhad are -
Consumer confidence and its impact on DKSH Malaysia Berhad 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 Business Services industry and other sectors.
Stagnating economy with rate increase
– DKSH Malaysia Berhad 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 Business Services industry.
Increasing wage structure of DKSH Malaysia Berhad
– 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 DKSH Malaysia Berhad.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, DKSH Malaysia Berhad may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents DKSH Malaysia Berhad with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.
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 DKSH Malaysia Berhad business can come under increasing regulations regarding data privacy, data security, etc.
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.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. DKSH Malaysia Berhad can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 DKSH Malaysia Berhad.
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. DKSH Malaysia Berhad needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
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. DKSH Malaysia Berhad 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.
Regulatory challenges
– DKSH Malaysia Berhad 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 Business Services industry regulations.
Technology acceleration in Forth Industrial Revolution
– DKSH Malaysia Berhad has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, DKSH Malaysia Berhad needs to keep up with the evolution of technology in the Business Services 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.
Weighted SWOT Analysis of DKSH Malaysia Berhad Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at DKSH Malaysia Berhad 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 DKSH Malaysia Berhad 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 DKSH Malaysia Berhad 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 DKSH Malaysia Berhad 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 DKSH Malaysia Berhad needs to make to build a sustainable competitive advantage.