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 – there is backlash against globalization, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, 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 -

Ability to recruit top talent

– PBA Holdings Bhd is one of the leading players in the Water Utilities 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.

Innovation driven organization

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

Cross disciplinary teams

– Horizontal connected teams at the PBA Holdings Bhd 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.

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.

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.

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.

Analytics focus

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

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.

Operational resilience

– The operational resilience strategy of PBA Holdings Bhd comprises – understanding the underlying the factors in the Water Utilities 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.

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.

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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 bargaining power of channel partners in Water Utilities industry

– because of the regulatory requirements in Malaysia, PBA Holdings Bhd 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 Water Utilities industry.

Increasing silos among functional specialists

– The organizational structure of PBA Holdings Bhd is dominated by functional specialists. It is not different from other players in the Water Utilities industry, but PBA Holdings Bhd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PBA Holdings Bhd to focus more on services in the Water Utilities industry rather than just following the product oriented approach.

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.

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.

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 PBA Holdings Bhd supply chain. Even after few cautionary changes, PBA Holdings Bhd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left PBA Holdings Bhd vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of PBA Holdings Bhd, it seems that company is thinking out the frontier risks that can impact Water Utilities 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.

Low market penetration in new markets

– Outside its home market of Malaysia, PBA Holdings Bhd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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.

Compensation and incentives

– The revenue per employee of PBA Holdings Bhd is just above the Water Utilities 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.

Aligning sales with marketing

– From the outside it seems that PBA Holdings Bhd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Water Utilities industry have deep experience in developing customer relationships. Marketing department at PBA Holdings Bhd can leverage the sales team experience to cultivate customer relationships as PBA Holdings Bhd is planning to shift buying processes online.

Employees’ less understanding of PBA Holdings Bhd strategy

– From the outside it seems that the employees of PBA Holdings Bhd 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.

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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 -

Loyalty marketing

– PBA Holdings Bhd 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.

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.

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.

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.

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.

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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, PBA Holdings Bhd 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 PBA Holdings Bhd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, PBA Holdings Bhd is facing challenges because of the dominance of functional experts in the organization. PBA Holdings Bhd can utilize new technology in the field of Water Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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.

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for PBA Holdings Bhd 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 PBA Holdings Bhd to hire the very best people irrespective of their geographical location.

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.

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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 -

Technology acceleration in Forth Industrial Revolution

– PBA Holdings Bhd has witnessed rapid integration of technology during Covid-19 in the Water Utilities industry. As one of the leading players in the industry, PBA Holdings Bhd needs to keep up with the evolution of technology in the Water Utilities 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.

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.

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.

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.

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 PBA Holdings Bhd.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Water Utilities industry are lowering. It can presents PBA Holdings Bhd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Utilities sector.

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.

Regulatory challenges

– PBA Holdings Bhd 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 Water Utilities industry regulations.

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, PBA Holdings Bhd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Utilities sector.

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.

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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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