PBA Holdings Bhd (PBAH) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for PBA Holdings Bhd (Malaysia)

Based on various researches at Oak Spring University , PBA Holdings Bhd is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing energy prices, increasing commodity prices, technology disruption, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of PBA Holdings Bhd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PBA Holdings Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PBA Holdings Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PBA Holdings Bhd 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of PBA Holdings Bhd can be done for the following purposes –
1. Strategic planning of PBA Holdings Bhd
2. Improving business portfolio management of PBA Holdings Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Water Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PBA Holdings Bhd

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Strengths of PBA Holdings Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of PBA Holdings Bhd are -

Learning organization

- PBA Holdings Bhd 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 PBA Holdings Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PBA Holdings Bhd emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– PBA Holdings Bhd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Utilities industry. Secondly the value chain collaborators of PBA Holdings Bhd have helped the firm to develop new products and bring them quickly to the marketplace.

Training and development

– PBA Holdings Bhd has one of the best training and development program in Utilities 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.

Organizational Resilience of PBA Holdings Bhd

– The covid-19 pandemic has put organizational resilience at the centre of everthing PBA Holdings Bhd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Water Utilities industry

- digital transformation varies from industry to industry. For PBA Holdings Bhd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. PBA Holdings Bhd 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.

Innovation driven organization

– PBA Holdings Bhd is one of the most innovative firm in Water Utilities sector.

Effective Research and Development (R&D)

– PBA Holdings Bhd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PBA Holdings Bhd staying ahead in the Water Utilities 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

– PBA Holdings Bhd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PBA Holdings Bhd 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.

Superior customer experience

– The customer experience strategy of PBA Holdings Bhd in Water Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

– Suppliers of PBA Holdings Bhd in the Utilities sector have low bargaining power. PBA Holdings Bhd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PBA Holdings Bhd to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Water Utilities

– PBA Holdings Bhd is one of the leading players in the Water Utilities industry in Malaysia. Over the years it has not only transformed the business landscape in the Water Utilities industry in Malaysia but also across the existing markets. The ability to lead change has enabled PBA Holdings Bhd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that PBA Holdings Bhd 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.

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Weaknesses of PBA Holdings Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of PBA Holdings Bhd are -

High cash cycle compare to competitors

PBA Holdings Bhd has a high cash cycle compare to other players in the Water Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to strategic competitive environment developments

– As PBA Holdings Bhd is one of the leading players in the Water Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Water Utilities industry in last five years.

High operating costs

– Compare to the competitors, PBA Holdings Bhd has high operating costs in the Water Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract PBA Holdings Bhd lucrative customers.

Products dominated business model

– Even though PBA Holdings Bhd has some of the most successful models in the Water Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. PBA Holdings Bhd should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of PBA Holdings Bhd products

– To increase the profitability and margins on the products, PBA Holdings Bhd needs to provide more differentiated products than what it is currently offering in the marketplace.

Capital Spending Reduction

– Even during the low interest decade, PBA Holdings Bhd 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 Water Utilities industry using digital technology.

Ability to respond to the competition

– As the decision making is very deliberative at PBA Holdings Bhd, in the dynamic environment of Water Utilities industry it has struggled to respond to the nimble upstart competition. PBA Holdings Bhd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on PBA Holdings Bhd ‘s star products

– The top 2 products and services of PBA Holdings Bhd still accounts for major business revenue. This dependence on star products in Water Utilities industry has resulted into insufficient focus on developing new products, even though PBA Holdings Bhd has relatively successful track record of launching new products.

Workers concerns about automation

– As automation is fast increasing in the Water Utilities industry, PBA Holdings Bhd 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.

Slow decision making process

– As mentioned earlier in the report, PBA Holdings Bhd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Utilities industry over the last five years. PBA Holdings Bhd 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.

Interest costs

– Compare to the competition, PBA Holdings Bhd 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.

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PBA Holdings Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of PBA Holdings Bhd are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Water Utilities industry, but it has also influenced the consumer preferences. PBA Holdings Bhd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for PBA Holdings Bhd 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.

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 PBA Holdings Bhd 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.

Use of Bitcoin and other crypto currencies for transactions in Water Utilities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for PBA Holdings Bhd in the Water Utilities industry. Now PBA Holdings Bhd can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– PBA Holdings Bhd can use the latest technology developments to improve its manufacturing and designing process in Water Utilities 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.

Building a culture of innovation

– managers at PBA Holdings Bhd 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 Water Utilities industry.

Low interest rates

– Even though inflation is raising its head in most developed economies, PBA Holdings Bhd 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.

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. PBA Holdings Bhd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help PBA Holdings Bhd to increase its market reach. PBA Holdings Bhd 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.

Developing new processes and practices

– PBA Holdings Bhd can develop new processes and procedures in Water Utilities 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for PBA Holdings Bhd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Utilities industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Water Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PBA Holdings Bhd 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. PBA Holdings Bhd 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.

Leveraging digital technologies

– PBA Holdings Bhd 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.

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Threats PBA Holdings Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of PBA Holdings Bhd are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for PBA Holdings Bhd in Water Utilities industry. The Water Utilities 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.

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. PBA Holdings Bhd needs to understand the core reasons impacting the Water Utilities industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, PBA Holdings Bhd 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 PBA Holdings Bhd prominent markets.

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. PBA Holdings Bhd 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.

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 wage structure of PBA Holdings Bhd

– 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 PBA Holdings Bhd.

High dependence on third party suppliers

– PBA Holdings Bhd 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.

Consumer confidence and its impact on PBA Holdings Bhd 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 Water Utilities 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 PBA Holdings Bhd in the Water Utilities sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Water Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. PBA Holdings Bhd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 PBA Holdings Bhd business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that PBA Holdings Bhd is facing in Water Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– PBA Holdings Bhd 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 Water Utilities industry.

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Weighted SWOT Analysis of PBA Holdings Bhd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PBA Holdings Bhd 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 PBA Holdings Bhd 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 PBA Holdings Bhd 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 PBA Holdings Bhd 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 PBA Holdings Bhd needs to make to build a sustainable competitive advantage.

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