SWOT Analysis / TOWS Matrix for Reliance Pacific (Malaysia)
Based on various researches at Oak Spring University , Reliance Pacific is operating in a macro-environment that has been destablized by – increasing energy prices, central banks are concerned over increasing inflation, technology disruption, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
there is increasing trade war between United States & China, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Reliance Pacific can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Reliance Pacific, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Reliance Pacific 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 Reliance Pacific can be done for the following purposes –
1. Strategic planning of Reliance Pacific
2. Improving business portfolio management of Reliance Pacific
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Reliance Pacific
Strengths of Reliance Pacific | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Reliance Pacific are -
Superior customer experience
– The customer experience strategy of Reliance Pacific in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Reliance Pacific has one of the best training and development program in Services 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.
Cross disciplinary teams
– Horizontal connected teams at the Reliance Pacific 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.
High brand equity
– Reliance Pacific has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Reliance Pacific to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Reliance Pacific has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Reliance Pacific 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.
Strong track record of project management in the Personal Services industry
– Reliance Pacific is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Reliance Pacific has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Reliance Pacific have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Reliance Pacific is present in almost all the verticals within the Personal Services industry. This has provided Reliance Pacific 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.
High switching costs
– The high switching costs that Reliance Pacific 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 Reliance Pacific comprises – understanding the underlying the factors in the Personal 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.
Ability to recruit top talent
– Reliance Pacific is one of the leading players in the Personal 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 Personal Services industry
– Reliance Pacific has clearly differentiated products in the market place. This has enabled Reliance Pacific to fetch slight price premium compare to the competitors in the Personal Services industry. The sustainable margins have also helped Reliance Pacific to invest into research and development (R&D) and innovation.
Weaknesses of Reliance Pacific | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reliance Pacific are -
Low market penetration in new markets
– Outside its home market of Malaysia, Reliance Pacific needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Reliance Pacific 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 Personal Services industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Reliance Pacific is dominated by functional specialists. It is not different from other players in the Personal Services industry, but Reliance Pacific needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Reliance Pacific to focus more on services in the Personal Services industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Personal Services industry, Reliance Pacific 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 bargaining power of channel partners in Personal Services industry
– because of the regulatory requirements in Malaysia, Reliance Pacific 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 Personal Services industry.
No frontier risks strategy
– From the 10K / annual statement of Reliance Pacific, it seems that company is thinking out the frontier risks that can impact Personal 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 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 Reliance Pacific supply chain. Even after few cautionary changes, Reliance Pacific is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Reliance Pacific vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Reliance Pacific has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal Services industry over the last five years. Reliance Pacific 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.
Products dominated business model
– Even though Reliance Pacific has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Reliance Pacific should strive to include more intangible value offerings along with its core products and services.
High dependence on Reliance Pacific ‘s star products
– The top 2 products and services of Reliance Pacific still accounts for major business revenue. This dependence on star products in Personal Services industry has resulted into insufficient focus on developing new products, even though Reliance Pacific has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Reliance Pacific has high operating costs in the Personal Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Reliance Pacific lucrative customers.
Reliance Pacific Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Reliance Pacific are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal Services industry, but it has also influenced the consumer preferences. Reliance Pacific can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Reliance Pacific can develop new processes and procedures in Personal Services 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.
Buying journey improvements
– Reliance Pacific can improve the customer journey of consumers in the Personal 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.
Learning at scale
– Online learning technologies has now opened space for Reliance Pacific 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.
Better consumer reach
– The expansion of the 5G network will help Reliance Pacific to increase its market reach. Reliance Pacific 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.
Building a culture of innovation
– managers at Reliance Pacific 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 Personal Services industry.
Use of Bitcoin and other crypto currencies for transactions in Personal Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Reliance Pacific in the Personal Services industry. Now Reliance Pacific can target international markets with far fewer capital restrictions requirements than the existing system.
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. Reliance Pacific can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Reliance Pacific 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Reliance Pacific in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Reliance Pacific can use these opportunities to build new business models that can help the communities that Reliance Pacific operates in. Secondly it can use opportunities from government spending in Personal Services sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Reliance Pacific can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Reliance Pacific 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.
Threats Reliance Pacific External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Reliance Pacific are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Reliance Pacific 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 Reliance Pacific prominent markets.
Regulatory challenges
– Reliance Pacific 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 Personal Services industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal Services industry are lowering. It can presents Reliance Pacific with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.
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 Reliance Pacific.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Reliance Pacific in Personal Services industry. The Personal Services 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.
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 Reliance Pacific business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Reliance Pacific 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 Reliance Pacific is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Reliance Pacific 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Reliance Pacific may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal Services sector.
Consumer confidence and its impact on Reliance Pacific 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 Personal Services industry and other sectors.
Easy access to finance
– Easy access to finance in Personal Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Reliance Pacific can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Reliance Pacific in the Personal Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Reliance Pacific Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Reliance Pacific 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 Reliance Pacific 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 Reliance Pacific 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 Reliance Pacific 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 Reliance Pacific needs to make to build a sustainable competitive advantage.
